HB 1338 - Patient Protection Act; enact
Georgia House of Representatives - 1995/1996 Sessions
HB 1338 - Patient Protection Act; enact
Page Numbers - 1/ 2/ 3/ 4/ 5/ 6/ 7/ 8/ 9/ 10/ 11/ 12
1. Williams 114th 2. Ehrhart 36th 3. Heard 89th
House Comm: Ins / Senate Comm: I&L /
House Vote: Yeas 164 Nays 1 Senate Vote: Yeas 52 Nays 0
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House Action Senate
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1/22/96 Read 1st Time 2/19/96
1/23/96 Read 2nd Time 3/8/96
2/6/96 Favorably Reported 3/7/96
Sub Committee Amend/Sub Sub
2/15/96 Read 3rd Time 3/12/96
2/15/96 Passed/Adopted 3/12/96
CS Comm/Floor Amend/Sub CSFA
3/12/96 Amend/Sub Agreed To
3/28/96 Sent to Governor
4/2/96 Signed by Governor
751 Act/Veto Number
7/1/96 Effective Date
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Immediately Transmitted to the House
Code Sections amended: 33-20A-1, 33-20A-2, 33-20A-3, 33-20A-4, 33-20A-5,
33-20A-6, 33-20A-7, 33-20A-8, 33-20A-9, 33-20A-10, 33-21-1, 33-21-13, 33-21-18.1
HB 1338 HB 1338/AP
H. B. No. 1338 (AS PASSED HOUSE AND SENATE)
By: Representatives Williams of the 114th, Ehrhart of the
36th and Heard of the 89th
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Title 33 of the Official Code of Georgia Annotated,
1- 2 relating to insurance, so as to enact the "Patient
1- 3 Protection Act"; to state legislative findings; to define
1- 4 terms; to provide for certification and regulation of
1- 5 managed health care plans by the Commissioner of Insurance;
1- 6 to require certain disclosures to enrollees in such plans;
1- 7 to specify certain standards with respect to access to
1- 8 health care services by enrollees; to specify certain
1- 9 standards with respect to quality assurance programs of such
1-10 plans; to prohibit financial incentives which limit
1-11 medically necessary and appropriate care; to prohibit plans
1-12 from penalizing a physician or health care provider for
1-13 discussing medically necessary or appropriate health care;
1-14 to provide for certain conditions under which coverage must
1-15 be provided for certain benefits; to specify standards for
1-16 accuracy and confidentiality of patient records; to change
1-17 the provisions relating to definitions regarding health
1-18 maintenance organizations; to require certain disclosures to
1-19 enrollees in health maintenance organizations; to require
1-20 certain coverage in health benefit plans; to provide for
1-21 other related matters; to repeal conflicting laws; and for
1-22 other purposes.
1-23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
1-24 Title 33 of the Official Code of Georgia Annotated, relating
1-25 to insurance, is amended by adding after Chapter 20 a new
1-26 Chapter 20A to read as follows:
"CHAPTER 20A
1-27 33-20A-1. (Index)
1-28 This chapter shall be known and may be cited as the
1-29 'Patient Protection Act of 1996.'
H. B. No. 1338
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HB 1338/AP
2- 1 33-20A-2. (Index)
2- 2 (a) The General Assembly finds and declares that it is a
2- 3 vital government concern that the citizens of the State of
2- 4 Georgia have access to quality health care services and
2- 5 that informed consumers will be better able to identify
2- 6 and select plans that offer quality health care services
2- 7 if they are provided specific information before they
2- 8 enroll in health care plans. As the health care market
2- 9 becomes increasingly dominated by health care plans that
2-10 use managed care techniques that include decisions as to
2-11 the appropriateness of care, the General Assembly finds
2-12 and declares that it is a vital government function to
2-13 protect patients from managed care practices which have
2-14 the effect of denying or limiting appropriate care. The
2-15 General Assembly further finds that it is the public
2-16 policy of the State of Georgia that physicians and health
2-17 care providers be encouraged to advocate for medically
2-18 appropriate health care for their patients.
