H.B. 649
GENERAL ASSEMBLY OF NORTH CAROLINA
Apr 17, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40304-MR-71A
Short Title: Ensure Timely/Clinically Sound Utiliz. Review. (Public)
Sponsors: Representative K. Baker.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO ENSURE TIMELY AND CLINICALLY SOUND UTILIZATION REVIEWS
3 AND THAT MEDICAL DECISIONS ARE MADE BY HEALTH CARE PROVIDERS.
4 The General Assembly of North Carolina enacts:
5 SECTION 1. G.S. 58-50-61 reads as rewritten:
6 "§ 58-50-61. Utilization review.
7 (a) Definitions. – As used in this section, in G.S. 58-50-62, and in Part 4 of this Article,
8 the term:
9 …
10 (2a) "Closely related service" means a health care service subject to utilization
11 review that is closely related in purpose, diagnostic utility, or designated
12 health care billing code, that was provided on the same date of service as
13 another health care service was authorized to be performed by a previous
14 utilization review determination, and for which a provider, acting within the
15 scope of the provider's license and expertise, may reasonably be expected to
16 perform in conjunction with, or in lieu of, the originally authorized service
17 due to differences in the observed patient characteristics or needs for
18 diagnostic information that were not readily identifiable until the provider was
19 performing the originally authorized service. The term does not include an
20 order for or administration of a prescription drug or any part of a series or
21 course of treatments.
22 (2b) "Course of treatment" means a prescribed order or ordered course of treatment
23 for a specific covered person with a specific condition that is outlined and
24 decided upon ahead of time with the covered person and health care provider.
25 …
26 (5) "Emergency services" means health care items and services furnished or
27 required to screen for or treat an emergency medical condition until the
28 condition is stabilized, including prehospital care transportation services,
29 including, but not limited to, ambulance services and ancillary services
30 routinely available to the emergency department.
31 …
32 (14a) "Prior authorization" means the process by which insurers and utilization
33 review organizations determine the medical necessity and/or medical
34 appropriateness of otherwise covered health care services prior to the
35 rendering of such health care services. Prior authorization also includes any
36 insurer's or utilization review organization's requirement that a covered person
*DRH40304-MR-71A*
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1 or health care provider notify the insurer or utilization review organization
2 prior to providing a health care service.
3 …
4 (16a) "Urgent health care service" means a health care service with respect to which
5 the application of the time periods for making a non-expedited utilization
6 review, which, in the opinion of a medical doctor with knowledge of the
7 covered person's medical condition could either (i) seriously jeopardize the
8 life or health of the covered person or the ability of the covered person to
9 regain maximum function or (ii) subject the covered person to severe pain that
10 cannot be adequately managed without the care or treatment that is the subject
11 of the utilization review. The term urgent health care service shall include
12 mental and behavioral health care services.
13 (17) "Utilization review" means a set of formal techniques designed to monitor the
14 use of or evaluate the clinical necessity, appropriateness, efficacy or efficiency
15 of health care services, procedures, providers, or facilities. These techniques
16 may include:include any of the following:
17 …
18 d. Concurrent review. – Utilization review conducted during a patient's
19 hospital stay or course of treatment.treatment and that payment will be
20 made for that service.
21 …
22 e1. Prior authorization.
23 …
24 (18) "Utilization review organization" or "URO" means an entity that conducts
25 utilization review under a managed care plan, but does not mean an insurer
26 performing utilization review for its own health benefit plan.
27 …
28 (c) Scope and Content of Program. – Every insurer shall prepare and maintain a
29 utilization review program document that describes all delegated and nondelegated review
30 functions for covered services including:
31 (1) Procedures to evaluate the clinical necessity, appropriateness, efficacy, or
32 efficiency of health services.
33 (2) Data sources and clinical review criteria used in decision making.
34 (3) The process for conducting appeals of noncertifications.
35 (4) Mechanisms to ensure consistent application of review criteria and compatible
36 decisions.
37 (5) Data collection processes and analytical methods used in assessing utilization
38 of health care services.
39 (6) Provisions for assuring confidentiality of clinical and patient information in
40 accordance with State and federal law.
41 (7) The organizational structure (e.g., utilization review committee, quality
42 assurance, or other committee) that periodically assesses utilization review
43 activities and reports to the insurer's governing body.
44 (8) The staff position functionally responsible for day-to-day program
45 management.
46 (9) The methods of collection and assessment of data about underutilization and
47 overutilization of health care services and how the assessment is used to
48 evaluate and improve procedures and criteria for utilization review.
49 (d) Program Operations. – In every utilization review program, an insurer or URO shall
50 use documented clinical review criteria that are based on sound clinical evidence and that are
51 periodically evaluated at least annually to assure ongoing efficacy. An insurer may develop its
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1 own clinical review criteria or purchase or license clinical review criteria. criteria, provided that
2 the insurer's clinical review meets, at a minimum, all of the following:
3 (1) Is based on applicable nationally recognized medical standards.
4 (2) Is consistent with applicable government guidelines.
5 (3) Provides for the delivery of a health care service in a clinically appropriate
6 type, frequency, and setting and for a clinically appropriate duration.
7 (4) Reflects the current medical and scientific evidence regarding emerging
8 procedures, clinical guidelines, and best practices, as articulated in
9 independent, peer-reviewed medical literature.
10 (5) Is sufficiently flexible to allow deviations from the norm when justified on a
11 case-by-case basis to ensure access to care.
