Administrative Rule Review Report  #AR10-028

Legislative Service Office

14-May-10

AGENCY: Insurance Department.

DATE SUBMITTED: May 6, 2010.

SUBJECT: Chapter 63, Medical Necessity Review Rights.

NATURE OF RULES:                        Legislative and procedural.

STATUTORY AUTHORITY: W.S. 26-40-201

DETERMINATION OF PROCEDURAL COMPLIANCE BASED UPON INFORMATION SUBMITTED BY THE AGENCY TO LSO:              Apparently complete to date.    Notice of the proposed adoption of new rules was provided by the LSO as required by W.S. 28‑9‑103(d).  No comments have been received to date.

SUMMARY OF RULES:        The rules provide uniform standards for giving notice to claimants of their right to an independent review of any denial of a disability claim as not medically necessary.   The notice of a right to review must be sent with any notice of denial of a claim based on the finding that the claim is not medically necessary.  The notice informs the claimant of the substantive requirements for filing a request for review and the timelines necessary for such a request.  The rules also provide guidelines for such a review by an independent review organization.

FINDINGS:  The rules appear to be within the statutory authority and legislative intent, although the rules are not completely clear on one issue:

W.S. 26-40-201(q) and (r) provides:

"(q)  The insurer against whom a request for external review is filed shall pay the costs of the independent review organization's external review.

(r)  The commissioner shall adopt such regulations as are necessary to promote the purposes of this section, which regulations shall include:

(i)  Fees, including the waiver of fees for indigent persons;".

The statute does not specify exactly what the fees may be collected for, but the department has explained that the fees are designed to recover the processing costs for the department rather than the costs of the independent review organization's external review (which are required to be paid by the insurer).  Sections 6(a) and 9(b) of the rules require the claimant to remit a $15.00 fee when filing notice of the claimant's request for standard or expedited review.   However, these sections of the rules do not specify that a waiver of the fees is available for indigent persons.

It is notable that in Section 5(b)(ii)(D)(I) of the rules, the notice required to be sent to the claimant by the insurer does state that the fee will be waived for claimants whose income is at or below the federal poverty level guidelines.  This section appears to be applicable to Sections 6(a) and 9(b) and the department has assured LSO that they interpret the rules as such.  The department will waive the fee for persons requesting a waiver who fall at or below 100% of the federal poverty level. The department also noted that they will be amending the rules substantially in the very near future to comply with the federal Patient Protection and Affordable Care Act of 2010.  Those amendments will include a properly placed fee waiver provision which will reflect that statute's requirements concerning federal poverty level guidelines.

STAFF RECOMMENDATION:    That the rules be placed on the Consent List and be approved by the Council as submitted by the Agency.

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Lynda Cook

Staff Attorney

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David K. Gruver

Assistant Director

LGC/