KANSAS INSURANCE DEPARTMENT

Proposed Regulation KAR 40-4-41

K.A.R. 40-4-41. Utilization review organizations; application; definitions. (a) Except as provided in K.S.A. 40-22a06(b), and amendments thereto, each organization offering utilization review services that is required to apply for a certificate pursuant to K.S.A. 40-22a01, et seq., and amendments thereto, shall comply with these regulations. The utilization review services subject to these regulations shall include the following:

(1) Prospective, concurrent, and retrospective utilization review for inpatient and outpatient care rendered conducted by a health care provider; and

(2) utilization review activity conducted by a health care provider in connection with health benefit plans.

(b) Notwithstanding adherence to the standards prescribed by these regulations, the decision as to what treatment to prescribe for an individual patient shall remain that of the health care provider, and either the patient or the patient's representative. The final decision as to whether the prescribed treatment constitutes a covered benefit shall be the responsibility of the claims administrator or health benefit plan.

(c) As used in these regulations, these terms shall have the following meanings:

(1) “Adverse event” means an occurrence that is inconsistent with or contrary to the expected outcomes of the organization’s utilization review services.

(2) “Advisory board of osteopathic specialists (ABOS)” means the American osteopathic association (AOA) certification agent organized in 1939 for the purpose of establishing and maintaining standards of osteopathic specialization and the pattern of training.

(2) (3) “American board of medical specialties (ABMS)” means the entity that was organized originally in 1933 as the advisory board of medical specialties, collaborated in 1970 with the American medical association (AMA), and is the recognized certifying agent for establishing and maintaining standards of medical specialization and the pattern of training.

(3) (4) “Appeal” means a formal request to reconsider a determination not to certify an admission, extension of stay, or other health care service.

(4) (5) “Appeals consideration” means a clinical review conducted by appropriate clinical peers who were not involved in peer clinical review, when a decision not to certify a requested admission, procedure, or service has been appealed. This term is sometimes referred to as “third-level review.”

(5) (6) “Attending health care provider” means the health care provider who is selected by, or assigned to the patient and who has primary responsibility for the treatment and care of the patient as provided by the applicable licensing, registration, or certification requirements of Kansas.

(6) (7) “Board-certified” means a label indicating that a physician has passed an examination given by a medical specialty board and has other eligibility requirements that certify the physician as a specialist in that area.

(8) “Case involving urgent care” means any request for a utilization management determination with respect to which the application of the deadlines specified in K.A.R. 40-4-41c(a)(4) for making nonurgent care determinations would result in either of the following:

(A) The possibility of seriously jeopardizing the life or health of the consumer or the ability of the consumer to regain maximum function; or

(B) in the opinion of a physician with knowledge of the consumer, the subjection of the consumer to severe pain that cannot be adequately managed without the care or treatment that is the subject of the case.

(7) (9) “Case management” means a collaborative process that assesses, plans, implements, coordinates, monitors, and evaluates options and services to meet an individual's health needs, using communication and available resources to promote quality, cost-effective outcomes.

(8) (10) “Certification” means a determination by a utilization review organization that an admission, extension of stay, or other health care service has been reviewed and, based on the information provided, meets the clinical requirements for medical necessity, appropriateness, level of care, or effectiveness under the auspices of the applicable health benefit plan.

(9) (11) “Claims administrator” means any entity that recommends or determines whether to pay claims to enrollees, health care providers, physicians, hospitals, or others on behalf of the health benefit plan. These payment determinations shall be made on the basis of contract provisions. Claims administrators may be insurance companies, self-insured employers, third-party administrators, or other private contractors.

(12) “Client” means a business or individual that purchases services from the organization.

(13) “Clinical decision support tools” means the protocols, guidelines, and algorithms that assist in the clinical decision-making process.

(10) (14) “Clinical director” means a health professional who meets the following criteria:

(A) Is duly licensed or certified;

(B) is an employee of, or party to a contract with, a utilization review an organization; and

(C) is responsible for clinical oversight of the utilization review management program, including the credentialing of professional staff and quality assessment and improvement functions.

(11) (15) “Clinical peer” means a physician or other health professional who holds an unrestricted license and is in the same or similar specialty as that which typically manages the medical condition, procedures, or treatment under review. As a peer in a similar specialty, the individual shall be in the same profession, which shall mean the same licensure category, as that of the ordering provider.

(12) (16) “Clinical rationale” means a statement providing additional clarification of the clinical basis for a noncertification determination. The clinical rationale shall relate the noncertification to the patient's condition or treatment plan and shall supply a sufficient basis for a decision to pursue an appeal.

(13) (17) “Clinical review criteria” means the written policies, screens, decision rules, medical protocols, or guidelines used by the utilization review organization as an element in the evaluation of medical necessity and appropriateness of requested admissions, procedures, and services under the auspices of the applicable health benefit plan.

(18) “Comparable data” means data about performance that is periodically compared to an historical baseline, which may be internal. This ongoing process is recorded in regular intervals, including monthly, quarterly, or annually. External benchmarks also may be used for purposes of comparison.

