14VAC5-215 Rules Governing Independent External Review of Final Adverse Utilization Review Decisions

REGULATIONS

Vol. 27 Iss. 22 - July 04, 2011

TITLE 14. INSURANCE

STATE CORPORATION COMMISSION

Chapter 215

Final Regulation

Titles of Regulations: 14VAC5-215. Rules Governing Independent External Review of Final Adverse Utilization Review Decisions (amending 14VAC5-215-10).

14VAC5-216. Rules Governing Internal Appeal and External Review (adding 14VAC5-216-10, 14VAC5-216-20, 14VAC5-216-30, 14VAC5-216-40, 14VAC5-216-50, 14VAC5-216-60, 14VAC5-216-70, 14VAC5-216-80, 14VAC5-216-90, 14VAC5-216-100, 14VAC5-216-110, 14VAC5-216-120, 14VAC5-216-130).

Statutory Authority: §§ 12.1-13 and 38.2-223 of the Code of Virginia.

Effective Date: July 1, 2011.

Agency Contact: Julie Blauvelt, Senior Insurance Market Examiner, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Summary:

This regulatory action (i) amends 14VAC5-215-10 by limiting the chapter's application to final adverse decisions made before or on June 30, 2011, and (ii) adds a new chapter, 14VAC5-216, Rules Governing Internal Appeal and External Review, to conform the state's external review program with the Uniform Health Carrier External Review Model Act, prepared by the National Association of Insurance Commissioners, as required by the federal Patient Protection and Affordable Care Act. The rules clarify and implement the provisions of Chapter 788 of the 2011 Acts of Assembly which become effective on July 1, 2011, and conform Virginia's internal appeal and external review processes to meet the federal requirements.

Specifically, the rules (i) contain provisions that apply the internal appeal and external review requirements to all health carriers, unless specifically excepted; (ii) set forth guidelines and standards for an internal appeal process that is in conformity with federal Department of Labor regulations that provide for a full and fair review of any adverse benefit determination; and (iii) provide for urgent care appeals, concurrent review decisions, and notification requirements. Although the external review process is outlined in Chapter 35.1 (38.2-3556 et seq.) of Title 38.2 of the Code of Virginia, the proposed rules clarify these provisions and provide forms for this process.

Since publication of the proposed rules, the following changes were made:

1. 14VAC5-216-20: The definitions of "pre-service claim" and "post-service claim" were amended to reflect more accurately definitions under federal requirements

2. 14VAC5-216-100 A: The provision that requires that an application fee of $500 for an independent review organization was amended to reflect that an application fee of up to $500 may be required.

3. Form 216-E: This form was amended to reflect the change noted above in 14VAC5-216-100 A.

AT RICHMOND, JUNE 10, 2011

COMMONWEALTH OF VIRGINIA

At the relation of the

STATE CORPORATION COMMISSION

CASE NO. INS-2011-00070

Ex Parte: In the matter of
Amending Rules Governing Independent
External Review of Final Adverse Utilization
Review Decisions and Adopting New Rules
Governing Internal Appeal and External Review

ORDER ADOPTING RULES

By Order entered herein May 2, 2011, all interested persons were ordered to take notice that subsequent to June 1, 2011, the State Corporation Commission ("Commission") would consider the entry of an order to amend section 10 in Chapter 215 of Title 14 of the Virginia Administrative Code entitled "Rules Governing Independent External Review of Final Adverse Utilization Review Decisions" ("Rules") and adopt a new chapter, Chapter 216 of Title 14 of the Virginia Administrative Code entitled "Rules Governing Internal Appeal and External Review," ("new Rules") set forth at 14 VAC 5-216-10 through 14 VAC 5-216-130 and accompanying forms. These amended Rules and new Rules were proposed by the Bureau of Insurance ("Bureau"). The Order to Take Notice required that on or before June 1, 2011, any person objecting to the amended Rules and adoption of the new Rules shall have filed a request for hearing with the Clerk of the Commission ("Clerk").

The Order to Take Notice also required all interested persons to file their comments in support of or in opposition to amending the Rules and adoption of the new Rules on or before June 1, 2011.

No comments were filed with the Clerk of the Commission. Comments were sent to the Bureau from CareFirst BlueCross BlueShield by letter dated May 26, 2011, and from AARP by letter dated June 1, 2011. No request for a hearing was filed with the Clerk.

