HB-4933, As Passed Senate, June 9, 2016

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4933

     A bill to amend 2000 PA 251, entitled

"Patient's right to independent review act,"

by amending sections 3, 5, 7, 9, 11, 13, 17, 19, 23, 25, and 27

(MCL 550.1903, 550.1905, 550.1907, 550.1909, 550.1911, 550.1913,

550.1917, 550.1919, 550.1923, 550.1925, and 550.1927), section 3 as

amended by 2006 PA 542 and sections 11, 13, and 23 as amended by

2000 PA 398.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3. As used in this act:

     (a) "Adverse determination" means a determination by a health

carrier or its designee utilization review organization that an

admission, availability of care, continued stay, or other health

care service that is a covered benefit has been reviewed and, has

been based on the information provided, does not meet the health

carrier's requirements for medical necessity, appropriateness,

health care setting, level of care, or effectiveness, and the

requested service or payment for the service is therefore denied,

reduced, or terminated. Failure to respond in a timely manner to a

request for a determination constitutes is an adverse

determination.

     (b) "Ambulatory review" means utilization review of health

care services performed or provided in an outpatient setting.

     (c) "Authorized representative" means any of the following:

     (i) A person to whom a covered person has given express

written consent to represent the covered person in an external

review.

     (ii) A person authorized by law to provide substituted consent

for a covered person.

     (iii) If the covered person is unable to provide consent, a

family member of the covered person or the covered person's

treating health care professional.

     (d) "Case management" means a coordinated set of activities

conducted for individual patient management of serious,

complicated, protracted, or other health conditions.

     (e) "Certification" means a determination by a health carrier

or its designee utilization review organization that an admission,

availability of care, continued stay, or other health care service

has been reviewed and, based on the information provided, satisfies

the health carrier's requirements for medical necessity,

appropriateness, health care setting, level of care, and

effectiveness.

     (f) "Clinical review criteria" means the written screening

procedures, decision abstracts, clinical protocols, and practice

guidelines used by a health carrier to determine the necessity and

appropriateness of health care services.

     (g) "Commissioner" means the commissioner of the office of

financial and insurance services.

(g) (h) "Concurrent review" means utilization review conducted

during a patient's hospital stay or course of treatment.

(h) (i) "Covered benefits" or "benefits" means those health

care services to which a covered person is entitled under the terms

of a health benefit plan.

(i) (j) "Covered person" means a policyholder, subscriber,

member, enrollee, or other individual participating in a health

benefit plan.

     (j) "Department" means the department of insurance and

financial services.

     (k) "Director" means the director of the department.

(l) (k) "Discharge planning" means the formal process for

determining, prior to before discharge from a facility, the

coordination and management of the care that a patient receives

following discharge from a the facility.

(m) (l) "Disclose" means to release, transfer, or otherwise

divulge protected health information to any person other than the

individual who is the subject of the protected health information.

     (n) "Evidence-based standard" means the conscientious,

explicit, and judicious use of the current best evidence based on

the overall systematic review of the research in making decisions

about the care of individual patients.

(o) (m) "Expedited internal grievance" means an expedited

grievance under section 2213(1)(l) of the insurance code of 1956,

1956 PA 218, MCL 500.2213, or section 404(4) of the nonprofit

health care corporation reform act, 1980 PA 350, MCL 550.1404.

(p) (n) "Facility" or "health facility" means:

     (i) A facility or agency or a part of a facility or agency

that is licensed or authorized under parts 201 to 217 of the public

health code, 1978 PA 368, MCL 333.20101 to 333.21799e. , or a

licensed part thereof.

     (ii) A psychiatric hospital, psychiatric unit, partial

hospitalization psychiatric program, or center for persons with

disabilities operated by the department of community health and

human services or certified or licensed under the mental health

code, 1974 PA 258, MCL 330.1001 to 330.2106.

     (iii) A facility providing outpatient physical therapy

services, including speech pathology services.

     (iv) A kidney disease treatment center, including a

freestanding hemodialysis unit.

     (v) An ambulatory health care facility.

     (vi) A tertiary health care service facility.

     (vii) A substance abuse treatment use disorder services

program licensed under parts 61 to 65 part 62 of the public health

code, 1978 PA 368, MCL 333.6101 to 333.6523.333.6230 to 333.6251.

     (viii) An outpatient psychiatric clinic.

     (ix) A home health agency.

     (q) "Final adverse determination" means an adverse

determination involving a covered benefit that has been upheld by a

health carrier, or its designee utilization review organization, at

the completion of the health carrier's internal grievance process

procedures as set forth in section 2213 of the insurance code of

1956, 1956 PA 218, MCL 500.2213, or sections 404 or 407 of the

nonprofit health care corporation reform act, 1980 PA 350, MCL

550.1404 and MCL 550.1407.

(r) (o) "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 covered health care services.

