Texas June The following elements are particularly important in shaping our plans to support this new legislation:

Transcription

1 Texas June 2005 On June 1, 2005, Texas Governor Rick Perry signed House Bill 7 (HB 7) into law. First Health believes this new legislation is a major step in controlling Workers Compensation expenses. We are looking forward to the cost containment strategies that can now be implemented as a result of this legislation. HB 7 abolishes the Texas Workers Compensation Commission (TWCC) and establishes a new Division of Workers Compensation under the Texas Department of Insurance. The reform will be effective September 1,2005 with the expectation that rules will be promulgated by December 1, The most significant component of these reforms, from a network perspective, is a requirement for certification and the ability to direct injured workers into the certified network. Participation in a certified network is voluntary at the employer level. If the employer elects to provide coverage through a certified network, injured workers are required to receive treatment from network providers even if their injury occurred prior to the effective date of the new law. The Division will begin to accept network applications by January 1, 2006 and it is First Health s intent to file as a Health Care Network (HCN) in Texas by this date. In fact, in anticipation of this new legislation, we have already begun the planning process. In order to provide you with the most optimal network, we are performing an analysis of the current network that includes evaluating quality indicators, recredentialing, completing a data remediation project and evaluating the network composition. The network composition will be evaluated based on provider type, provider outcomes, and geographic location. Additional detail regarding the network will be provided in the coming weeks. The following elements are particularly important in shaping our plans to support this new legislation: Network Configuration Under the new legislation, carriers and employers will need to implement a certified Health Care Network (HCN) in order to continue realizing PPO discounts. First Health is confident our network configuration will be certified and available for you and your clients. We are prepared and looking forward to partnering with you in implementing the certified HCN. The certified HCN is charged with supporting a new pilot program for Return-to-Work. The legislation redefines the roles between the adjuster and the certified case manager whereby treatment is reviewed solely by clinical staff. First Health s experienced staff of certified case managers, located in Texas, are familiar with the Texas managed care climate and are ready to support your needs. Utilization Review must be performed by certified UR entities. We believe this will be a key area of interest and our qualified, experienced clinical staff is prepared to support your business at the level that meets your needs. First Health can provide a fully bundled approach or play a more collaborative, supportive role. In addition, our Workers Compensation Senior Medical Director is licensed in Texas and board certified in Occupational Medicine. He is responsible for the entire clinical program and oversees on-staff professionals with Texas licenses, including physicians and chiropractors that perform Peer Review and certified Case Managers. Texas reform reinforces the necessity for evidenced-based clinical protocols. First Health uses "Official Disability Guidelines" (ODG/TWC) as our primary source for both disability and treatment protocols in workers compensation. Secondary sources through American College of Occupational & Environmental Medicine (ACOEM) or Pressley Reed Medical Disability Advisor (MDA) are also used when necessary. Where treatment is not addressed under any of the above sources, First Health receives support from its department for "New Medical Technology Evaluation" headed by a board certified medical officer. This department assesses evidenced-based, pertinent and appropriate medical literature to assist in the review process. The ability to transition or direct all cases into the HCN will substantially increase network penetration and savings. In addition, our flexible channeling tools can be tailored to meet your needs. There are significant rules in the legislation, which can be managed through bill review. The First Health Bill Review system is capable of handling these rules in an automated approach, allowing our clients to realize savings immediately. The highlights are:

2 q A 95-day limit for submitting bills for reimbursement. q Auditing and partial prepayment rules q A closed formulary for prescription medications q Limited liability for non-network access if not authorized. The following pages provide more details that either relate to or directly impact services provided by First Health. Please note, this document does not address every provision included in HB 7 only those issues that relate to or directly impact the services provided by First Health have been summarized. A more detailed summary is also available upon request. First Health is eager to work with you in another managed care reform state. As our program becomes more defined, we will keep you informed. We look forward to hearing from you regarding your interest in this new network certification. Key Dates: September 1, 2005 HB 7 goes into effect. December 1, 2005 Date by which the Commissioner of Insurance must adopt rules to implement workers compensation networks. January 1, 2006 Date on which the Texas Department of Insurance will begin accepting applications from networks seeking certification. Date of Network Certification An insurance carrier may begin offering workers compensation medical benefits through a network upon certification of the network by the Commissioner of Insurance. Workers Compensation Health Care Network Network or workers compensation health care network means an organization that is formed, certified and established by, or operates under contract with, an insurance carrier. A network is not an insurer and may not use in the network s name or informational literature the word insurance, casualty, surety, or mutual. Participation in a certified network is voluntary at the employer level. Employers may elect to provide workers compensation coverage to its employees through a certified network. If the employer contracts with a carrier that has a certified network, the employer s employees must participate and receive care for workplace injuries through that network. A workers compensation network may not operate in Texas unless it holds a certificate approved by the Department of Insurance. Entities may not take PPO discounts unless the network is certified. A certificate application must be filed with the Texas Department Of Insurance (DOI), verified by the applicant or an officer and accompanied by a nonrefundable fee. Application Requirements Applications will be accepted as of January 1, Each application must include the following: q A description or a copy of the applicant s basic organizational structure q Biographical information q A sample copy of all contracts between the carrier, TPA, managed care entity and provider q A financial statement that is prepared using generally accepted accounting practices q A statement acknowledging the validity of Chapter 804 (Service of Process) for a domestic company q A description and map of the applicant s service area or areas, with key and scale, that identifies each county or part of a county to be served q A description of programs and procedures to be utilized for complaints, QI, UR and retrospective UR programs q A list of all contracted network providers to demonstrate network adequacy; and q Any other information that the Commissioner requires by rule. The Commissioner of Workers Compensation, via the DOI, is required to approve or disapprove a complete application within 60 days. The Department of Insurance will notify the applicant of any deficiencies in the application, in which case the 60-day period is tolled. The Commissioner will specify what components of the application do not comply with applicable statutes and rules. An applicant whose application is disapproved may request a hearing within 30 days of the disapproval order. Renewals HB 7 does not require renewal or re-certification of networks. Once a certificate has been issued, it is valid until suspended or revoked. Network Organization CEO and Medical Director The network must have a chief executive officer, operations officer, or governing body responsible for the development, approval, implementa- Page Number 2

3 tion and enforcement of policies, procedures and documents necessary for the operation of the network. In addition, the network must have an occupational medicine specialist licensed to practice medicine in the United States. Injured Employees Are Required to Treat Within the Network The insurer must notify the injured employee in writing of the network requirements. If an employer contracts with a carrier for a network, employees who live within the network s service area are required to obtain treatment within the network. An injured employee whose injury occurred prior to September 1, 2005, must receive treatment within the network. Out -of-network Care A carrier that contracts with a network is liable for non-network care involving: q Emergency care; q Care outside the service area; q Non-network care that has been referred and approved by the network; or q Non-network care where the employee has not received appropriate notice of network requirements. Provider Reimbursement The amount of network reimbursement is determined by the contract between the network and the provider. For preauthorized services, the insurance carrier or network may not deny payment to a provider except for reasons other than medical necessity. Out-of-network providers are to be reimbursed at the fee schedule. Carrier Must Notify Provider of Contested Compensability A carrier must notify a provider in writing if the carrier contests compensability. If the carrier contests compensability, the carrier is liable up to a maximum of $7,000 for health care services provided before issuance of the required notification. Payment may not be denied on the grounds that the injury was not compensable before providing the required notification. Payment for medically necessary services provided prior to written notification of a compensability denial is not subject to denial, recoupment, or refund from a network provider based on compensability. Silent Network Provisions An insurance carrier or TPA may not reimburse a doctor or other health care provider, an institutional provider, or an organization of doctors and providers on a discounted fee basis for services that are provided to an injured employee unless the carrier or TPA has contracted with either the doctor or a network and the doctor agreed to the contract and has agreed to provide health care services under the terms of the contract. Service Areas The network must establish one or more service areas and demonstrate continuity, accessibility, availability and quality of services. Documentation must specify the counties and zip code service area. In addition, documentation must include a complete provider directory. Network Availability Requirements Providers (including general, special, and psychiatric hospitals) and emergency care must be available and accessible 24 hours a day, seven days a week. In addition, physical and occupational therapy services and chiropractic services must be available and accessible within the network s service area. Except for emergencies, a network must arrange for services, including referrals to specialists, to be accessible by the last day of the third week after the date of request. Network Accessibility Requirements Doctors and specialists must have admitting privileges at one or more network hospitals. Treating doctors or general hospitals must be accessible within 30 miles in non-rural areas and 60 miles in rural areas. The distance from any point in the network s service area to a point of service by a specialist or specialty hospital is not greater than 75 miles. Selection of Network Treating Doctor The network determines the specialty or specialties of doctors who may serve as treating doctors and who are primarily responsible for the employee s health care for an injury. For each injury, an injured employee is entitled to choose the initial treating doctor from the network list within the service area where the employee lives. The following do not constitute an initial choice of treating doctor: q A doctor salaried by the employer; q A doctor providing emergency care; or q Any doctor who provides care before the employee is enrolled in the network, Page Number 3