The Bureau considered the comments sent by both CareFirst and the AARP, and responded to these comments in respective letters back to each of these organizations. No changes to the amended Rules or new Rules were made as a result of the comments received. However, the Bureau recommends that the proposed new Rules be amended as follows:

(1) 14 VAC 5-216-20: The definitions of "pre-service claim" and "post-service claim" be amended to reflect more accurately definitions under federal requirements;

(2) 14 VAC 5-216-100 A: The provision that requires that an application fee of $500 for an independent review organization be amended to reflect that an application fee of up to $500 may be required.

(3) Form 216-E be amended to reflect the change noted above in 14 VAC 5-216-100 A.

The Bureau recommends that the amendment to the Rules and all other sections of the new Rules remain as proposed.

The amendment to section 10 in Chapter 215 is necessary to limit the chapter's application to final adverse decisions made before or on June 30, 2011.

The proposed new Rules in Chapter 216 are necessary because the federal Patient Protection and Affordable Care Act requires that the state's external review program be in conformity with the Uniform Health Carrier External Review Model Act prepared by the National Association of Insurance Commissioners. The 2011 Acts of Assembly Chapter 788 conform Virginia's internal appeal and external review processes to meet these federal requirements. These new Rules clarify and implement the provisions contained in Acts of Assembly Chapter 788, which becomes effective on July 1, 2011.

NOW THE COMMISSION, having considered the amendment to the Rules, the proposed new Rules, and the Bureau's recommendation for additional amendments to the new Rules, is of the opinion that the amendment to the Rules in Chapter 215 and the new Rules set forth in Chapter 216 of the Virginia Administrative Code be adopted.

Accordingly, IT IS ORDERED THAT:

(1) The amendment to section 10 in Chapter 215 of Title 14 of the Virginia Administrative Code entitled "Rules Governing Independent External Review of Final Adverse Utilization Review Decisions" and the new rules in Chapter 216 of Title 14 of the Virginia Administrative Code entitled "Rules Governing Internal Appeal and External Review," set forth at 14 VAC 5-216-10 through 14 VAC 5-216-130 and accompanying forms, which are attached hereto and made a part hereof, should be, and they are hereby, ADOPTED effective on July 1, 2011;

(2) AN ATTESTED COPY hereof, together with a copy of the adopted amended Rules and new Rules, shall be sent by the Clerk of the Commission to Althelia Battle, Deputy Commissioner, Bureau of Insurance, State Corporation Commission, who forthwith shall give further notice of the adopted amended Rules and new Rules by mailing a copy of this Order, including a clean copy of the final amended Rules and new Rules, to all companies, HMOs and health services plans licensed by the Commission to write accident and sickness insurance in the Commonwealth of Virginia, as well as all interested parties;

(3) The Commission's Division of Information Resources shall cause a copy of this Order, together with the adopted amended Rules and adopted new Rules, to be forwarded to the Virginia Registrar for appropriate publication in the Virginia Register;

(4) The Commission's Division of Information Resources shall make available this Order and the attached adopted amended Rules and new Rules on the Commission's website: http://www.scc.virginia.gov/case; and

(5) The Bureau of Insurance shall file with the Clerk of the Commission an affidavit of compliance with the notice requirements of paragraph (2) above.

14VAC5-215-10. Scope and purpose.

A. This chapter shall apply to all utilization review entities as that term is defined in 14VAC5-215-30, the issuer of a covered person's policy or contract of health benefits, and covered persons.

B. This chapter shall not apply to utilization review performed under contract with the federal government for patients eligible for health care services under Title XVIII of the Social Security Act (42 USC § 1395 et seq.), utilization review performed under contract with the federal government for patients eligible for health care services under the TRICARE program (10 USC § 1071 et seq.), or utilization review performed under contract with a plan otherwise exempt from the operation of this chapter pursuant to the Employee Retirement Income Security Act of 1974 (29 USC § 1001 et seq.).

This chapter shall not apply to programs administered by the Department of Medical Assistance Services or under contract with the Department of Medical Assistance Services.

C. The purpose of this chapter is to set forth rules to carry out the provisions of Chapter 59 (§ 38.2-5900 et seq.) of Title 38.2 of the Code of Virginia so as to provide (i) a process for appeals to be made to the Bureau of Insurance to obtain an independent external review of final adverse decisions made by a utilization review entity; (ii) procedures for expedited consideration of appeals in cases of emergency health care; and (iii) standards, credentials, and qualifications for impartial health entities.