(s) (p) "Health care professional" means a person an

individual licensed, certified, or registered, or otherwise

authorized to engage in a health profession under parts 61 to 65 or

161 to 183 of the public health code, 1978 PA 368, MCL 333.6101 to

333.6523, and MCL 333.16101 to 333.18311.333.18315.

(t) (q) "Health care provider" or "provider" means a health

care professional or a health facility.

(u) (r) "Health care services" means services for the

diagnosis, prevention, treatment, cure, or relief of a health

condition, illness, injury, or disease.

(v) (s) "Health carrier" means an entity a person that is

subject to the insurance laws and regulations of this state, or

subject to the jurisdiction of the commissioner, director, that

contracts or offers to contract to provide, deliver, arrange for,

pay for, or reimburse any of the costs of health care services,

including a sickness and accident insurance company, a health

maintenance organization, a nonprofit health care corporation, a

nonprofit dental care corporation operating under 1963 PA 125, MCL

550.351 to 550.373, or any other entity person providing a plan of

health insurance, health benefits, or health services. Health

carrier does not include a state department or agency administering

a plan of medical assistance under the social welfare act, 1939 PA

280, MCL 400.1 to 400.119b.

(w) (t) "Health information" means information or data,

whether oral or recorded in any form or medium, and personal facts

or information about events or relationships that relates to 1 or

more of the following:

     (i) The past, present, or future physical, mental, or

behavioral health or condition of an individual or a member of the

individual's family.

     (ii) The provision of health care services to an individual.

     (iii) Payment for the provision of health care services to an

individual.

(x) (u) "Independent review organization" means an entity a

person that conducts independent external reviews of adverse

determinations.

     (y) "Medical or scientific evidence" means evidence found in

any of the following sources:

     (i) Peer-reviewed scientific studies published in or accepted

for publication by medical journals that meet nationally recognized

requirements for scientific manuscripts and that submit most of

their published articles for review by experts who are not part of

the editorial staff.

     (ii) Peer-reviewed medical literature, including literature

relating to therapies reviewed and approved by a qualified

institutional review board, biomedical compendia, and other medical

literature that meet the criteria of the National Institutes of

Health's United States National Library of Medicine for indexing in

the former Index Medicus or its current online version, MEDLINE,

and Elsevier B. V. for indexing in EMBASE.

     (iii) Medical journals recognized by the secretary of the

United States Department of Health and Human Services under 42 USC

1395x(t)(2)(B)(ii)(I).

     (iv) The following standard reference compendia:

     (A) The American Hospital Formulary Service drug information.

     (B) Drug facts and comparisons.

     (C) The American Dental Association's accepted dental

therapeutics.

     (D) The United States Pharmacopoeia drug information.

     (v) Findings, studies, or research conducted by or under the

auspices of federal government agencies and nationally recognized

federal research institutes, including the following:

     (A) The Agency for Healthcare Research and Quality.

     (B) The National Institutes of Health.

     (C) The National Cancer Institute.

     (D) The National Academy of Sciences.

     (E) The Centers for Medicare and Medicaid Services.

     (F) The United States Food and Drug Administration.

     (G) Any national board recognized by the National Institutes

of Health for the purpose of evaluating the medical value of health

care services.

     (vi) Any other medical or scientific evidence that is

comparable to the sources listed in subparagraphs (i) to (v).

     (z) "Person" means an individual or a corporation,

partnership, association, joint venture, joint stock company,

trust, unincorporated organization, or similar entity, or any

combination of these.

(aa) (v) "Prospective review" means utilization review

conducted prior to before an admission or a course of treatment.

(bb) (w) "Protected health information" means health

information that identifies an individual who is the subject of the

information or with respect to which there is a reasonable basis to

believe that the information could be used to identify an

individual.

(cc) (x) "Retrospective review" means a review of medical

necessity conducted after services have been provided to a patient,

but does not include the review of a claim that is limited to an

evaluation of reimbursement levels, veracity of documentation,

accuracy of coding, or adjudication for payment.

(dd) (y) "Second opinion" means an opportunity or requirement

to obtain a clinical evaluation by a provider other than the one

originally making a recommendation for a proposed health service to

assess the clinical necessity and appropriateness of the initial

proposed health service.

(ee) (z) "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.

(ff) (aa) "Utilization review organization" means an entity a

person that conducts utilization review, other than a health

carrier performing a review for its own health plans.

     Sec. 5. (1) Except as otherwise provided in subsection (2),

this act applies to all health carriers. that provide or perform

utilization review.