2-19 (b) To achieve these ends, the General Assembly declares
2-20 it necessary for the Commissioner of Insurance to certify
2-21 qualified managed care plans to conduct business in the
2-22 State of Georgia and for the Commissioner of Insurance to
2-23 establish standards for such certification.
2-24 33-20A-3. (Index)
2-25 As used in this chapter, the term:
2-26 (1) 'Commissioner' means the Commissioner of Insurance.
2-27 (2) 'Emergency services' or 'emergency care' means those
2-28 health care services that are provided for a condition
2-29 of recent onset and sufficient severity, including but
2-30 not limited to severe pain, that would lead a prudent
2-31 layperson, possessing an average knowledge of medicine
2-32 and health, to believe that his or her condition,
2-33 sickness, or injury is of such a nature that failure to
2-34 obtain immediate medical care could result in:
2-35 (A) Placing the patient's health in serious jeopardy;
2-36 (B) Serious impairment to bodily functions; or
2-37 (C) Serious dysfunction of any bodily organ or part.
2-38 (2.1) 'Enrollee' means an individual who has elected to
2-39 contract for or participate in a managed care plan for
2-40 that individual or for that individual and that
2-41 individual's eligible dependents.
H. B. No. 1338
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HB 1338/AP
3- 1 (3) 'Health care provider' or 'provider' means any
3- 2 physician, dentist, podiatrist, pharmacist, optometrist,
3- 3 psychologist, clinical social worker, advance practice
3- 4 nurse, registered optician, licensed professional
3- 5 counselor, physical therapist, marriage and family
3- 6 therapist, chiropractor, occupational therapist, speech
3- 7 language pathologist, audiologist, dietitian, or
3- 8 physician's assistant.
3- 9 (4) 'Limited utilization incentive plan' means any
3-10 compensation arrangement between the plan and a health
3-11 care provider or provider group that has the effect of
3-12 reducing or limiting services to patients.
3-13 (5) 'Managed care contractor' means a person who:
3-14 (A) Establishes, operates, or maintains a network of
3-15 participating providers;
3-16 (B) Conducts or arranges for utilization review
3-17 activities; and
3-18 (C) Contracts with an insurance company, a hospital or
3-19 medical service plan, an employer, an employee
3-20 organization, or any other entity providing coverage
3-21 for health care services to operate a managed care
3-22 plan.
3-23 (6) 'Managed care entity' includes an insurance company,
3-24 hospital or medical service plan, hospital, health care
3-25 provider network, physician hospital organization,
3-26 health care provider, health maintenance organization,
3-27 health care corporation, employer or employee
3-28 organization, or managed care contractor that offers a
3-29 managed care plan.
3-30 (7) 'Managed care plan' means a major medical,
3-31 hospitalization, or dental plan that provides for the
3-32 financing and delivery of health care services to
3-33 persons enrolled in such plan through:
3-34 (A) Arrangements with selected providers to furnish
3-35 health care services;
3-36 (B) Explicit standards for the selection of
3-37 participating providers; and
3-38 (C) Cost savings for persons enrolled in the plan to
3-39 use the participating providers and procedures
3-40 provided for by the plan;
H. B. No. 1338
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HB 1338/AP
4- 1 provided, however, that the term 'managed care plan'
4- 2 does not apply to Chapter 9 of Title 34, relating to
4- 3 workers' compensation.
4- 4 (8) 'Out of network' or 'point of service' refer to
4- 5 health care items or services provided to an enrollee by
4- 6 providers who do not belong to the provider network in
4- 7 the managed care plan.
4- 8 (8.1) 'Patient' means a person who seeks or receives
4- 9 health care services under a managed care plan.
4-10 (9) 'Qualified managed care plan' means a managed care
4-11 plan that the Commissioner certifies as meeting the
4-12 requirements of this chapter.