D. This chapter shall apply to any final adverse decision made on or before June 30, 2011.

CHAPTER 216
RULES GOVERNING INTERNAL APPEAL AND EXTERNAL REVIEW

Part I
General

14VAC5-216-10. Scope and purpose.

A. This chapter shall apply to all health carriers, except that the provisions of this chapter shall not apply to a policy or certificate that provides coverage only for a specified disease, specified accident or accident-only coverage; credit; disability income; hospital indemnity; long-term care; dental, vision care, or any other limited supplemental benefit or to a Medicare supplement policy of insurance; coverage under a plan through Medicare, Medicaid, or the federal employees health benefits program; self-insured plans except that a self-insured employee welfare benefit plan may elect to use the state external review process; any coverage issued under Chapter 55 of Title 10 of the U.S. Code (TRICARE), and any coverage issued as supplemental to that coverage; any coverage issued as supplemental to liability insurance, workers' compensation or similar insurance; and automobile medical payment insurance or any insurance under which benefits are payable with or without regard to fault, whether written on a group or individual basis.

B. The purpose of this chapter is to set forth rules to carry out the provisions of Chapter 35.1 (§ 38.2-3556 et seq.) of Title 38.2 of the Code of Virginia as well as federal law to provide a health carrier with guidelines to assist with establishing a procedure for an internal appeals process under which there will be a full and fair review of any adverse benefit determination. This chapter also sets forth requirements for the external review process.

C. This chapter shall apply to any adverse benefit determination made on or after July 1, 2011, by any health carrier for a grandfathered or non-grandfathered health benefit plan, as defined by the PPACA.

14VAC5-216-20. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Adverse benefit determination" in the context of the internal appeals process means (i) a determination by a health carrier or its designee utilization review entity that, based on the information provided, a request for, a benefit under the health carrier's health benefit plan upon application of any utilization review technique does not meet the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness or is determined to be experimental or investigational and the requested benefit is therefore denied, reduced, or terminated or payment is not provided or made, in whole or in part, for the requested benefit; (ii) the denial, reduction, or termination of, or failure to provide or make payment in whole or in part for, a benefit based on a determination by a health carrier or its designee utilization review entity of a covered person's eligibility to participate in the health carrier's health benefit plan; (iii) any review determination that denies, reduces, or terminates or fails to provide or make payment, in whole or in part, for a benefit; (iv) a rescission of coverage determination as defined in § 38.2-3438 of the Code of Virginia; or (v) any decision to deny individual coverage in an initial eligibility determination.

"Adverse determination" in the context of external review means a determination by a health carrier or its designee utilization review entity that an admission, availability of care, continued stay, or other health care service that is a covered benefit has been reviewed and, based upon the information provided, does not meet the health carrier's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness or is determined to be experimental or investigational and the requested service or payment for the service is therefore denied, reduced, or terminated.

"Authorized representative" means (i) a person to whom a covered person has given express written consent to represent the covered person; (ii) a person authorized by law to provide substituted consent for a covered person; (iii) a family member of a covered person or the covered person's treating health care professional when the covered person is unable to provide consent; (iv) a health care professional when the covered person's health benefit plan requires that a request for a benefit under the plan be initiated by the health care professional; or (v) in the case of an urgent care internal appeal, a health care professional with knowledge of the covered person's medical condition.

"Clinical peer reviewer" means a practicing health care professional who holds a nonrestricted license in a state, district, or territory of the United States and in the same or similar specialty as typically manages the medical condition, procedure, or treatment under appeal.

"Commission" means the State Corporation Commission.

"Concurrent review" means utilization review conducted during a patient's stay or course of treatment in a facility, the office of a health care professional, or other inpatient or outpatient health care setting.

"Covered person" means a policyholder, subscriber, enrollee, or other individual participating in a health benefit plan. For purposes of this chapter with respect to the administration of appeals, references to a covered person include a covered person's authorized representative, if any.

"Emergency services" means those health care services that are rendered after the sudden onset of a medical condition that manifests itself by symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected by a prudent layperson who possesses an average knowledge of health and medicine to result in (i) serious jeopardy to the mental or physical health of the individual, (ii) danger of serious impairment of the individual's bodily functions, (iii) serious dysfunction of any of the individual's bodily organs, or (iv) in the case of a pregnant woman, serious jeopardy to the health of the fetus.