(19) “Complaint” means an expression of dissatisfaction regarding the organization’s products or services.

(14) (20) “Concurrent review” means a utilization review conducted during a patient's inpatient hospital stay or course of treatment, including outpatient procedures and services, and is sometimes called a “continued stay review.”

(21) “Consumer” means an individual who is the direct or indirect recipient of the services of the organization. Depending on the context, a consumer may be identified by different names, including “member,” “enrollee,” “beneficiary,” “patient,” “injured worker,” and “claimant.” A consumer relationship can exist even if there is not a direct relationship between the consumer and the organization.

(22) “Contractor” means a business entity that performs delegated functions on behalf of the organization.

(23) “Delegation” means the process by which the organization permits another entity to perform functions and assume responsibilities covered under these standards on behalf of the organization, while the organization retains final authority to provide oversight to the delegate.

(15) (24) “Discharge planning” means the process that assesses a patient's needs in order to help arrange for the necessary services and resources to effect an appropriate and timely discharge or a transfer from the current services or level of care.

(16) “Enrollee” means an individual who participates in, and is covered by a health plan.

(17) (25) “Expedited appeal” means a request by telephone for an additional review of a determination not to certify imminent or ongoing services that requires a review conducted by a clinical peer who was not involved in the original determination not to certify an appeal of a noncertification in a case involving urgent care.

(18) (26) “Facility rendering service” means the institution or organization in which the requested admission, procedure, or service is provided. These facilities may include the following:

(A) Hospitals and outpatient surgical facilities;

(B) individual practitioner offices;

(C) rehabilitation centers;

(D) residential treatment centers;

(E) skilled nursing facilities;

(F) laboratories; and

(G) imaging centers.

(19) (27) “Health benefit plan” means any public or private organization's written plan that insures or pays for specific health care expenses on behalf of enrollees or covered persons.

(A) “Health benefit plan” shall include the following:

(i) Any individual, group, or blanket policy of accident and sickness, medical, or surgical expense coverage; and

(ii) any provision of a policy, contract, plan, or agreement for medical service, including any contract of a health maintenance organization, nonprofit medical and hospital service corporation, or municipal group-funded sickness and accident pool.

(B) “Health benefit plan” shall not include any of the following:

(i) A policy or certificate covering only credit;

(ii) a policy or certificate covering only disability income;

(iii) coverage issued as a supplement to liability insurance;

(iv) insurance arising out of a workers compensation or similar law;

(v) automobile medical payment insurance;

(vi) insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy;

(vii) medicare; or

(viii) medicaid.

(20) (28) “Health care provider” shall have the meaning ascribed by K.S.A. 40-22a03(d) and amendments thereto, and shall include institutional providers and professional providers.

(21) (29) “Health professional” means an individual who meets the following criteria:

(A) Has undergone formal training in a health care field; and

(B) holds an associate or higher degree in a health care field or holds a state license or state certificate in a health care field; and

(C) has professional experience in providing direct patient care.

(22) (30) “Initial clinical review” means the clinical review conducted by appropriate licensed or certified health professionals. Initial clinical review staff may approve requests for admissions, procedures, and services that meet clinical review criteria, but shall refer requests that do not meet clinical review criteria to peer clinical review for certification or noncertification. The term is sometimes referred to as “first-level review.”

(23) “Inpatient care” means admissions to and services provided in all licensed medical care facilities and other licensed inpatient facilities, including skilled nursing facilities, residential treatment centers, and freestanding rehabilitation facilities.

(24) (31) “License” means a license or permit, or its equivalent, to practice medicine or a health profession that is issued by any state or jurisdiction of the United States and is required for the performance of job functions.

(25) (32) “Medical director” means a doctor of medicine or doctor of osteopathic medicine who meets the following criteria:

(A) Is duly licensed to practice medicine;

(B) is an employee of, or a party to a contract with, a utilization review organization; and

(C) has responsibility for clinical oversight of the utilization review organization's utilization review, credentialing, quality management, and other clinical functions.

(33) “Noncertification” means a determination by an organization that an admission, extension of stay, or other health care service has been reviewed and, based on the information provided, does not meet the clinical requirements for medical necessity, appropriateness, level of care, or effectiveness under the terms of the applicable health benefit plan.

(26) (34) “Nonclinical administrative staff” means staff who do not meet the definition of “health professional.”

(27) (35) “Ordering provider” means the specific physician or other provider who prescribed the health care service being reviewed.

(28) “Outpatient care” means health care provider diagnostic and therapeutic services provided at any medical care facility, and other outpatient locations, including laboratories, radiology facilities, provider offices, and patient homes.

(36) “Organization” means a business entity that seeks accreditation under these utilization review regulations. This term shall include utilization review organizations. This term may include a program or department within a larger organization and may be geographically limited.

(29) (37) “Patient” means the enrollee, or covered person, or consumer who files a claim for benefits or for whom a claim for benefits requests certification or for whom a request for certification has been filed. The term “patient” may include an agent or representative authorized to act on the patient’s behalf.