4-13 33-20A-4. (Index)
4-14 (a) In addition to other requirements of law, prior to
4-15 offering a managed care plan to any resident in Georgia, a
4-16 managed care entity must first obtain a certificate from
4-17 the Commissioner of Insurance indicating that such managed
4-18 care plan meets the requirements of this chapter. The
4-19 Commissioner may impose such costs, by rule or regulation,
4-20 on managed care entities as deemed necessary to carry out
4-21 the provisions of this chapter.
4-22 (b) The Commissioner shall establish procedures for the
4-23 periodic review and recertification of qualified managed
4-24 care plans.
4-25 (c) The Commissioner shall terminate the certification of
4-26 a qualified managed care plan, revoke or suspend the
4-27 license of a managed care entity, or in lieu thereof
4-28 impose a monetary penalty in accordance with Chapter 2 of
4-29 this title, if the Commissioner determines that such plan
4-30 no longer meets the applicable requirements for
4-31 certification or violates any provision of this chapter.
4-32 Before effecting any such sanction, the Commissioner shall
4-33 provide the plan with notice and opportunity for a hearing
4-34 on the proposed sanctions. Nothing in this Code section
4-35 shall be construed as precluding other remedies at law.
4-36 (d) The Commissioner shall establish a process for
4-37 certification through alternative methods providing that:
4-38 (1) An eligible organization, as defined in Section
4-39 1876(b) of the federal Social Security Act, shall be
4-40 deemed to meet the requirements of subsections (a) and
H. B. No. 1338
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HB 1338/AP
5- 1 (b) of this Code section for certification as a
5- 2 qualified managed care plan; or
5- 3 (2) If the Commissioner finds that a national
5- 4 accreditation body has established requirements for
5- 5 accreditation of a managed care entity which offers a
5- 6 managed care plan that are at least equivalent to the
5- 7 requirements established under this chapter and that the
5- 8 eligible organization and its plans comply with the
5- 9 requirements of such national accreditation body, then
5-10 such organization and its plans shall be deemed to meet
5-11 the requirements of subsections (a) and (b) of this Code
5-12 section.
5-13 33-20A-5. (Index)
5-14 The Commissioner shall establish standards for the
5-15 certification of qualified managed care plans that conduct
5-16 business in this state. Such standards must include the
5-17 following provisions:
5-18 (1) Disclosure to enrollees and prospective enrollees.
5-19 (A) A managed care entity shall disclose to enrollees
5-20 and prospective enrollees who inquire as individuals
5-21 into a plan or plans offered by the managed care
5-22 entity the information required by this paragraph. In
5-23 the case of an employer negotiating for a health care
5-24 plan or plans on behalf of his or her employees,
5-25 sufficient copies of disclosure information shall be
5-26 made available to employees upon request. Disclosure
5-27 of information under this paragraph shall be readable,
5-28 understandable, and on a standardized form containing
5-29 information regarding all of the following for each
5-30 plan it offers:
5-31 (i) The health care services or other benefits under
5-32 the plan offered as well as limitations on services,
5-33 kinds of services, benefits, or kinds of benefits to
5-34 be provided;
5-35 (ii) Rules regarding copayments, prior
5-36 authorization, or review requirements including, but
5-37 not limited to, preauthorization review, concurrent
5-38 review, postservice review, or postpayment review
5-39 that could result in the patient's being denied
5-40 coverage or provision of a particular service;
5-41 (iii) Potential liability for cost-sharing for out
5-42 of network services, including but not limited to
H. B. No. 1338
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HB 1338/AP
6- 1 providers, drugs, and devices or surgical procedures
6- 2 that are not on a list or a formulary;
6- 3 (iv) The financial obligations of the enrollee,
6- 4 including premiums, deductibles, copayments, and
6- 5 maximum limits on out-of-pocket expenses for items
6- 6 and services (both in and out of network);
6- 7 (v) The number, mix, and distribution of
6- 8 participating providers. An enrollee or a
6- 9 prospective enrollee shall be entitled to a list of
6-10 individual participating providers upon request;
6-11 (vi) Enrollee rights and responsibilities, including
6-12 an explanation of the grievance process provided
6-13 under this chapter;
6-14 (vii) An explanation of what constitutes an
6-15 emergency situation and what constitutes emergency
6-16 services;
6-17 (viii) The existence of any limited utilization
6-18 incentive plans;
6-19 (ix) The existence of restrictive formularies or
6-20 prior approval requirements for prescription drugs.