     (2) This act does not apply to a policy or certificate that

provides coverage only for specified accident or accident-only

coverage, credit, disability income, hospital indemnity, long-term

care insurance, as that term is defined in section 3901 of the

insurance code of 1956, 1956 PA 218, MCL 500.3901, or any other

limited supplemental benefit other than specified disease, dental,

vision care, or care provided pursuant to a system of health care

delivery and financing operating under section 3573 of the

insurance code of 1956, 1956 PA 218, MCL 500.3573, medicare

Medicare supplement policy of insurance, coverage under a plan

through medicare, Medicare, or the federal employees health

benefits program, any coverage issued under chapter 55 of title 10

of the United States Code, 10 U.S.C. USC 1071 to 1109, 1110b, and

any coverage issued as supplement to that coverage, any coverage

issued as supplemental to liability insurance, worker's disability

compensation or similar insurance, automobile medical-payment

insurance, or any insurance under which benefits are payable with

or without regard to fault, whether written on a group blanket or

individual basis.

     Sec. 7. (1) A health carrier shall provide written notice to a

covered person in plain English of the internal grievance and

external review processes at the time the health carrier sends

written notice of an adverse determination.

     (2) Except as provided in subsection (3)(a), a request for an

external review under section 11 or 13 shall must not be made until

the covered person has exhausted the health carrier's internal

grievance process provided for by law.

     (3) The written notice of the right to request an external

review for an adverse determination issued before the service is

provided to a covered person shall be in plain English and shall

must include all of the following:

     (a) A statement informing the covered person of all of the

following:

     (i) If the covered person has a medical condition where such

that the time frame for completion of an expedited internal

grievance would seriously jeopardize the life or health of the

covered person or would jeopardize the covered person's ability to

regain maximum function, as substantiated by a physician either

orally or in writing, the covered person or the covered person's

authorized representative may file a request for an expedited

external review under section 13 at the same time the covered

person or the covered person's authorized representative files a

request for an expedited internal grievance subject to section

13(3). A covered person who files a request under this subparagraph

is considered to have exhausted the health carrier's internal

grievance process for purposes of subsection (2).

     (ii) The covered person or the covered person's authorized

representative may file a grievance under the health carrier's

internal grievance process, but if the health carrier has not

issued a written decision to the covered person or the covered

person's authorized representative within the required time and

without the covered person or the covered person's authorized

representative requesting or agreeing to a delay, the covered

person or the covered person's authorized representative may file a

request for external review under section 9 and shall be is

considered to have exhausted the health carrier's internal

grievance process for purposes of subsection (2).

     (iii) A health carrier may waive its internal grievance

process and the requirement for a covered person to exhaust the

process before filing a request for an external review or an

expedited external review.

     (iv) The covered person is considered to have exhausted a

health carrier's internal grievance process if the health carrier

has failed to comply with the requirements of the internal

grievance process unless the failure or failures are based on de

minimis violations that do not cause, and are not likely to cause,

prejudice or harm to the covered person.

     (b) A copy of the description of both the standard and

expedited external review procedures the health carrier is required

to provide under section 25, highlighting the provisions in the

external review procedures that give the covered person or the

covered person's authorized representative the opportunity to

submit additional information and including any forms used to

process an external review.

     (c) As part of any forms provided under subdivision (b),

include an authorization form, or other document approved by the

commissioner, director, by which the covered person, for purposes

of conducting an external review under this act, authorizes the

health carrier and health care provider to disclose protected

health information, including medical records, concerning the

covered person that are pertinent to the external review.

     (4) The written notice of the right to request an external

review for an adverse determination issued after the service was

provided to the covered person shall be in plain English, shall

must include the standard external review procedures information

required in under subsection (3) , and shall be provided to the

covered person in the manner prescribed by the

commissioner.director.

     Sec. 9. (1) Except for a request for an expedited external

review under section 13, all requests for external review shall

must be made in writing to the commissioner.director.

     (2) A written notice required to be provided under this act

must be provided in a culturally and linguistically appropriate

manner, as required under 45 CFR 147.136(b)(2)(ii)(E).

     (3) A health carrier may satisfy a requirement for the

delivery of a notice to a covered person under this act by

complying with 29 CFR 2520.104b-1(c) with respect to the use of

electronic communication.

     Sec. 11. (1) Not later than 60 days or, after December 31,

2016, 120 days after the date of receipt of a notice of an adverse

determination or final adverse determination under section 7, a

covered person or the covered person's authorized representative

may file a request for an external review with the commissioner.

director. Upon receipt of a request for an external review, the

commissioner director immediately shall notify and send a copy of

the request to the health carrier that made the adverse

determination or final adverse determination that is the subject of

the request.

     (2) Not later than 5 business days after the date of receipt

of a request for an external review, the commissioner director

shall complete a preliminary review of the request to determine all

of the following:

     (a) Whether the individual is or was a covered person in the

health benefit plan at the time the health care service was

requested or, in the case of for a retrospective review, was a

covered person in the health benefit plan at the time the health

care service was provided.

     (b) Whether the health care service that is the subject of the

adverse determination or final adverse determination reasonably

appears to be a covered service under the covered person's health

benefit plan.