4 An employee with an existing injury that occurred before the carrier established a network must select a network doctor within 14 days after notice or, the network may assign the employee a network doctor. Change of Network Treating Doctor An employee who is dissatisfied with the initial choice of doctor may select an alternate from the network s list by notifying the network. The network may not deny a selection of an alternate treating doctor. If the employee remains dissatisfied, he/she may request a subsequent change of provider within the network. Subsequent requests must meet certain criteria and require approval from the network. Denials for a subsequent doctor are subject to the appeal process for a complaint filed with the network. Specialist as Treating Doctor An injured employee with a chronic, life-threatening injury or chronic pain related to a compensable injury may apply to the network s medical director to use a non-primary care physician specialist that is in the network as the injured employee s treating doctor. The request submitted to the network must include specific information regarding the medical need for a non-primary care physician specialist and be signed by the injured employee and physician. To be eligible to be the treating doctor, a specialist must agree to accept the responsibility to coordinate all of the injured employee s health care needs. If the network denies the request, the injured employee may appeal the decision through the network. Duties of Network Treating Doctor / Out-of-Network Referrals A network doctor must provide care and participate in the medical case management process and return-to-work planning. Network doctors must make referrals to other network providers or request referrals to out-ofnetwork providers if services are not available within the network. Referrals to out-of-network provider require approval from the network within 7 days of the request or sooner if the condition warrants an expedited scenario. If the network denies the referral request, the employee may appeal the decision through the network s complaint process. Approved Doctor List The approved doctor list remains in existence at least until September 1, 2007 and applies to the same doctors/providers and the same functions as it has in the past. However, a doctor who contracts with a certified network is not subject to the registration requirements for the purpose of providing health care services under the network contract. Peer Review Requires Texas License The Commissioner will adopt rules for peer review. A doctor who performs peer review must hold the appropriate professional license issued by the State of Texas. Network Quality of Care Requirements A network must develop and maintain an ongoing quality improvement program designed to objectively and systematically monitor and evaluate the quality and appropriateness of care and services and to pursue opportunities for improvement. Case Management The network must have a medical case management program with certified case managers that work with doctors, manage referrals and facilitate cost-effective care and return-to-work. A claims adjuster may not be used as a case manager. Network Treatment Guidelines and Protocols Each network must adopt treatment guidelines, return-to-work guidelines, and individual treatment protocols which are evidence-based, scientifically valid, and outcome-focused to reduce inappropriate or unnecessary health care while safeguarding necessary care. Treatment may not be denied solely on the basis that the treatment for the compensable injury in question is not specifically addressed by the treatment guidelines adopted by the insurance carrier or network. Any screening criteria used for utilization review or retrospective review related to a workers compensation health care network must be consistent with the network s treatment guidelines Utilization Review / Retrospective Review of Network Health Care Services Utilization review means a system for prospective or concurrent review of the medical necessity and appropriateness of health care services being provided or proposed to be provided to an individual within this state. Retrospective review means the process of reviewing the medical necessity and reasonableness of health care that has been provided to an injured employee. The requirements under Article 21.58A of the Texas Insurance Code apply to utilization review conducted in relation to a health care network. The statutory and regulatory requirements for preauthorization do not apply to care provided through a certified network. A network or an insurance Page Number 4

5 carrier may not require preauthorization of treatments and services for a medical emergency. Retrospective review of a health care service must be based on written screening criteria established and periodically updated with appropriate involvement from doctors, including actively practicing doctors, and other health care providers. Retrospective review must be performed under the direction of a physician. Timeframes For services other than concurrent hospitalization care, post-stabilization treatment or services involving a life-threatening condition, the determination must be transmitted no later than the third calendar day after the request is received. For proposed, concurrent hospitalization care, determinations must be transmitted within 24 hours of receipt of the request. For proposed services that involve post-stabilization treatment or a life threatening condition, recommendations must be transmitted one hour from receipt of the request. Copies of review determinations must be sent to the employee, the employee s representative, and the requesting provider. Reconsiderations Standard Reconsideration: The UR agent must maintain written procedures for adverse determinations. Written notifications will be provided as soon as practicable, but not later than the 30th day after the date the utilization review agent received the request. Expedited Reconsideration: In addition to the written request, reconsideration procedures must include an expedited method for denials involving post-stabilization treatment or life-threatening conditions, and for denials of continued stays for hospitalizations. An employee with a life-threatening condition is entitled to an immediate review by an independent review organization and is not required to comply with the procedures for reconsideration of an adverse determination. Independent Review The requestor must file a request for independent review with the Department of Insurance no later than the 45th day after the denial of reconsideration. The insurance carrier is responsible for the cost of the independent review and must provide medical records and documents relevant to the review within three business days of the request. Complaint Resolution Each network must maintain a complaint system to resolve oral or written complaints if filed within 90 days of the occurrence. The network will acknowledge the complaint within seven days of receipt of the request and resolve the complaint within 30 days. Complaint Notices The provider is required to post a notice to injured employees on the process for resolving complaints with the network. The notice must include the Department s toll-free telephone number for filing a complaint. Requirement for Notice to Employees Employees must be notified of the network requirements within three days of hire and at the time of injury. Carriers must obtain a signed acknowledgment confirming the employee has received the notice. In addition, employers must post notice of the network requirements at each place of employment. An insurance carrier is liable for the payment of medical care for an injured employee who does not receive notice until the employee receives notice of network requirements. Management Contracts Management contracts require approval from the Department of Insurance. Approval will occur within 30 days. The Management Contract must have a fidelity bond for officers and employees in the amount of $250,000 or greater as prescribed by the Commissioner. The fidelity bond must be issued by an insurer authorized to engage in business in Texas and must be filed with the Department of Insurance. Evaluation of Networks / Consumer Report Cards The Workers Compensation Research and Evaluation Group established within the Texas Department of Insurance will objectively evaluate the impact of certified networks on the cost and quality of medical care provided to injured employees. The Group must report its findings by December 1, of each even-numbered year. The first report is due December 1, The Group will also issue an annual report card that compares certified networks for network and non-network activity. Examination of Networks by Department of Insurance A designated representative may review the operations of a certified network to determine compliance. The review may include on-site visits to the network s premises. During on-site visits, the network must make available to the Department of Insurance all records relating to the network s operations. Page Number 5