"Final adverse determination" means an adverse determination involving a covered benefit that has been upheld by a health carrier, or its designee utilization review entity, at the completion of the health carrier's internal appeal process.

"Group health plan" means an employee welfare benefit plan (as defined in the Employee Retirement Income Security Act of 1974 (29 USC § 1002(1)), to the extent that the plan provides medical care and including items and services paid for as medical care to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise.

"Health benefit plan" means a policy, contract, certificate, or agreement offered or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. "Health benefit plan" does not include accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans pursuant to contracts with the United States government; Medicare supplement or long-term care insurance; Medicaid coverage; dental only or vision only insurance; specified disease insurance; hospital indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance; insurance arising out of a workers' compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.

"Health care professional" means a physician or other health care practitioner licensed, accredited, or certified to perform specified health care services consistent with the laws of the Commonwealth.

"Health carrier" means an entity, subject to the insurance laws and regulations of the Commonwealth or subject to the jurisdiction of the commission, that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including an accident and sickness insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or a nonstock corporation offering or administering a health services plan, a hospital services plan, or a medical or surgical services plan, or any other entity providing a plan of health insurance, health benefits, or health care services except as excluded under § 38.2-3557 of the Code of Virginia.

"Independent review organization" means an entity that conducts independent external reviews of adverse determinations and final adverse determinations.

"PPACA" means the Patient Protection and Affordable Care Act (P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152).

"Pre-service claim" means a claim for a benefit under a health benefit plan that requires [ or allows for ] approval of the benefit [ in whole or in part, ] in advance of obtaining the service or treatment.

"Post-service claim" means a claim for a benefit under a health benefit plan [ for which that is not a pre-service claim, or ] the service or treatment has been provided to the covered person.

"Self-insured plan" means an "employee welfare benefit plan" that has the meaning set forth in the Employee Retirement Income Security Act of 1974, 29 USC § 1002(1).

"Urgent care appeal" means an appeal for medical care or treatment with respect to which the application of the time periods for making non-urgent care determinations (i) could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or (ii) in the opinion of the treating health care professional with knowledge of the covered person's medical condition, would subject the covered person to severe pain that cannot be adequately managed without the care or treatment that is the subject of the appeal. An urgent care appeal shall not be available for any post-service claim or retrospective adverse benefit determination.

"Utilization review" means a set of formal techniques designed to monitor the use of or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedures or settings. Techniques may include ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, or retrospective review.

Part II
Internal Appeal

14VAC5-216-30. General requirements.

A. Each health carrier offering a health benefit plan shall establish and maintain an internal appeals procedure in accordance with this chapter, 29 USC § 2560.503-1, and 45 CFR 147.136 to provide a full and fair review of any adverse benefit determination.

B. As part of each health carrier's health benefit plan and any adverse benefit determination, each health carrier shall provide notice of its available internal appeals procedures (including urgent care appeals), including timeframes for submission of an appeal, the health carrier's review and response. Such notice shall also include the name, address, and telephone number of the person or organizational unit designated to coordinate the review of the appeal for the health carrier, and contact information for the Bureau of Insurance. If the plan is a managed care health insurance plan (MCHIP), the mailing address, telephone number, and email address for the Office of the Managed Care Ombudsman shall also be included.

C. The internal appeals procedure shall not contain any provision, or be administered in a way that unduly inhibits or hampers the initiation or processing of claims for benefits.

D. The internal appeals procedure shall provide for an authorized representative of a covered person to act on behalf of the covered person in pursuing a benefit claim or appeal of an adverse benefit determination. A health carrier may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a covered person. In the case of an urgent care appeal, a health care professional shall be permitted to act as the authorized representative of the covered person, in accordance with this chapter.

E. The internal appeals procedure shall contain administrative processes and safeguards designed to ensure and to verify that benefit determinations are made in accordance with the provisions of the health benefit plan and, where appropriate, the health benefit plan provisions have been applied consistently with respect to similarly situated covered persons.

14VAC5-216-40. Minimum appeal requirements.

A. Each covered person shall be entitled to a full and fair review of an adverse benefit determination. Within 180 days after the date of receipt of a notice of an adverse benefit determination, a covered person may file an appeal with the health carrier. A health carrier may designate a utilization review entity to coordinate the review. For purposes of this chapter, "health carrier" may also mean its designated utilization review entity.