12 Criteria for determining when a patient needs to be placed in a substance abuse treatment
13 program shall be either (i) the diagnostic criteria contained in the most recent revision of the
14 American Society of Addiction Medicine Patient Placement Criteria for the Treatment of
15 Substance-Related Disorders or (ii) criteria adopted by the insurer or its URO. The Department,
16 in consultation with the Department of Health and Human Services, may require proof of
17 compliance with this subsection by a plan or URO.
18 Qualified health care professionals shall administer the utilization review program and
19 oversee review decisions under the direction of a medical doctor. A medical doctor licensed to
20 practice medicine in this State shall evaluate the clinical appropriateness of noncertifications.
21 Insurers must ensure that all noncertifications are made by a medical doctor possessing a current
22 and valid license to practice medicine in this State who (i) is of the same specialty as the medical
23 doctor who typically manages the medical condition or disease or provides the health care service
24 involved in the request and (ii) has experience treating patients with the medical condition or
25 disease for which the health care service is being requested. Medical doctors must issue
26 noncertifications under the clinical direction of one of the insurer's medical directors who are
27 responsible for the provision of health care services provided to covered persons. Compensation
28 to persons involved in utilization review shall not contain any direct or indirect incentives for
29 them to make any particular review decisions. Compensation to utilization reviewers shall not be
30 directly or indirectly based on the number or type of noncertifications they render. In issuing a
31 utilization review decision, an insurer shall: obtain all information required to make the decision,
32 including pertinent clinical information; employ a process to ensure that utilization reviewers
33 apply clinical review criteria consistently; and issue the decision in a timely manner pursuant to
34 this section.
35 (d1) Consultation Prior to Issuing Noncertifications. – If an insurer is questioning the
36 medical necessity of a health care service, the insurer must notify the covered person's relevant
37 provider that medical necessity is being questioned within five business days of the date the
38 insurer received the utilization review request for the health care service in question. Prior to
39 issuing a noncertification, the covered person's provider must be given the opportunity to discuss
40 the medical necessity of the health care service on the telephone with the medical doctor who
41 will be responsible for making the utilization review determination of the health care service
42 under review.
43 (e) Insurer Responsibilities. – Every insurer shall:shall do all of the following regarding
44 its utilization review process under this section:
45 (1) Routinely assess the effectiveness and efficiency of its utilization review
46 program.
47 (2) Coordinate the utilization review program with its other medical management
48 activity, including quality assurance, credentialing, provider contracting, data
49 reporting, grievance procedures, processes for assessing satisfaction of
50 covered persons, and risk management.
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1 (3) Provide covered persons and their providers with access to its review staff by
2 a toll-free or collect call telephone number whenever any provider is required
3 to be available to provide services which may require prior certification to any
4 plan enrollee. Every insurer shall establish standards for telephone
5 accessibility and monitor telephone service as indicated by average speed of
6 answer and call abandonment rate, on at least a month-by-month basis, to
7 ensure that telephone service is adequate, and take corrective action when
8 necessary.
9 (4) Limit its requests for information to only that information that is necessary to
10 certify the admission, procedure or treatment, length of stay, and frequency
11 and duration of health care services.
12 (5) Have written procedures for making utilization review decisions and for
13 notifying covered persons of those decisions.
14 (6) Have written procedures to address the failure or inability of a provider or
15 covered person to provide all necessary information for review. If a provider
16 or covered person fails to release necessary information in a timely manner,
17 the insurer may deny certification.
18 (7) Maintain a complete list of health care services for which utilization review is
19 required, including for all health care services where utilization review is to
20 be performed by an entity under contract with the insurer.
21 (f) Prospective and Concurrent Utilization Reviews Based Upon Type of Health Care
22 Service. – As used in this subsection, the term "necessary information" includes the results of
23 any patient examination, clinical evaluation, or second opinion that may be required. Prospective
24 and concurrent Utilization review determinations shall be communicated to the covered person's
25 provider within three business days after the insurer obtains all necessary information about the
26 admission, procedure, or health care service. as follows:
27 (1) For non-urgent health care services: If an insurer requires a utilization review
28 of a health care service, the insurer must make a utilization review
29 determination or noncertification and notify the covered person and the
30 covered person's provider within 48 hours of obtaining all necessary
31 information to make the utilization review determination or noncertification. If
32 a utilization review request is missing clinical information that is reasonably
33 necessary to constitute a completed request, an insurer shall notify the provider
34 of the specific information necessary to complete the utilization review as soon
35 as possible, but not later than 48 hours after receipt of the initial utilization
36 review request. The requesting provider or a member of the requesting
37 provider's clinical or administrative staff may submit the specified information
38 within 14 business days of the notification that clinical information is missing.
39 If additional information is requested, the insurer shall communicate a decision
40 on the request within two business days of receiving the additional information.
41 (2) For urgent health care services: An insurer must render a utilization review
42 determination or noncertification concerning urgent health care services and
43 notify the covered person and the covered person's provider of that utilization
44 review determination or noncertification not later than 24 hours after receiving
45 all necessary information needed to complete the review of the requested
46 health care services.
47 (3) For emergency services: All of the following shall apply to utilization review
48 for emergency services:
49 a. An insurer may not require a utilization review for prehospital
50 transportation or the provision of emergency services.
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1 b. An insurer shall allow a covered person and the covered person's
2 provider a minimum period of 24 hours following an emergency
3 admission or the provision of emergency services for the covered
4 person or the relevant provider to notify the insurer of the admission
5 or provision of emergency services. If the admission or emergency
6 service occurs on a holiday or weekend, an insurer cannot require
7 notification until the next business day after the admission or provision
8 of the emergency services.
9 c. An insurer shall cover emergency services necessary to screen and
10 stabilize a covered person. If a provider attests in writing to