It is enacted by the General Assembly as follows:

SECTION 1. Sections 23-17.12-3, 23-17.12-4, 23-17.12-6, 23-17.12-8, and 23-17.12-9 of the General Laws in Chapter 23-17.12 entitled "Health Care Services -- Utilization Review Act" are hereby amended to read as follows:

23-17.12-3. Regulation of review agents -- Certificate. -- (a) A review agent shall not conduct utilization review in the state of Rhode Island unless the department has granted the review agent a certificate.

(b) Review agents who are operating in Rhode Island prior to the promulgation of regulations pursuant to this chapter may continue to conduct utilization review until such time as the department promulgates regulations, develops required forms, and has acted on the application submitted by the review agent.

(c) Individuals shall not be required to hold separate certification under this chapter when acting as {ADD either ADD} an employee of{ADD , an affiliate of, a contractor for, or otherwise acting on behalf of ADD} a certified review agent.

(d) The department shall issue a certificate to an applicant that has met the minimum standards established by this chapter, and regulations promulgated in accordance with it, including the payment of such fees as required, and other applicable regulations of the department.

(e) A certificate issued under this chapter is not transferable; and the transfer of fifty percent (50%) or more of the ownership of a review agent shall be deemed a transfer.

(f) After consultation with the payers and providers of health care, no later than one (1) year after the effective date of this chapter, the department shall adopt regulations necessary to implement the provisions of this chapter including but not limited to the following:

(1) The requirement that the private review agent provide patients and providers with a summary of its utilization review plan including a summary of the standards, procedures and methods to be used in evaluating proposed or delivered health care services;

(2) The circumstances, if any, under which utilization review may be delegated to a provider-based {ADD any other ADD} utilization review program ; {ADD and evidence that such delegated agency is a certified utilization review agency pursuant to the requirements of this chapter; ADD}

(3) A complaint resolution process, acceptable to the department whereby patients, their physicians or other health care providers may seek prompt reconsideration or appeal of adverse decisions by the private review agent, as well as the resolution of complaints and other matters of which the review agent has received written notice thereof;

(4) The type and qualifications of personnel authorized to perform utilization review, including a requirement that only a licensed physician {ADD practitioner with the same licensure status as the ordering practitioner, physician ADD} or dentist in the same or a similar general specialty as typically manages the medical condition, procedure or treatment be permitted to make a final determination that care rendered or to be rendered is medically inappropriate;

(5) The requirement that each review agent shall utilize written medically acceptable screening criteria and review procedures which are established and periodically evaluated and updated with appropriate involvement from {ADD consultation with Rhode Island licensed ADD} physicians, including practicing physicians, and other health care providers.

(6) The requirement that, other than in exceptional circumstances, or when the patient's attending physician or dentist is not reasonably available, no determination that care rendered or to be rendered is medically inappropriate shall be made until an appropriately qualified and licensed review physician or dentist has spoken to the patient's attending {ADD provider, ADD} physician or dentist concerning such medical care;

(7) The requirement that, upon written request made by or on behalf of a patient, any determination that care rendered or to be rendered is medically inappropriate shall include the written evaluation and findings of the reviewing physician or dentist . {ADD ; provided, however, that the review agent is required to accept a verbal request made by or on behalf of a patient for such information where a provider or patient can demonstrate that a timely response is urgent; said verbal request must within seven (7) days be confirmed in writing; ADD}

(8) The requirement that a representative of the private review agent is reasonably accessible to patients; patient's family, and providers at least five (5) days a week during normal business hours.

(9) The policies and procedures to ensure that all applicable state and federal laws to protect the confidentiality of individual medical records are followed;

(10) The policies and procedures regarding the notification and conduct of patient interviews by the review agent.

(11) The requirement that no employee of, or other individual rendering an adverse determination for, a review agent may receive any financial incentives based upon the number of denials of certification made by such employee or individual.

(12) The requirement that immediate coverage be provided for treatment and/or hospitalization or other use of a provider's services or facilities for any patient for whom the treating provider determines the admission and/or treatment to be of an emergency nature. The emergency nature of the admission or treatment shall be documented and signed by a licensed physician and may be subject to review by a review agent.

(13) The requirement that a review agent shall make a determination, and shall communicate that determination within time-frames and by such means as specified by the department; and

(14) The requirement that except in circumstances as may be allowed by regulations promulgated pursuant to this chapter, no final adverse determination shall be made on any question relating to hospital, medical or other health care and/or medical services by any person other than a licensed physician , {ADD dentist, ADD} which determination shall be discussed by said physician with the affected provider or other designated or qualified professional or provider responsible for treatment of the patient.

(g) The director of health is authorized to establish such fees for initial application, renewal applications, and such other administrative actions as deemed necessary by the director to implement this chapter.

{ADD 23-17.12-4. Application. -- (1) An applicant for a certificate shall:

(A) Submit an application to the director; and

(B) Pay the application fee established by the director through regulation.