B. The health carrier shall conduct the appeal in a manner to ensure the independence and impartiality of the individuals involved in reviewing the appeal. In ensuring the independence and impartiality of such individuals, the health carrier shall not make decisions regarding hiring, compensation, termination, promotion, or other similar matters based upon the likelihood that an individual will support the denial of benefits.

C. 1. In deciding an appeal of any adverse benefit determination that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug, or other service is experimental, investigational, or not medically necessary or appropriate, the health carrier shall designate a clinical peer reviewer to review the appeal. The clinical peer reviewer shall not have been involved in any previous adverse benefit determination with respect to the claim.

2. A reviewer of any other type of adverse benefit determination shall be an appropriate person designated by the health carrier. The reviewer of the appeal shall not be the individual who made any previous adverse benefit determination of the subject appeal nor the subordinate of such individual and shall not defer to any prior adverse benefit determination.

D. A full and fair review shall also provide for:

1. The covered person to have an opportunity to submit written comments, documents, records, and other information relating to the appeal for the reviewer or reviewers to consider when reviewing the appeal;

2. Upon request to the health carrier, the covered person to have reasonable access to and free of charge copies of all documents, records, and other information relevant to the covered person's request for benefits (note that any request for diagnosis and treatment codes, in itself, should not be considered to be a request for an internal appeal);

3. An appeal process that takes into account all comments, documents, records, and other information submitted by the covered person relating to the appeal, without regard to whether such information was submitted or considered in the initial benefit determination.

4. The identification of medical or vocational experts whose advice was obtained on behalf of the health benefit plan in connection with a covered person's adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination.

5. An urgent care appeal process.

6. Prior to issuing a final adverse benefit determination, the health carrier to provide free of charge to the covered person any new or additional evidence relied upon or generated by the health carrier or at the direction of the health carrier, in connection with the internal appeal sufficiently in advance of the date the determination is required to be provided to permit the covered person a reasonable opportunity to respond prior to that date.

E. A health carrier shall notify the covered person of the final benefit determination within a reasonable period of time appropriate to the medical circumstances, but not later than the timeframes established in subdivisions 1 and 2 of this subsection.

1. If an internal appeal involves a pre-service claim review request, the health carrier shall notify the covered person of its decision within 30 days after receipt of the appeal. A health carrier may provide a second level of internal appeal for group health plans only, provided that a maximum of 15 days is allowed for a benefit determination and notification from each level of the appeal.

2. If an internal appeal involves a post-service claim review request, the health carrier shall notify the covered person of its decision within 60 days after receipt of the appeal. A health carrier may provide a second level of internal appeal for group health plans only, provided that a maximum of 30 days is allowed for a benefit determination and notification from each level of the appeal.

14VAC5-216-50. Urgent care appeals.

A. The health carrier shall notify the covered person of its initial benefit determination as soon as possible taking into account medical exigencies, but not later than 72 hours after receipt of the request, unless the covered person fails to provide sufficient information to determine whether, or to what extent, benefits are covered or payable under the health benefit plan. In the case of such failure, the health carrier shall notify the covered person as soon as possible, but not later than 24 hours after receipt of the request, of the specific information necessary to complete the claim. The covered person shall be afforded a reasonable amount of time, taking into account the circumstances, but not less than 48 hours to provide the specified information. The health carrier shall notify the covered person of its benefit determination not later than 48 hours after the earlier of (i) its receipt of the specified information or (ii) the end of the period afforded to the covered person to provide the specified additional information.

B. The notification of an urgent care adverse benefit determination that is based on a medical necessity, appropriateness, health care setting, level of care, effectiveness, experimental or investigational service or treatment, or similar exclusion or limit, shall include a description of the health carrier's urgent care appeal process including any time limits applicable to those procedures and the availability of and procedures for an expedited external review.

C. Upon receipt of an adverse benefit determination, a covered person may submit a request for an urgent care appeal either orally or in writing to the health carrier.

D. All necessary information, including the benefit determination on appeal, shall be transmitted between the health carrier and the covered person by telephone, facsimile, or the most expeditious method available.

E. The health carrier shall notify the covered person and the treating health care professional of its benefit determination as soon as possible, taking into account the medical exigencies, but not later than 72 hours after receipt of an urgent care appeal.

14VAC5-216-60. Concurrent review decisions.