     (c) Whether the covered person has exhausted the health

carrier's internal grievance process, unless the covered person is

not required to exhaust the health carrier's internal grievance

process.

     (d) The Whether the covered person has provided all the

information and forms required by the commissioner director that

are necessary to process an external review, including the health

information release form.

     (e) Whether the health care service that is the subject of the

adverse determination or final adverse determination appears to

involve issues of medical necessity or clinical review criteria.

     (3) If a request for an external review involves issues of

experimental or investigational service or treatment, not later

than 5 business days after the date of receipt of a request for an

external review, the director shall complete a preliminary review

of the request to determine all of the following:

     (a) Whether the individual is or was a covered person in the

health benefit plan at the time the health care service was

requested or, for a retrospective review, was a covered person in

the health benefit plan at the time the health care service was

provided.

     (b) Whether the recommended or requested health care service

or treatment that is the subject of the adverse determination or

final adverse determination is both of the following:

     (i) A covered benefit under the covered person's health

benefit plan except for the health carrier's determination that the

service or treatment is experimental or investigational for a

particular medical condition.

     (ii) Not explicitly listed as an excluded benefit under the

covered person's health benefit plan with the health carrier.

     (c) Whether the covered person's treating provider with the

authority to treat under the public health code, 1978 PA 368, MCL

333.1101 to 333.25211, has certified that 1 or more of the

following situations are applicable:

     (i) Standard health care services or treatments have not been

effective in improving the condition of the covered person.

     (ii) Standard health care services or treatments are not

medically appropriate for the covered person.

     (iii) There is no available standard health care service or

treatment covered by the health carrier that is more beneficial

than the recommended or requested health care service or treatment

described in subdivision (d).

     (d) Whether the covered person's treating provider with the

authority to treat under the public health code, 1978 PA 368, MCL

333.1101 to 333.25211, has done either of the following:

     (i) Recommended a health care service or treatment that the

treating provider certifies, in writing, is likely to be more

beneficial to the covered person, in the treating provider's

opinion, than any available standard health care services or

treatments.

     (ii) If the treating provider is a licensed, board certified

or board eligible physician qualified to practice in the area of

medicine appropriate to treat the covered person's condition,

certified in writing that scientifically valid studies using

accepted protocols demonstrate that the health care service or

treatment requested by the covered person that is the subject of

the adverse determination or final adverse determination is likely

to be more beneficial to the covered person than any available

standard health care services or treatments.

     (e) Whether the covered person has exhausted the health

carrier's internal grievance process, unless the covered person is

not required to exhaust the health carrier's internal grievance

process under this act.

     (f) Whether the covered person has provided all the

information and forms required by the director that are necessary

to process an external review, including the health information

release form.

(4) (3) Upon completion of the a preliminary review under

subsection (2) or (3), the commissioner director immediately shall

provide a written notice in plain English to the covered person

and, if applicable, the covered person's authorized representative

as to whether the request is complete and whether it has been

accepted for external review.

(5) (4) If On accepting a request is accepted for external

review, the commissioner director shall do both of the following:

     (a) Include in the written notice under subsection (3) (4) a

statement that the covered person or the covered person's

authorized representative may submit to the commissioner director

in writing within 7 business days following the date of the notice

additional information and supporting documentation that the

reviewing entity shall will consider when conducting the external

review.

     (b) Immediately notify the health carrier in writing of the

acceptance of the request for external review.

(6) (5) If a request is not accepted for external review

because the request is not complete, the commissioner director

shall inform the covered person and, if applicable, the covered

person's authorized representative what information or materials

are needed to make the request complete. The covered person or, if

applicable, the covered person's authorized representative shall

provide the information or materials identified by the director

within 30 days after receiving the notification. If a request is

not accepted for external review, the commissioner director shall

provide written notice in plain English to the covered person, if

applicable, the covered person's authorized representative, and the

health carrier of the reasons for its nonacceptance.

(7) (6) If a request is accepted for external review and

appears to involve issues of medical necessity or clinical review

criteria, the commissioner director shall assign an independent

review organization at the time the request is accepted for

external review. The assigned independent review organization shall

must be approved under this act to conduct external reviews. and

The assigned independent review organization shall provide a

written recommendation to the commissioner director on whether to

uphold or reverse the adverse determination or the final adverse

determination.

(8) (7) If a request is accepted for external review, does not

appear to involve issues of medical necessity or clinical review

criteria, and appears to only involve purely contractual provisions

of a health benefit plan, such as covered benefits or accuracy of

coding, the commissioner director may keep the request and conduct

his or her own external review or may assign an independent review

organization as provided in subsection (6) (7) at the time the

request is accepted for external review. Except as otherwise

provided in subsection (16), (18), if the commissioner director

keeps a request, he or she shall review the request and issue a

decision upholding or reversing the adverse determination or final

adverse determination within the same time limits and subject to

all other requirements of this act for requests assigned to an

independent review organization. If at any time during the

commissioner's director's review of a request it is determined that

a request does appear to involve issues of medical necessity or

clinical review criteria, the commissioner director shall

immediately assign the request to an independent review

organization approved under this act to conduct external reviews.