6 Preauthorization Requirements for Care Outside of a Certified Network The existing preauthorization, concurrent review, and retrospective review requirements continue to apply to care not provided through a certified network. HB 7 adds physical and occupational therapy to the list of services requiring preauthorization and concurrent review and makes clear that treatments and services that have been preauthorized are not subject to retrospective review of the medical necessity of the treatment or service. Non-Network Treatment Guidelines and Protocols Separate from the requirement for networks to adopt treatment guidelines and protocols, HB 7 contains a general requirement for the Commissioner to adopt treatment guidelines and return-to-work guidelines that are evidence-based, scientifically valid, outcome-focused, and designed to reduce excessive or inappropriate medical case while safeguarding necessary medical care. These guidelines would apply to care provided outside of the certified network. Treatment may not be denied solely on the basis that the treatment is not addressed by the treatment guidelines. The Commissioner may adopt disability management standards designed to promote care at the earliest opportunity to maximize injury healing and improve stay-at-work and return-to-work outcomes through appropriate management of work-related injuries or conditions. Prompt Submission and Payment of Medical Bills These requirements apply regardless of network participation. Providers must submit a claim for payment no later than the 95th day after services are rendered. Failure to timely submit a claim constitutes forfeiture of the provider s right to reimbursement. The carrier must pay, reduce, deny or determine to audit the provider s claim no later than the 45th day after the date of receipt of the provider s claim. The carrier may request additional documentation necessary to clarify the provider s charges at any time during the 45-day period. The provider must supply information to the carrier within 15 days of the carrier s request. If the carrier audits a claim, the audit must be conducted within160 days of receipt of the claim. The carrier must make a determination regarding compensability and the medical necessity of the services provided. If the carrier audits the claim, the carrier must pay to the provider 85 percent of the claim amount established by the fee schedule or contracted rate within 45 days of receipt of the claim. If the services are appropriate, the carrier must pay the remaining 15 percent by the 160 th day. If the carrier contests the compensability of an injury and the injury is determined not to be compensable, the carrier may recover the amounts paid for services from the employee s health benefit plan, or any other person who may be obligated for the cost of the services. Electronic Billing / Payment Requirements The Commissioner will adopt rules by January 1, 2006 regarding the electronic submission and processing of medical bills by providers to insurance carriers. Carriers are required to accept medical bills submitted electronically. The Commissioner will establish criteria for granting exceptions for those unable to submit or accept medical bills electronically. On or after January 1, 2008, the Commissioner may adopt rules regarding the electronic payment of medical bills by insurance carriers to health care providers. Pharmaceutical Services Prescription medication may not be delivered through a certified network. The Commissioner will adopt a closed formulary and establish a fee schedule for pharmacy and pharmaceutical services. Carriers must reimburse for pharmacy benefits and services using the fee schedule or at rates negotiated by contract. Single Point of Contact for Notice of Injury Each insurance carrier must establish a single point of contact in the carrier s office for an injured employee for whom the carrier receives a notice of injury First Health Group Corp. All rights reserved. Reproduction without permission is prohibited. First Health and the heart logo are registered service marks of First Health Group Corp. The information which is provided herein and links to other related websites are offered as a courtesy to our clients. All material is intended for information, communication and educational purposes only and is in no manner an endorsement, recommendation or approval of any information. First Health accepts no liability for the content of this distribution, or for the consequences of any actions taken on the basis of the information provided. Page Number 6