6-21 An enrollee or a prospective enrollee shall be
6-22 entitled, upon request, to a description of specific
6-23 drug and therapeutic class restrictions;
6-24 (x) The existence of limitations on choices of
6-25 health care providers;
6-26 (xi) A statement as to where and in what manner
6-27 additional information is available; and
6-28 (xii) A statement that a summary of the number,
6-29 nature, and outcome results of grievances filed in
6-30 the previous three years shall be available for
6-31 inspection. Copies of such summary shall be made
6-32 available at reasonable costs.
6-33 (B) Such information shall be disclosed to each
6-34 enrollee under this chapter at the time of enrollment
6-35 and at least annually thereafter.
6-36 (C) Any managed care plan licensed under Chapter 21 of
6-37 this title is deemed to have met the certification
6-38 requirements of this paragraph;
6-39 (2) Access to services. A managed care entity must
6-40 demonstrate that its plan:
H. B. No. 1338
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HB 1338/AP
7- 1 (A) Makes benefits available and accessible to each
7- 2 enrollee electing the managed care plan in the defined
7- 3 service area with reasonable promptness and in a
7- 4 manner which promotes continuity in the provision of
7- 5 health care services;
7- 6 (B) When medically necessary provides health care
7- 7 services 24 hours a day and seven days a week; and
7- 8 (C) Provides payment or reimbursement for emergency
7- 9 services and out-of-area services; and
7-10 (3) Quality assurance program. A managed care plan
7-11 shall comply with the following requirements:
7-12 (A) A managed care plan must have arrangements,
7-13 established in accordance with regulations of the
7-14 Commissioner, for an ongoing quality assurance program
7-15 for health care service it provides to such
7-16 individuals; and
7-17 (B) The quality assurance program shall:
7-18 (i) Provide for a utilization review program which,
7-19 in addition to the requirements of Chapter 46 of
7-20 this title:
7-21 (I) Stresses health outcomes;
7-22 (II) Provides for the establishment of written
7-23 protocols for utilization review, based on current
7-24 standards of the relevant health care profession;
7-25 (III) Provides review by physicians and
7-26 appropriate health care providers of the process
7-27 followed in the provision of such health care
7-28 services;
7-29 (IV) Monitors and evaluates high volume and high
7-30 risk services and the care of acute and chronic
7-31 conditions;
7-32 (V) Evaluates the continuity and coordination of
7-33 care that enrollees receive; and
7-34 (VI) Has mechanisms to detect both
7-35 underutilization and overutilization of services;
7-36 and
7-37 (ii) Establish a grievance procedure which provides
7-38 the enrollee with a prompt and meaningful hearing on
7-39 the issue of denial, in whole or in part, of a
H. B. No. 1338
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HB 1338/AP
8- 1 health care treatment or service or claim therefor.
8- 2 Such hearing shall be conducted by a panel of not
8- 3 less than three persons, at least one member of
8- 4 which shall be a physician other than the medical
8- 5 director of the plan and at least one member of
8- 6 which shall be a health care provider competent by
8- 7 reason of training and licensure in the treatment or
8- 8 procedure which has been denied. The enrollee shall
8- 9 be provided prompt notice in writing of the outcome
8-10 of the grievance procedure. In the event the
8-11 outcome of the grievance is favorable to the
8-12 enrollee, appropriate relief shall be granted
8-13 without delay. In the event the outcome is adverse
8-14 to the enrollee, the notice shall include specific
8-15 findings related to the care, the policies and
8-16 procedures relied upon in making the determination,
8-17 the physician's and provider's recommendations,
8-18 including any recommendations for alternative
8-19 procedures or services, and a description of the
8-20 procedures, if any, for reconsideration of the
8-21 adverse decision.
