Bill Text: OR SB385 | 2013 | Regular Session | Introduced

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Bill Title: Relating to requests for prior authorization for coverage of prescription drugs.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB385 Detail]

Download: Oregon-2013-SB385-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 1648

                         Senate Bill 385

Sponsored by Senator BATES (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,
considering recommendation of Oregon Health Authority and
stakeholder group, to prescribe standards and single form to be
used for provider to request prior authorization for coverage of
prescription drugs. Requires insurer or other payer to approve or
deny request within 48 hours or request is deemed approved.

                        A BILL FOR AN ACT
Relating to requests for prior authorization for coverage of
  prescription drugs; amending ORS 743.061, 743.062, 743.801,
  743.806 and 743.807.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 743.061 is amended to read:
  743.061. (1) The Department of Consumer and Business Services
may adopt by rule uniform standards applicable to persons listed
in subsection   { - (2) - }  { +  (3) + } of this section for
health care financial and administrative transactions, including
uniform standards  { + and forms + } for:
  (a) Eligibility inquiry and response;
  (b) Claim submission;
  (c) Payment remittance advice;
  (d) Claims payment or electronic funds transfer;
  (e) Claims status inquiry and response;
  (f) Claims attachments;
    { - (g) Prior authorization; - }
    { - (h) - }  { +  (g) + } Provider credentialing; or
    { - (i) - }  { +  (h) + } Health care financial and
administrative transactions identified by the stakeholder work
group described in ORS 743.062.
   { +  (2) The department shall adopt by rule uniform standards
applicable to persons listed in subsection (3) of this section
for prior authorization requests for coverage of prescription
drugs.  The standards must include a single form to be used by
any provider making a request for prior authorization of a
prescription drug. The form may not exceed two pages in length
and must be electronically available and transmissible. A person
listed in subsection (3) of this section must approve or deny a
request for prior authorization submitted using the form
described in this subsection no later than 48 hours after receipt
of the request. If the person fails to timely approve or deny the
request, the request shall be deemed to have been approved. + }
    { - (2) - }  { +  (3) + } Any uniform standards  { + and
forms + } adopted under
  { - subsection - }  { +  subsections + } (1)  { + and (2) + }
of this section apply to:
  (a) Health insurers.
  (b) Prepaid managed care health services organizations as
defined in ORS 414.736.
  (c) Third party administrators.
  (d) Any person or public body that either individually or
jointly establishes a self-insurance plan, program or contract,
including but not limited to persons and public bodies that are
otherwise exempt from the Insurance Code under ORS 731.036.
  (e) Health care clearinghouses or other entities that process
or facilitate the processing of health care financial and
administrative transactions from a nonstandard format to a
standard format.
  (f) Any other person identified by the department that
processes health care financial and administrative transactions
between a health care provider and an entity described in this
subsection.
    { - (3) - }  { +  (4) + } In developing or updating any
uniform standards adopted under subsection (1)  { + or (2) + } of
this section, the department shall consider recommendations from
the Oregon Health Authority under ORS 743.062.
  SECTION 2. ORS 743.062 is amended to read:
  743.062. (1) The Oregon Health Authority shall convene a
stakeholder work group to recommend uniform standards  { + and
forms + } for health care financial and administrative
transactions, including, to the extent allowed by law, standards
applicable to commercial health insurance plans, self-funded
plans and state governmental health plans and programs.
  (2) The authority shall report uniform standards  { + and
forms + } recommended under subsection (1) of this section to the
Department of Consumer and Business Services for consideration in
the adoption of uniform standards  { + and forms + } by the
department under ORS 743.061.
  (3) The stakeholder work group, in recommending uniform
standards  { + and forms + } under subsection (1) of this
section, shall consider or incorporate any applicable national
standards for administrative simplification and timelines for
implementation of national standards for administrative
simplification that are established pursuant to federal law.
  SECTION 3. ORS 743.801, as amended by section 5, chapter 24,
Oregon Laws 2012, is amended to read:
  743.801. As used in this section and ORS  { + 743.061, + }
743.803, 743.804, 743.806, 743.807, 743.808, 743.811, 743.814,
743.817, 743.819, 743.821, 743.823, 743.827, 743.829, 743.831,
743.834, 743.837, 743.839, 743.854, 743.856, 743.857, 743.858,
743.859, 743.861, 743.862, 743.863, 743.864, 743.894, 743.911,
743.912, 743.913, 743.917 and 743.918:
  (1) 'Adverse benefit determination' means an insurer's denial,
reduction or termination of a health care item or service, or an
insurer's failure or refusal to provide or to make a payment in
whole or in part for a health care item or service, that is based
on the insurer's:
  (a) Denial of eligibility for or termination of enrollment in a
health benefit plan;
  (b) Rescission or cancellation of a policy or certificate;
  (c) Imposition of a preexisting condition exclusion as defined
in ORS 743.730, source-of-injury exclusion, network exclusion,
annual benefit limit or other limitation on otherwise covered
items or services;
  (d) Determination that a health care item or service is
experimental, investigational or not medically necessary,
effective or appropriate; or