A. A health carrier shall provide continued coverage pending the outcome of an internal appeal of a concurrent review decision.

B. Any reduction or termination by a health carrier of an approved course of treatment (other than by health benefit plan amendment or termination) to be provided over a period of time or number of treatments shall constitute an adverse benefit determination. The health carrier shall notify the covered person of the adverse benefit determination at a time sufficiently in advance of the reduction or termination to allow the covered person to file an internal appeal and obtain a determination before the benefit is reduced or terminated.

C. Any request by a covered person to extend the course of treatment beyond the period of time or number of treatments that is an urgent care appeal shall be decided as soon as possible, taking into account the medical exigencies. The covered person and the treating health care professional shall be notified of the benefit determination within 72 hours after receipt of the internal appeal.

14VAC5-216-70. Notification requirements.

A. A health carrier shall provide a covered person with written or electronic notification of its benefit determination on appeal. The notification of an adverse benefit determination shall be written in easily understandable language and shall set forth the following:

1. Information sufficient to identify the claim involved with respect to the appeal, including the date of service, the health care provider, and the claim amount;

2. The specific reason or reasons for the adverse benefit determination;

3. Reference to the specific plan provisions on which the adverse benefit determination is made;

4. A statement that the covered person is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the covered person's claim for benefits;

5. A statement indicating whether any additional internal appeals are available or whether the covered person has received a final adverse determination. If internal appeals are available, contact information on where to submit the appeal;

6. A statement describing the external review procedures offered by the health carrier and the covered person's right to obtain information about such procedures and the covered person's right to bring a civil action under § 502(a) of ERISA (29 USC § 1001 et seq.), if applicable; and

7. A statement indicating that the covered person has the right to request an external review if the covered person has not received a final benefit determination within the timeframes provided in 14VAC5-216-40 E, unless the covered person requests or agrees to a delay.

B. In the case of a group health plan, the required notification shall also set forth the following:

1. If an internal rule, guideline, protocol, or other similar criterion (collectively "rule") was relied upon in making the adverse benefit determination, either the specific rule or a statement that such rule was relied upon in making the adverse benefit determination and that a copy of the rule will be provided free of charge to the covered person upon request;

2. If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the covered person's medical circumstances, or a statement that such explanation will be provided free of charge upon request; and

3. Include a statement indicating that the covered person may have other voluntary alternative dispute resolution options, such as mediation. The covered person should be referred to the appropriate federal or state agency, his plan administrator, or the health carrier, as appropriate.

C. Electronic notification shall be in accordance with the provisions of the Uniform Electronic Transactions Act (§ 59.1-479 et seq. of the Code of Virginia).

Part III
External Review

14VAC5-216-80. Incomplete or ineligible determinations.

A. After the covered person has requested an external review, and if he is notified by the health carrier that the request is incomplete in accordance with § 38.2-3561 B 4 or 38.2-3563 D 6 of the Code of Virginia, the covered person shall have five business days from receipt of such notice to return the requested materials necessary to complete the request to the health carrier. The health carrier shall then have five business days to conduct the preliminary review for eligibility. Notification shall be in accordance with the provisions of § 38.2-3561 C or 38.2-3563 E of the Code of Virginia.

B. If the health carrier determines that a covered person's request for external review is complete but ineligible, the covered person may request that the commission review the ineligibility determination.

1. Within five business days from the date the covered person receives notification from the health carrier, the covered person may request in writing that the commission review the ineligibility determination by the health carrier.

2. Within one business day after receipt of a notification from the covered person, the commission shall notify the health carrier of such request.

3. Within three business days of receipt of the commission's notice to the health carrier, the health carrier shall forward all information and materials used to make the ineligibility determination to the commission.

4. Within five business days of receipt of all materials necessary to make an eligibility determination, the commission shall review the file and make such decision.

5. Within one business day of such decision, the commission shall notify the covered person and the health carrier, and the assigned independent review organization if eligible.

C. If the covered person has requested an expedited external review or an expedited external review of experimental or investigational treatment, and is notified by the health carrier that the request for such expedited external review is incomplete, the covered person shall promptly return the requested materials necessary to complete the request to the health carrier. The health carrier shall then promptly conduct the preliminary review for eligibility.

D. If the health carrier determines that a covered person's request for expedited external review is complete but ineligible, the covered person may promptly request, orally or in writing, that the commission review the ineligibility determination.

