A Bill to:

THE PEOPLE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The Legislature finds and declares as follows:

(a) Utilization Review is an essential element of Managed Health Care Plans, as well as many health and disability insurance plans.

(b) Many plan members and insureds are financially unable to obtain medical care without the aid of their plan or insurer.

(c) Unlike retroactive utilization review, which may result in non-payment for medical services already rendered, prospective and concurrent utilization review denials of payment may result in the inability of the patient to obtain physician-recommended and possibly needed medical care.

(d) Such denial of payment and resulting denial of care may result in irreparable injury to patients.

(e) The prospective or concurrent utilization review is usually done by the same entity, or its employee or agent, which will benefit financially from the denial of care, resulting in a potential conflict of interest.

(f) These rules are required to assure that financial conflicts of interest of utilization reviewers and their employers or principals do not intrude into medical decision making to the detriment of patients.

SECTION 2. [practice of medicine includes UR]

Business & Professions Code Section 2052.1 is added to read:

Sec. 2052.1

(a) Prospective or concurrent utilization review of the decisions of treating physicians, which may affect the medical care of patients, is and will be considered the practice of medicine.

(b) Persons engaged in such utilization review who modify orders of treating physicians must be licensed in the State of California, and have professional credentials in the relevant specialty at least as advanced as those of the treating physician whose orders they modify.

(c) Medical decisions of such utilization reviewers are subject to review and discipline by the appropriate licensing board. Mere application of undisputed facts to unambiguous contractual provisions is not a medical decision, but a coverage decision.

(d) Medical decisions of such utilization reviewers may be the basis for civil medical malpractice suits to the same extent as decisions of any other licensed practitioner.

SECTION 3. [practice of medicine includes UR]

Health and Safety Code subsection 1367.01(e) is renumbered 1367.01(e)(1)

Health and Safety Code subsection 1367.01(e)(2) is added to read:

(e)(2) The decisions of a licensed physician or a licensed health care professional to prospectively or concurrently deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity, constitute the practice of medicine, and are subject to review and discipline by the appropriate licensing board and may be the basis for civil medical malpractice suits.

SECTION 4. [practice of medicine includes UR]

Insurance Code subsection 10123.135(e) is renumbered 10123.135(e) (1)

Insurance Code subsection 10123.135(e)(2) is added to read:

(e)(2) The decisions of a licensed physician or a licensed health care professional to prospectively or concurrently deny or modify requests for authorization of health care services for an insured for reasons of medical necessity, constitute the practice of medicine, and are subject to review and discipline by the appropriate licensing board and may be the basis for civil medical malpractice suits.

SECTION 5. [protection of doctor who refuses to write UR's order]

Business & Professions Code Subsection 510(k) is added to read:

(k) The protections of this section shall apply to any treating medical practitioner who, having appealed an adverse utilization review decision, declines to personally write the orders to implement that decision, so long as the patient's medical condition is not jeopardized thereby.

SECTION 6. [no denial allowed if no HSC 1363.5 guidelines]

Health and Safety Code subsection 1367.01(b) is renumbered 1367.01(b)(1)

Health and Safety Code subsection 1367.01(b)(2) is added to read:

(b)(2) If the health care service plan or its utilization review entity modifies, delays or denies a request of a health care provider for services for an enrollee, and it is unable to disclose to the provider and enrollee the relevant guidelines required by subsection (1) above, then the modification, delay, or denial shall be void, and the request shall be approved.

SECTION 7. [no denial allowed if no IC 10123.135 guidelines]

Insurance Code subsection 10123.135(b) is renumbered 10123.135(b)(1)

Insurance Code subsection 10123.135(b)(2) is added to read:

(b)(2) If the disability insurer or its utilization review entity modifies, delays or denies a request of a health care provider for services for an insured, and it is unable to disclose to the provider and insured the relevant guidelines required by subsection (1) above, then the modification, delay, or denial shall be void, and the request shall be approved.