(9) (8) In reaching a recommendation, the reviewing entity is

not bound by any decisions or conclusions reached during the health

carrier's utilization review process or the health carrier's

internal grievance process.

(10) (9) Not later than 7 business days after the date of the

notice under subsection (4)(b), (5)(b), the health carrier or its

designee utilization review organization shall provide to the

reviewing entity the documents and any information considered in

making the adverse determination or the final adverse

determination. Except as provided in subsection (10), (11), the

reviewing entity shall not delay the external review because of

failure by the health carrier or its designee utilization review

organization to provide the documents and information within 7

business days. shall not delay the conduct of the external review.

(11) (10) Upon receipt of a notice from the assigned

independent review organization that the health carrier or its

designee utilization review organization has failed to provide the

documents and information within 7 business days, the commissioner

director may terminate the external review and make a decision to

reverse the adverse determination or final adverse determination

and shall immediately notify the assigned independent review

organization, the covered person, if applicable, the covered

person's authorized representative, and the health carrier of his

or her decision.

(12) (11) The reviewing entity shall review all of the

information and documents received under subsection (9) (10) and

any other information submitted in writing by the covered person or

the covered person's authorized representative under subsection

(4)(a) (5)(a) that has been forwarded by the commissioner.

director. Upon receipt of any information submitted by the covered

person or the covered person's authorized representative under

subsection (4)(a), (5)(a), at the same time the commissioner

director forwards the information to the independent review

organization, the commissioner director shall forward the

information to the health carrier.

(13) (12) The health carrier may reconsider its adverse

determination or final adverse determination that is the subject of

the external review. Reconsideration by the health carrier of its

adverse determination or final adverse determination does not delay

or terminate the external review. The external review may only be

terminated if the health carrier decides, upon completion of its

reconsideration, to reverse its adverse determination or final

adverse determination and provide coverage or payment for the

health care service that is the subject of the adverse

determination or final adverse determination. Immediately upon

making the decision to reverse its adverse determination or final

adverse determination, the health carrier shall notify the covered

person, if applicable the covered person's authorized

representative, if applicable the assigned independent review

organization, and the commissioner director in writing of its

decision. The reviewing entity shall terminate the external review

upon receipt of the notice from the health carrier.

(14) (13) In addition to the documents and information

provided under subsection (9), (10), the reviewing entity, to the

extent the information or documents are available and the reviewing

entity considers them appropriate, shall consider the following in

reaching a recommendation:

     (a) The covered person's pertinent medical records.

     (b) The attending health care professional's recommendation.

     (c) Consulting reports from appropriate health care

professionals and other documents submitted by the health carrier,

the covered person, the covered person's authorized representative,

or the covered person's treating provider.

     (d) The terms of coverage under the covered person's health

benefit plan with the health carrier.

     (e) The most appropriate practice guidelines, which may

include generally accepted practice guidelines, evidence-based

practice guidelines, or any other practice guidelines developed by

the federal government or national or professional medical

societies, boards, and associations.

     (f) Any applicable clinical review criteria developed and used

by the health carrier or its designee utilization review

organization.

     (15) If a request for an external review involves issues of

experimental or investigational service or treatment, in addition

to the documents and information provided under subsections (10)

and (14), the reviewing entity, in reaching a recommendation, shall

consider whether either of the following applies:

     (a) The recommended or requested health care service or

treatment has been approved by the United States Food and Drug

Administration, if applicable, for the condition.

     (b) Medical or scientific evidence or evidence-based standards

demonstrate that the expected benefits of the recommended or

requested health care service or treatment are more likely than not

to be more beneficial to the covered person than the benefits of

any available standard health care service or treatment and the

adverse risks of the recommended or requested health care service

or treatment would not be substantially increased over those of

available standard health care services or treatments.

(16) (14) The assigned independent review organization shall

provide its recommendation to the commissioner not later than

director within 14 days after the assignment by the commissioner

director of the request for an external review. The independent

review organization shall include in its recommendation all of the

following:

     (a) A general description of the reason for the request for

external review.

     (b) The date the independent review organization received the

assignment from the commissioner director to conduct the external

review.

     (c) The date the external review was conducted.

     (d) The date of its recommendation.

     (e) The principal reason or reasons for its recommendation.

     (f) The rationale for its recommendation.

     (g) References to the evidence or documentation, including the

practice guidelines, considered in reaching its recommendation.