  (e) Determination that a course or plan of treatment that an
enrollee is undergoing is an active course of treatment for
purposes of continuity of care under ORS 743.854.
  (2) 'Authorized representative' means an individual who by law
or by the consent of a person may act on behalf of the person.
  (3) 'Enrollee' has the meaning given that term in ORS 743.730.
  (4) 'Grievance' means:
  (a) A communication from an enrollee or an authorized
representative of an enrollee expressing dissatisfaction with an
adverse benefit determination, without specifically declining any
right to appeal or review, that is:
  (A) In writing, for an internal appeal or an external review;
or
  (B) In writing or orally, for an expedited response described
in ORS 743.804 (2)(d) or an expedited external review; or
  (b) A written complaint submitted by an enrollee or an
authorized representative of an enrollee regarding the:
  (A) Availability, delivery or quality of a health care service;
  (B) Claims payment, handling or reimbursement for health care
services and, unless the enrollee has not submitted a request for
an internal appeal, the complaint is not disputing an adverse
benefit determination; or
  (C) Matters pertaining to the contractual relationship between
an enrollee and an insurer.
  (5) 'Health benefit plan' has the meaning given that term in
ORS 743.730.
  (6) 'Independent practice association' means a corporation
wholly owned by providers, or whose membership consists entirely
of providers, formed for the sole purpose of contracting with
insurers for the provision of health care services to enrollees,
or with employers for the provision of health care services to
employees, or with a group, as described in ORS 743.522, to
provide health care services to group members.
  (7) 'Insurer' includes a health care service contractor as
defined in ORS 750.005.
  (8) 'Internal appeal' means a review by an insurer of an
adverse benefit determination made by the insurer.
  (9) 'Managed health insurance' means any health benefit plan
that:
  (a) Requires an enrollee to use a specified network or networks
of providers managed, owned, under contract with or employed by
the insurer in order to receive benefits under the plan, except
for emergency or other specified limited service; or
  (b) In addition to the requirements of paragraph (a) of this
subsection, offers a point-of-service provision that allows an
enrollee to use providers outside of the specified network or
networks at the option of the enrollee and receive a reduced
level of benefits.
  (10) 'Medical services contract' means a contract between an
insurer and an independent practice association, between an
insurer and a provider, between an independent practice
association and a provider or organization of providers, between
medical or mental health clinics, and between a medical or mental
health clinic and a provider to provide medical or mental health
services. 'Medical services contract' does not include a contract
of employment or a contract creating legal entities and ownership
thereof that are authorized under ORS chapter 58, 60 or 70, or
other similar professional organizations permitted by statute.
  (11)(a) 'Preferred provider organization insurance' means any
health benefit plan that:
  (A) Specifies a preferred network of providers managed, owned
or under contract with or employed by an insurer;
  (B) Does not require an enrollee to use the preferred network
of providers in order to receive benefits under the plan; and

  (C) Creates financial incentives for an enrollee to use the
preferred network of providers by providing an increased level of
benefits.
  (b) 'Preferred provider organization insurance' does not mean a
health benefit plan that has as its sole financial incentive a
hold harmless provision under which providers in the preferred
network agree to accept as payment in full the maximum allowable
amounts that are specified in the medical services contracts.
  (12) 'Prior authorization' means a determination by an insurer
prior to provision of services that the insurer will provide
reimbursement for the services. 'Prior authorization ' does not
include referral approval for evaluation and management services
between providers.
  (13) 'Provider' means a person licensed, certified or otherwise
authorized or permitted by laws of this state to administer
medical or mental health services in the ordinary course of
business or practice of a profession.
  (14) 'Utilization review' means a set of formal techniques used
by an insurer or delegated by the insurer designed to monitor the
use of or evaluate the medical necessity, appropriateness,
efficacy or efficiency of health care services, procedures or
settings.
  SECTION 4. ORS 743.806, as amended by section 7, chapter 24,
Oregon Laws 2012, is amended to read:
  743.806. All utilization review performed pursuant to a medical
services contract to which an insurer is not a party shall comply
with the following:
  (1) The criteria used in the review process and the method of
development of the criteria shall be made available for review to
a party to such medical services contract upon request.
  (2) A doctor of medicine or osteopathy licensed under ORS
chapter 677 shall be responsible for all final recommendations
regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as
appropriate with medical and mental health specialists in making
such recommendations.
  (3) Any patient or provider who has had a request for treatment
or payment for services denied as not medically necessary or as
experimental shall be provided an opportunity for a timely appeal
before an appropriate medical consultant or peer review
committee.
  (4)  { + Except as provided in ORS 743.061 (2), + } a provider
request for prior authorization of nonemergency service must be
answered within two business days, and qualified health care
personnel must be available for same-day telephone responses to
inquiries concerning certification of continued length of stay.
  SECTION 5. ORS 743.807 is amended to read:
  743.807. (1) All insurers offering a health benefit plan in
this state that provide utilization review or have utilization
review provided on their behalf shall file an annual summary with
the Department of Consumer and Business Services that describes
all utilization review policies, including delegated utilization
review functions, and documents the insurer's procedures for
monitoring of utilization review activities.
  (2) All utilization review activities conducted pursuant to
subsection (1) of this section shall comply with the following:
  (a) The criteria used in the utilization review process and the
method of development of the criteria shall be made available for
review to contracting providers upon request.
  (b) A doctor of medicine or osteopathy licensed under ORS
chapter 677 shall be responsible for all final recommendations
regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as
appropriate with medical and mental health specialists in making
such recommendations.

  (c) Any provider who has had a request for treatment or payment
for services denied as not medically necessary or as experimental
shall be provided an opportunity for a timely appeal before an
appropriate medical consultant or peer review committee.
  (d)  { + Except as provided in ORS 743.061 (2), + } a provider
request for prior authorization of nonemergency service must be
answered within two business days, and qualified health care
personnel must be available for same-day telephone responses to
inquiries concerning certification of continued length of stay.
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