8-22 33-20A-6. (Index)
8-23 A managed care plan may not use a financial incentive
8-24 program that directly compensates a health care provider
8-25 for ordering or providing less than medically necessary
8-26 and appropriate care to his or her patients. Nothing in
8-27 this Code section shall be deemed to prohibit a managed
8-28 care entity from using a capitated payment arrangement
8-29 consistent with the intent of this Code section.
8-30 33-20A-7. (Index)
8-31 No health care provider may be penalized for discussing
8-32 medically necessary or appropriate care with or on behalf
8-33 of his or her patient.
8-34 33-20A-8. (Index)
8-35 Each managed care plan shall establish procedures to
8-36 safeguard the privacy of individually identifiable patient
8-37 information and to maintain accurate and timely records
8-38 for patients.
8-39 33-20A-9. (Index)
8-40 Every managed care plan shall include provisions that:
H. B. No. 1338
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HB 1338/AP
9- 1 (1) In the event that a patient seeks emergency services
9- 2 and if necessary in the opinion of the emergency health
9- 3 care provider responsible for the patient's emergency
9- 4 care and treatment and warranted by his or her
9- 5 evaluation, such emergency provider may initiate
9- 6 necessary intervention to stabilize the condition of the
9- 7 patient without seeking or receiving prospective
9- 8 authorization by the managed care entity or managed care
9- 9 plan. If in the opinion of the emergency health care
9-10 provider, a patient's condition has stabilized and the
9-11 emergency health care provider certifies that the
9-12 patient can be transported to another facility without
9-13 suffering detrimental consequences or aggravating the
9-14 patient's condition, the patient may be relocated to
9-15 another facility which will provide continued care and
9-16 treatment as necessary; and
9-17 (2) When a managed care plan uses a restrictive
9-18 formulary for prescription drugs, such use shall include
9-19 a written procedure whereby patients can obtain, without
9-20 penalty and in a timely fashion, specific drugs and
9-21 medications not included in the formulary when:
9-22 (A) The formulary's equivalent has been ineffective in
9-23 the treatment of the patient's disease or condition;
9-24 or
9-25 (B) The formulary's drug causes or is reasonably
9-26 expected to cause adverse or harmful reactions in the
9-27 patient.
9-28 33-20A-10. (Index)
9-29 Nothing in this chapter shall apply to Chapter 9 of Title
9-30 34, relating to workers' compensation."
SECTION 1.2.
9-31 Said title is further amended by striking paragraph (2) of
9-32 Code Section 33-21-1, relating to definitions regarding
9-33 health maintenance organizations, and inserting in its place
9-34 the following:
9-35 "(2) 'Enrollee' means an individual who has been
9-36 enrolled in a health benefits plan elected to contract
9-37 for or participate in a health benefits plan for that
9-38 individual or for that individual and that individual's
9-39 eligible dependents."
H. B. No. 1338
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HB 1338/AP
SECTION 1.3.
10- 1 Said title is further amended by adding immediately
10- 2 following paragraph (7) of said Code section a new paragraph
10- 3 to read as follows:
10- 4 "(7.1) 'Patient' means a person who seeks or receives
10- 5 health care services from a health maintenance
10- 6 organization."
SECTION 2.