(2) The application shall:

(A) Be on a form and accompanied by supporting documentation that the director requires; and

(B) Be signed and verified by the applicant.

(3) In conjunction with the application, the private review agent shall submit information that the director requires including:

(A) A utilization review plan that includes:

(i) The standards and criteria to be utilized by the private review agent, provided however, that the agent may request that the state agency regard specific portions thereof or the entire document to constitute "trade secrets" within the meaning of that term in section 38-2-2(d)(2) of chapter 38-2 ;

(ii) Those circumstances, if any, under which utilization review may be delegated to a provider utilization review program; and

(iii) A complaint resolution process, consistent with section 23-17.12-9, whereby patients, physicians or other health care providers may seek prompt reconsideration or appeal of adverse determinations by the review agent as well as the resolution of other complaints regarding the review process.

(B) The type and qualifications of the personnel either employed or under contract to perform the utilization review;

(C) The procedures and policies to ensure that a representative of the review agent is reasonably accessible to patients and providers five (5) days a week during normal business hours;

(D) The policies and procedures to ensure that all applicable state and federal laws to protect the confidentiality of individual medical records are followed;

(E) A copy of the materials used to inform enrollees of the requirements under the health benefit plan for seeking utilization review or pre-certification and their rights under this chapter, including information on appealing adverse determinations;

(F) A copy of the materials designed to inform applicable patients and providers of the requirements of the utilization review plan;

(G) A list of the third party payers and business entities for which the private review agent is performing utilization review in this state and a brief description of the services it is providing for each client;

(H) Evidence that the review agent has not entered into a compensation agreement or contract with its employees or agents whereby the compensation of its employees or its agents is based upon a reduction of services or the charges therefore, the reduction of length of stay, or utilization of alternative treatment settings; provided nothing in this chapter shall prohibit capitation agreements and similar arrangements;

(I) Evidence of liability insurance or of assets sufficient to cover potential liability.

(4) Any changes in the review agents operations relative to certification requirements to the department for approval at least thirty (30) days prior to implementation.

(5) The information provided must demonstrate that the private review agent will comply with the regulations adopted by the director under this chapter.

(6) The application and other fees required under this chapter shall be sufficient to pay for the administrative costs of the certificate program and any other reasonable costs associated with carrying out the provisions of this chapter.

{ADD 23-17.12-6. Denial, suspension, or revocation of certificate. -- (a) The department may deny a certificate upon review of the application, if upon review of the application, it finds that the applicant proposing to conduct utilization review does not meet the standards required by this chapter or by any regulations promulgated pursuant to this chapter.

(b) The department may revoke a certificate and/or impose reasonable monetary penalties not to exceed five thousand dollars ($5,000) per violation in any case in which{ADD : (1) ADD} the review agent fails to comply substantially with the requirements of this chapter or of regulations adopted pursuant to this chapter , or if {ADD ; (2) ADD} the review agent fails to comply with the criteria used by it in its application for a certificate . {ADD ; or (3) the review agent refuses to permit examination by the director to determine compliance with the requirements of this chapter and regulations promulgated pursuant to the authority granted to the director in this chapter; provided, however, that such examination shall be subject to the confidentiality and "need to know" provisions of section 23-17.12-9(K). ADD} Such a determination{ADD s ADD} may involve consideration of any written grievances filed with the department against the review agent by patients or providers.

(c) Any applicant or certificate holder aggrieved by an order or a decision of the department made under this chapter without a hearing may, within thirty (30) days after notice of the order or decision, make a written request to the department for a hearing on the order or decision pursuant to section 42-35-15.

(d) The procedure governing hearings authorized by this section shall be in accordance with sections 42-35-9 through 42-35-13 as stipulated in section 42-35-14(a). A full and complete record shall be kept of all proceedings, and all testimony shall be recorded but need not be transcribed unless the decision is appealed pursuant to section 42-35-15. A copy or copies of the transcript may be obtained by any interested party upon payment of the cost of preparing the copy or copies. Witnesses may be subpoenaed by either party.

{ADD 23-17.12-8. Waiver of requirements. -- (a) Except for utilization review activities performed to determine the necessity and appropriateness of substance abuse and mental health care, treatment or services, the department shall waive all the requirements of this chapter, with the exception of those contained in sections 23-17.12-9, 12-12, 12-14, for a review agent that has received, maintains and provides evidence to the department of accreditation from the Utilization Review Accreditation Commission (URAC) or other organization approved by the director. Said waiver shall be applicable only to those services which are included under the accreditation by the Utilization Review Accreditation Commission or other approved organization.