1. Upon receipt of an eligibility request from a covered person, the commission shall promptly notify the health carrier of such request.

2. The health carrier shall promptly forward all information and materials used to make the ineligibility determination to the commission.

3. Upon receipt of all information and materials from the health carrier, the commission shall promptly review the file and make an eligibility determination.

4. The commission shall promptly notify the covered person and the health carrier, and the assigned independent review organization if eligible.

E. If the request for a standard external review does not contain sufficient information to allow the commission to send the request to the health carrier, the commission shall have one business day from the date the sufficient information is received to provide notice to the health carrier.

14VAC5-216-90. Expedited external review.

A. If a covered person files a request with the commission for an expedited external review in accordance with § 38.2-3560 C of the Code of Virginia, the health carrier shall promptly conduct an eligibility determination in accordance with 14VAC5-216-80 prior to review by an independent review organization.

B. When an independent review organization is requested by the commission in accordance with § 38.2-3562 of the Code of Virginia to conduct an expedited external review of an adverse determination under § 38.2-3560 C of the Code of Virginia, the independent review organization shall determine whether the timeframes for sequential completion of the expedited internal appeal and expedited external review (i) could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or (ii) would subject the covered person to severe pain that cannot be adequately managed without the care or treatment that is the subject of the appeal, as compared to the timeframes for simultaneous completion of the expedited appeal and review. The independent review organization shall promptly make such determination and shall promptly notify the covered person, the health carrier, and the commission.

14VAC5-216-100. Qualifications for independent review organizations.

A. An independent review organization that desires to conduct external reviews for the Commonwealth shall submit an application [ and $500 application fee ] using Form 216-E to the commission for review and approval. [ An application fee of up to $500 may be required. ]

B. An independent review organization shall meet all the qualification requirements in § 38.2-3565 of the Code of Virginia.

C. An independent review organization that does not maintain required accreditation status shall provide notice to the commission within 30 days of any change in such status.

14VAC5-216-110. External review reporting requirements.

In accordance with § 38.2-3568 of the Code of Virginia, each health carrier and each independent review organization shall file with the commission a report by April 1 of each calendar year using Form 216-F or 216-G as appropriate.

14VAC5-216-120. Funding of external review.

Failure of a health carrier to timely pay any independent review organization for a completed external review shall be a violation of this section and shall subject the health carrier to penalties imposed under Title 38.2 of the Code of Virginia.

14VAC5-216-130. Self-insured plans.

A. Any self-insured plan whose plan sponsor's headquarters is located in Virginia may choose to utilize the external review processes outlined in Chapter 35.1 (§ 38.2-3556 et seq.) of Title 38.2 of the Code of Virginia. For purposes of Part III of this chapter, "health carrier" shall mean a self-insured plan or its third-party administrator if any, that opts in to the state external review process.

B. A self-insured plan utilizing such external review processes shall notify the commission that it will opt-in to the state external review process by completing Form 216-H. A new form shall be completed for each plan year.

C. A self-insured plan that opts in to the state external review process shall comply with all statutes and regulations pertaining to such process. Plan materials and appropriate denial notices shall contain required information regarding the state external review processes.

D. A self-insured plan that opts into the state external review process but fails to comply with the requirements outlined in this chapter and applicable state statutes pertaining to the external review process may be terminated from use of such process by the commission.

NOTICE: The following forms used in administering the regulation were filed by the agency. The forms are not being published; however, online users of this issue of the Virginia Register of Regulations may click on the name to access a form. The forms are also available through the agency contact or at the Office of the Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond, Virginia 23219.

FORMS (14VAC5-216)

External Review Request Form, Form 216-A (7/11).

Appointment of Authorized Representative, Form 216-B (7/11).

Physician Certification Expedited External Review Request, Form 216-C (7/11).

Physician Certification Experimental or Investigational Denials, Form 216-D (7/11).

[ Independent Review Organization Application for Registration, Form 216-E (7/11)

Independent Review Organization Application for Registration, Form 216-E (7/11). ]

Health Carrier External Review Annual Report Form, Form 216-F (7/11).

Independent Review Organization External Review Annual Report Form, Form 216-G (7/11).

Self-Insured Plan Opt-In to Virginia External Review Process, Form 216-H (7/11).

VA.R. Doc. No. R11-2809; Filed June 13, 2011, 11:14 a.m.