(17) (15) Upon receipt of the assigned independent review

organization's recommendation under subsection (14), (16), the

commissioner director immediately shall review the recommendation

to ensure that it is not contrary to the terms of coverage under

the covered person's health benefit plan with the health carrier.

(18) (16) The commissioner director shall provide written

notice in plain English to the covered person, if applicable the

covered person's authorized representative, and the health carrier

of the decision to uphold or reverse the adverse determination or

the final adverse determination not later than within 7 business

days after the date of receipt of the selected independent review

organization's recommendation. If the commissioner director has

kept a request for review, the commissioner director shall provide

written notice in plain English to the covered person, if

applicable the covered person's authorized representative, and the

health carrier of his or her decision not later than within 14 days

after the decision to keep the request. The commissioner director

shall include in a notice under this subsection all of the

following:

     (a) The principal reason or reasons for the decision,

including, as an attachment to the notice or in any other manner

the commissioner director considers appropriate, the information

provided as determined by the reviewing entity under subsection

(14).(16).

     (b) If appropriate, the principal reason or reasons why the

commissioner director did not follow the assigned independent

review organization's recommendation.

(19) (17) Upon receipt of a notice of a decision under

subsection (16) (18) reversing the adverse determination or final

adverse determination, the health carrier immediately shall approve

the coverage that was the subject of the adverse determination or

final adverse determination.

     Sec. 13. (1) Except as provided in subsection (11), (12), a

covered person or the covered person's authorized representative

may make a request for an expedited external review with the

commissioner director within 10 days after the covered person

receives an adverse determination if both of the following are

met:apply:

     (a) The adverse determination involves a medical condition of

the covered person for which the time frame for completion of an

expedited internal grievance would seriously jeopardize the life or

health of the covered person or would jeopardize the covered

person's ability to regain maximum function as substantiated by a

physician either orally or in writing.

     (b) The covered person or the covered person's authorized

representative has filed a request for an expedited internal

grievance.

     (2) At the time When the commissioner director receives a

request for an expedited external review, the commissioner director

immediately shall notify and provide a copy of the request to the

health carrier that made the adverse determination or final adverse

determination. If the commissioner director determines the request

meets the reviewability requirements under section 11(2) or (3),

the commissioner director shall assign an independent review

organization that has been approved under this act to conduct the

expedited external review and to provide a written recommendation

to the commissioner director on whether to uphold or reverse the

adverse determination or final adverse determination.

     (3) If a covered person has not completed the health carrier's

expedited internal grievance process, the independent review

organization shall determine immediately after receipt of the

assignment to conduct the expedited external review whether the

covered person will be required to complete the expedited internal

grievance prior to before conducting the expedited external review.

If the independent review organization determines that the covered

person must first complete the expedited internal grievance

process, the independent review organization immediately shall

notify the covered person and, if applicable, the covered person's

authorized representative of this determination and that it will

not proceed with the expedited external review until the covered

person completes the expedited internal grievance.

     (4) In reaching a recommendation, the an assigned independent

review organization is not bound by any decisions or conclusions

reached during the health carrier's utilization review process or

the health carrier's internal grievance process.

     (5) Not later than 12 hours after the a health carrier

receives the a notice under subsection (2), the health carrier or

its designee utilization review organization shall provide or

transmit all necessary documents and information considered in

making the adverse determination or final adverse determination to

the assigned independent review organization electronically or by

telephone, or facsimile, or any other available expeditious method.

     (6) In addition to the documents and information provided or

transmitted under subsection (5), the assigned independent review

organization, to the extent the information or documents are

available and the independent review organization considers them

appropriate, shall consider the following in reaching a

recommendation:

     (a) The covered person's pertinent medical records.

     (b) The attending health care professional's recommendation.

     (c) Consulting reports from appropriate health care

professionals and other documents submitted by the health carrier,

covered person, the covered person's authorized representative, or

the covered person's treating provider.

     (d) The terms of coverage under the covered person's health

benefit plan with the health carrier.

     (e) The most appropriate practice guidelines, which may

include generally accepted practice guidelines, evidence-based

practice guidelines, or any other practice guidelines developed by

the federal government or national or professional medical

societies, boards, and associations.

     (f) Any applicable clinical review criteria developed and used

by the health carrier or its designee utilization review

organization in making adverse determinations.

     (7) If a request for an external review involves issues of

experimental or investigational service or treatment, in addition

to the documents and information provided under subsections (5) and

(6), the assigned independent review organization, in reaching a

recommendation, shall consider whether either of the following

applies:

     (a) The recommended or requested health care service or

treatment has been approved by the United States Food and Drug

Administration, if applicable, for the condition.

     (b) Medical or scientific evidence or evidence-based standards

demonstrate that the expected benefits of the recommended or

requested health care service or treatment are more likely than not

to be more beneficial to the covered person than the benefits of

any available standard health care service or treatment and the

adverse risks of the recommended or requested health care service

or treatment would not be substantially increased over those of

available standard health care services or treatments.