{ADD (b) Utilization review agents subject to the waiver under subsection 23-17.12-8(a) shall nevertheless make available to providers and patients under utilization review external appeals where the final level of appeal to reverse an adverse determination is unsuccessful. Patients and providers shall be notified of the availability of such external appeals. All costs of such appeal, including the fee charged by the neutral physician, dentist or other practitioner and all administrative charges, shall be shared equally by the parties to the appeal. The external appeals agent, which shall not be a competitor of the utilization review agent involved, can only assess whether the utilization review agent appropriately applied its review criteria. The department shall by regulation establish maximum limits on administrative charges by external review agents. ADD}

(b) {ADD (c) ADD} The department shall waive the requirements {ADD of section 23-17.12-10 ADD} of this chapter for {ADD those activities of ADD} a review agent that operates only under {ADD are conducted pursuant to ADD} contract with the State or the federal government for utilization review of patients eligible for provider services under (1) Title XVIII and Title XIX of the Social Security Act (2) chapter 42-12.3 {ADD 12.3 ADD} of {ADD title 42 of ADD} the Rhode Island General Laws; (3) and the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS){ADD . ADD} ; provided, that a review agent performing such exempt services shall otherwise comply with all provisions of this chapter with respect to any utilization review performed by such review agent which is not so exempted. {ADD Unless otherwise exempted, the review agent shall comply with all other sections of this chapter. ADD}

{ADD 23-17.12-9. Decisions and internal appeals. -- The decision and appeals process of the review agent shall conform to the following:

(a) Notification of a prospective determination by the review agent shall be mailed or otherwise communicated to the provider of record and to the patient or other appropriate individual within one (1) business day of the receipt of all information necessary to complete the review.

(b) Notification of a concurrent determination shall be mailed or otherwise communicated to the patient and to the provider of record within one (1) business day of receipt of all information necessary to complete the review or, provided that all information necessary to perform the review has been received, prior to the end of the current certified period.

(c) Any notice of a determination not to certify an admission, service, procedure or extension or stay shall be mailed or otherwise communicated, and shall include (i) the principal reasons for the determination and (ii) the procedures to initiate an appeal of the determination or the name and telephone number of the person to contact with regard to an appeal.

(d) The review agent shall maintain and make available a written description of the appeal procedure by which either the patient or the provider of record may seek review of determinations not to certify an admission, service, procedure or extension of stay. The process established by each review agent may include a reasonable period within which an appeal must be filed to be considered.

(e) The review agent shall notify in writing the patient and provider of record of its determination on the appeal as soon as practical, but in no case later than thirty (30) {ADD fifteen (15) or twenty-one (21) if verbal notice is given within fifteen (15) ADD} working days after receiving the required documentation on the appeal.

(f) The review agent shall also provide for an expedited appeals process for emergency or life threatening situations. Each review agent shall complete the adjudication of such expedited appeals within two (2) business days of the date the appeal is filed and all information necessary to complete the appeal is received by the review agent.

(g) All {ADD initial adverse ADD} determinations {ADD and all first level of appeals of determinations ADD} not to certify an admission, service, procedure or extension of stay that had been ordered by a physician{ADD , dentist or other practitioner, ADD} shall be made, documented and signed by a licensed {ADD practitioner with the same licensure status as the ordering practitioner or a licensed ADD} physician.

(h) In cases where an initial appeal to reverse an adverse determination is unsuccessful, the review agent shall assure that a {ADD licensed practitioner with the same licensure status as the ordering practitioner or a licensed ADD} physician in the same or a similar general specialty as typically manages the medical condition, procedure or treatment under discussion is reasonably available, to review the case as a second (2nd) level of appeal. No appeals physician or other reviewer may be compensated or paid a bonus or incentive based on upholding an adverse determination.

No physician or other reviewer who has been involved in prior reviews of the case under appeal {ADD or who has participated in the direct care of the patient ADD} may participate as the sole reviewer in reviewing a case under appeal{ADD ; provided, however, that when new information has been made available at the first level of appeal then the review may be conducted by the same reviewer who made the adverse determination. ADD}

(i) The review agent shall maintain records of written appeals and their resolution, and shall provide reports as requested by the department.

(j) The department may, in response to a written complaint , {ADD which is provided in written form to the review agent, ADD} review an appeal regarding any adverse determination, and may request information of the review agent, provider, or patient regarding the status, outcome, or rationale regarding a {ADD the ADD} decision.

(k) A review agent is only entitled to review information or data relevant to the utilization review process. A review agent may not disclose or publish individual medical records or any confidential medical information obtained in the performance of utilization review activities. A review agent shall be considered a third (3rd) party health insurer for the purposes of section 5-37.3-6(b)(6) of the general laws of this state and shall be required to maintain the security procedures mandated in section 5-37.3-4(c).

{ADD Notwithstanding any other provision of law, the review agent, the department and all other parties privy to information which is the subject of this chapter shall comply with all state and federal confidentiality laws, including but not limited to chapter 5-37.3 (confidentiality of health care information act) and specifically section 5-37.3-4(c) which requires limitation on the distribution of such information on a "need to know" basis and section 40.1-5-26. ADD}

SECTION 2. Section 23-17.12-11 of chapter 23-17.12 of the General Laws entitled "Health Care Services -- Utilization Review Act" is hereby repealed in its entirety.

23-17.12-11. Documentation of adverse determinations. -- The department shall require providers to include

SECTION 3. This act shall take effect upon passage.