(30) (38) “Peer clinical review” means a clinical review conducted by appropriate health professionals when a request for an admission, procedure, or service was not approved during the initial clinical review. This term is sometimes referred to as “second-level review.”

(31) “Peer clinical reviewer” means a health care provider who holds a nonrestricted license in a state of the United States and who is in the same or similar profession as that which typically manages the health condition, procedure, or treatment under review.

(39) “Peer-to-peer conversation” means a request by telephone for additional review of a utilization management determination not to certify that is performed by the peer reviewer who reviewed the original decision, based on the submission of additional information or a peer-to-peer decision.

(40) “Prereview screening” means automated or semiautomated screening of requests for authorization.

(A) Prereview screening may include the following:

(i) Collecting structured clinical data, including the diagnosis, diagnosis codes, procedures, and procedure codes;

(ii) asking scripted clinical questions;

(iii) accepting responses to scripted clinical questions; and

(iv) taking specific action, which may include certification and assignment of length of stay explicitly linked to each of the possible responses.

(B) Prereview screening shall not include the following:

(i) Applying clinical judgment or interpretation;

(ii) accepting unstructured clinical data;

(iii) deviating from a script;

(iv) engaging in unscripted clinical dialogue;

(v) asking clinical follow-up questions; and

(vi) issuing noncertifications.

(32) (41) “Principal reason” or “principal reasons” means a clinical or nonclinical statement describing the reason or reasons for the noncertification determination. “Lack of medical necessity” shall not be deemed sufficient to meet this definition.

(42) “Professional competency” means the ability to perform assigned professional responsibilities.

(33) (43) “Prospective review” means any the utilization review management conducted before a patient's admission, stay, or other service or course of treatment and is sometimes called “precertification review.” or “prior authorization.”

(34) “Provider” means a licensed health care facility, program, agency, or health professional that delivers health care services.

(44) “Quality improvement project” means an organization-wide initiative to measure and improve the service or care provided by the organization.

(35) (45) “Quality management program” means a structured program that, at a minimum, monitors and evaluates the quality and effectiveness of a utilization management organization's policies, progress, and practices and provides management intervention, as needed, to support compliance with these standards systematic, data-driven effort to measure and improve consumer and client services or health care services.

(36) “Reconsideration” means a request by telephone or written notification for additional review of a utilization review determination not to certify, which shall be performed by the peer reviewer who reviewed the original decision, based on submission of additional information or a peer-to-peer discussion.

(37) (46) “Retrospective review” means a review of conducted after services provided after the discharge of the patient, including outpatient procedures and services, have been provided.

(38) “Scripted clinical screening” is a process using scripted criteria by which trained personnel can perform a preliminary or continued standardized review or evaluation of medical care being provided or to be provided. If the scripted criteria are met, the medical services are authorized. If the scripted criteria are not met, the case is referred to a health professional for further review.

(39) (47) “Review of service request” means the review of information submitted to the utilization review organization for health care services that neither require medical necessity certification nor result in a noncertification decision.

(40) (48) “Second opinion” means the requirement of some health plans to obtain an opinion about the medical necessity and appropriateness of specified proposed services by a practitioner other than the one originally making the recommendation.

(49) “Staff” means the organization’s employees, including full-time employees, part-time employees, and consultants.

(41) (50) “Standard appeal” means a request to review a determination not to recertify an admission, extension of stay, or other health care service, which shall be conducted by a peer clinical reviewer who was not involved in any previous noncertification pertaining to the same episode of care an appeal of a noncertification that is not an expedited appeal. In most cases, a standard appeal shall not pertain to cases involving urgent care. However, a standard appeal may also include a secondary appeal of an expedited appeal.

(51) “Statistically valid information” means information based on statistical principles and techniques.

(42) (52) “Structured clinical data” means clinical information that is precise and permits exact matching against explicit medical terms, diagnoses, or procedure codes, or other explicit medical terms, diagnoses, or procedure codes, or other explicit choices, without the need for interpretation.

(43) (53) “Utilization management (UM)” shall have the same meaning as that ascribed to “utilization review (UR),” which is defined in K.S.A. 40-22a03(b) and amendments thereto.

(44) (54) “Utilization review (UR)” shall have the meaning ascribed by K.S.A. 40-22a03(b) and amendments thereto.

(45) (55) “Utilization review organization” shall have the meaning ascribed by K.S.A. 40-22a03(c) and amendments thereto.

(46) “Variance” means a deviation from a specific standard that can be supported by a federal or state law or regulation or by a contractual agreement and that the commissioner of insurance determines as sufficient to reflect the intent of K.S.A. 40-2201 et seq., and amendments thereto, these regulations, and the rights of the parties involved.

(47) (56) “Written notification” means correspondence transmitted by mail, facsimile, or electronic medium a document, including an electronic document, that specifies the terms of a relationship between the organization and client, consumer, or contractor. This term may include a contract and any attachments or addenda. (Authorized by K.S.A. 40-103, 40-22a04, and 40-22a11; implementing K.S.A. 40-22a04 and 40-22a11; effective, T-40-4-26-95, April 26, 1995; effective June 12, 1995; amended June 22, 2001; amended P-____________.)