(8) (7) The An assigned independent review organization shall

provide its recommendation to the commissioner director as

expeditiously as the covered person's medical condition or

circumstances require, but in no event not more than 36 hours after

the date the commissioner director received the request for an

expedited external review.

(9) (8) Upon receipt of the an assigned independent review

organization's recommendation, the commissioner director

immediately shall review the recommendation to ensure that it is

not contrary to the terms of coverage under the covered person's

health benefit plan with the health carrier.

(10) (9) As expeditiously as the covered person's medical

condition or circumstances require, but in no event not more than

24 hours after receiving the recommendation of the assigned

independent review organization, the commissioner director shall

complete the review of the independent review organization's

recommendation and notify the covered person, if applicable, the

covered person's authorized representative, and the health carrier

of the decision to uphold or reverse the adverse determination or

final adverse determination. If this the notice was under this

subsection is not in writing, within 2 days after the date of

providing that the notice, the commissioner director shall provide

written confirmation of the decision to the covered person, if

applicable, the covered person's authorized representative, and the

health carrier and include the information required in section

11(16).11(18).

(11) (10) Upon receipt of a notice of a decision under

subsection (9) (10) reversing the adverse determination or final

adverse determination, the health carrier immediately shall approve

the coverage that was the subject of the adverse determination or

final adverse determination.

(12) (11) An expedited external review shall must not be

provided for retrospective adverse determinations or retrospective

final adverse determinations.

     Sec. 17. (1) The commissioner director shall approve

independent review organizations eligible to be assigned to conduct

external reviews under this act to ensure that an independent

review organization satisfies the minimum standards established

under section 19.

     (2) The commissioner director shall develop an application

form for initially approving and for reapproving independent review

organizations to conduct external reviews.

     (3) Any independent review organization wishing to be approved

to conduct external reviews under this act shall submit the

application form developed under subsection (2) and include with

the form all documentation and information necessary for the

commissioner director to determine if the independent review

organization satisfies the minimum qualifications established under

section 19. The commissioner director may charge an application fee

that independent review organizations shall submit to the

commissioner director with an application for approval and or

reapproval.

     (4) An approval under this section is effective for 2 years,

unless the commissioner director determines before expiration of

the approval that the independent review organization is not

satisfying the minimum standards established under section 19. If

the commissioner director determines that an independent review

organization no longer satisfies the minimum standards established

under section 19, the commissioner director shall terminate the

approval of the independent review organization and remove the

independent review organization from the list of independent review

organizations approved to conduct external reviews under this act

that is maintained by the commissioner director under subsection

(5).

     (5) The commissioner director shall maintain and periodically

update a list of approved independent review organizations.

     Sec. 19. (1) To be approved under section 17 to conduct

external reviews, an independent review organization shall must do

both all of the following:

     (a) Have and maintain written policies and procedures that

govern all aspects of both the standard external review process and

the expedited external review process under sections 11 and 13 that

include, at a minimum, a quality assurance mechanism in place that

does all of the following:

     (i) Ensures that external reviews are conducted within the

specified time frames and required notices are provided in a timely

manner.

     (ii) Ensures the selection of qualified and impartial clinical

peer reviewers to conduct external reviews on behalf of the

independent review organization and suitable matching of reviewers

to specific cases.

     (iii) Ensures the confidentiality of medical and treatment

records and clinical review criteria.

     (iv) Ensures that any person employed by or under contract

with the independent review organization adheres to the

requirements of this act.

     (b) Agree to maintain and provide to the commissioner director

the information required in section 23.

     (c) Be accredited by a nationally recognized private

accrediting organization approved by the director.

     (2) A clinical peer reviewer assigned by an independent review

organization to conduct external reviews shall must be a physician

or other appropriate health care professional who meets all of the

following minimum qualifications:

     (a) Is an expert in the treatment of the covered person's

medical condition that is the subject of the external review.

     (b) Is knowledgeable about the recommended health care service

or treatment because he or she devoted in the immediately preceding

year a majority of his or her time in an active clinical practice

within the medical specialty most relevant to the subject of the

review.

     (c) Holds a nonrestricted license in a state of the United

States and, for physicians, a current certification by a recognized

American medical specialty board in the area or areas appropriate

to the subject of the external review.

     (d) Has no history of disciplinary actions or sanctions,

including loss of staff privileges or participation restrictions,

that have been taken or are pending by any hospital, governmental

agency or unit, or regulatory body that raise a substantial

question as to the clinical peer reviewer's physical, mental, or

professional competence or moral character.

     (3) An independent review organization may not own or control,

be a subsidiary of or in any way be owned or controlled by, or

exercise control with a health benefit plan, a national, state, or

local trade association of health benefit plans, or a national,

state, or local trade association of health care providers.

     (4) An independent review organization selected to conduct the

external review and any clinical peer reviewer assigned by the

independent organization to conduct the external review shall must

not have a material professional, familial, or financial conflict

of interest with any of the following:

     (a) The health carrier that is the subject of the external

review.

     (b) The covered person whose treatment is the subject of the

external review or the covered person's authorized representative.

     (c) Any officer, director, or management employee of the

health carrier that is the subject of the external review.

     (d) The health care provider, the health care provider's

medical group, or independent practice association recommending the

health care service or treatment that is the subject of the

external review.

     (e) The facility at which the recommended health care service

or treatment would be provided.

     (f) The developer or manufacturer of the principal drug,

device, procedure, or other therapy being recommended for the

covered person whose treatment is the subject of the external

review.

     (5) In determining whether an independent review organization

or a clinical peer reviewer of the independent review organization

has a material professional, familial, or financial conflict of

interest for purposes of subsection (4), the commissioner director

shall take into consideration situations where in which the

independent review organization to be assigned to conduct an

external review of a specified case or a clinical peer reviewer to

be assigned by the independent review organization to conduct an

external review of a specified case may have an apparent

professional, familial, or financial relationship or connection

with a person described in subsection (4), but that the

characteristics of that relationship or connection are such that

they are not a material professional, familial, or financial

conflict of interest that results in the disapproval of the

independent review organization or the clinical peer reviewer from

conducting the external review.

     Sec. 23. (1) An independent review organization assigned to

conduct an external review under section 11 or 13 shall maintain

for 3 years written records in the aggregate and by health carrier

on all requests for external review for which it conducted an

external review during a calendar year. Each independent review

organization required to maintain written records on all requests

for external review for which it was assigned to conduct an

external review shall submit to the commissioner, director, at

least annually, a report in the format specified by the

commissioner.director.

     (2) The report to the commissioner director under subsection

(1) shall must include in the aggregate and for each health carrier

all of the following:

     (a) The total number of requests for external review.

     (b) The number of requests for external review resolved and,

of those resolved, the number resolved upholding the adverse

determination or final adverse determination and the number

resolved reversing the adverse determination or final adverse

determination.

     (c) The average length of time for resolution.

     (d) A summary of the types of coverages or cases for which an

external review was sought, as provided in the format required by

the commissioner.director.

     (e) The number of external reviews under section 11(12) 11(13)

that were terminated as the result of a reconsideration by the

health carrier of its adverse determination or final adverse

determination after the receipt of additional information from the

covered person or the covered person's authorized representative.

     (f) Any other information the commissioner director may

request or require.

     (3) Each A health carrier shall maintain for 3 years written

records in the aggregate and for each type of health benefit plan

offered by the health carrier on all requests for external review

that are filed with the health carrier or that the health carrier

receives notice of from the commissioner director under this act.

Each A health carrier required to maintain written records on all

requests for external review shall submit to the commissioner,

director, at least annually, a report in the format specified by

the commissioner.director.

     (4) The report to the commissioner director under subsection

(3) shall must include in the aggregate and by type of health

benefit plan all of the following:

     (a) The total number of requests for external review.

     (b) From the number of requests for external review that are

filed directly with the health carrier, the number of requests

accepted for a full external review.

     (c) The number of requests for external review resolved and,

of those resolved, the number resolved upholding the adverse

determination or final adverse determination and the number

resolved reversing the adverse determination or final adverse

determination.

     (d) The average length of time for resolution.

     (e) A summary of the types of coverages or cases for which an

external review was sought, as provided in the format required by

the commissioner.director.

     (f) The number of external reviews under section 11(12) 11(13)

that were terminated as the result of a reconsideration by the

health carrier of its adverse determination or final adverse

determination after the receipt of additional information from the

covered person or the covered person's authorized representative.

     (g) Any other information the commissioner director may

request or require.

     Sec. 25. (1) Each A health carrier shall include a description

of the internal grievance and external review procedures in or

attached to the policy, certificate, membership booklet, outline of

coverage, or other evidence of coverage it provides to covered

persons.

     (2) The description under subsection (1) shall be in plain

English and shall must include all of the following:

     (a) A statement informing the covered person of his or her

right to file a request for an internal grievance and external

review of an adverse determination.

     (b) The commissioner's director's toll-free telephone number

and address.

     (c) A statement informing the covered person that, when filing

a request for an external review, the covered person will be

required to authorize the release of any medical records that may

be required to be reviewed for the purpose of reaching to reach a

decision on the external review.

     Sec. 27. The commissioner director may promulgate rules

pursuant to under the administrative procedures act of 1969, 1969

PA 306, MCL 24.201 to 24.328, necessary to carry out the provisions

of this act.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.

     Enacting section 2. This amendatory act does not take effect

unless House Bill No. 4935 of the 98th Legislature is enacted into

law.