10- 7 Said title is further amended in Code Section 33-21-13,
10- 8 relating to evidence of coverage under a health maintenance
10- 9 organization, by striking paragraph (3) of subsection (c) in
10-10 its entirety and inserting in its place the following:
10-11 "(3) A clear and complete statement, if a contract, or a
10-12 reasonably complete summary, if a certificate, of: (A) The health care services and the insurance or
10-14 other benefits, if any, to which the enrollee is
10-15 entitled under the health benefits plan; (B) Any limitations on the services, kind of services,
10-17 benefits, or kind of benefits to be provided,
10-18 including any deductible or copayment feature; (C) Where and in what manner information is available
10-20 as to how services may be obtained; (D) The total amount of payment for health care
10-22 services and the indemnity or service benefits, if
10-23 any, which the enrollee is obligated to pay with
10-24 respect to individual contracts or an indication
10-25 whether the plan is contributory or noncontributory
10-26 with respect to group certificates; and (E) A clear and understandable description of the
10-28 health maintenance organization's method for resolving
10-29 enrollee complaints; and
10-30 (3) A disclosure to enrollees and prospective enrollees
10-31 who inquire as individuals into the plan or plans
10-32 offered by the health maintenance organization the
10-33 information required by this paragraph. In the case of
10-34 an employer negotiating for a health care plan or plans
10-35 on behalf of his or her employees, sufficient copies of
10-36 disclosure information shall be made available to
10-37 employees upon request. Disclosure under this paragraph
10-38 shall be readable, understandable, and on a standardized
H. B. No. 1338
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HB 1338/AP
11- 1 form containing information regarding all of the
11- 2 following for each plan it offers:
11- 3 (A) The health care services or other benefits under
11- 4 the plan offered as well as limitations on services,
11- 5 kinds of services, benefits, or kinds of benefits to
11- 6 be provided;
11- 7 (B) Rules regarding copayments, prior authorization,
11- 8 or review requirements including, but not limited to,
11- 9 preauthorization review, concurrent review,
11-10 postservice review, or postpayment review that could
11-11 result in the enrollee's being denied coverage or
11-12 provision of a particular service;
11-13 (C) Potential liability for cost sharing for out of
11-14 network services, including but not limited to
11-15 providers, drugs, and devices or surgical procedures
11-16 that are not on a list or a formulary;
11-17 (D) The financial obligations of the enrollee,
11-18 including premiums, deductibles, copayments, and
11-19 maximum limits on out-of-pocket expenses for items and
11-20 services (both in and out of network);
11-21 (E) The number, mix, and distribution of participating
11-22 providers. An enrollee or a prospective enrollee
11-23 shall be entitled to a list of individual
11-24 participating providers upon request;
11-25 (F) Enrollee rights and responsibilities, including an
11-26 explanation of the grievance process provided under
11-27 Chapter 20A of this title;
11-28 (G) An explanation of what constitutes an emergency
11-29 situation and what constitutes emergency services, as
11-30 defined in Chapter 20A of this title;
11-31 (H) The existence of any limited utilization incentive
11-32 plans as defined in Chapter 20A of this title;
11-33 (I) The existence of restrictive formularies or prior
11-34 approval requirements for prescription drugs. An
11-35 enrollee or a prospective enrollee shall be entitled,
11-36 upon request, to a description of specific drug and
11-37 therapeutic class restrictions; and
11-38 (J) The existence of limitations on choices of health
11-39 care providers."
H. B. No. 1338
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HB 1338/AP
SECTION 3.
12- 1 Said title is further amended in Chapter 21, relating to
12- 2 health maintenance organizations, by adding after Code
12- 3 Section 33-21-18 a new Code Section 33-21-18.1 to read as
12- 4 follows:
12- 5 "33-21-18.1. (Index)
12- 6 Every health benefits plan of every health maintenance
12- 7 organization shall include provisions that:
12- 8 (1) In the event a patient seeks emergency services and
12- 9 if necessary in the opinion of the health care provider
12-10 responsible for the patient's emergency care and
12-11 treatment and warranted by his or her evaluation, such
12-12 emergency provider may initiate necessary intervention
12-13 necessary to stabilize the condition of the patient
12-14 without seeking or receiving prospective authorization
12-15 by the health maintenance organization or health
12-16 benefits plan. If in the opinion of the emergency
12-17 health care provider a patient's condition has
12-18 stabilized and the emergency health care provider
12-19 certifies that the patient can be transported to another
12-20 facility without suffering detrimental consequences or
12-21 aggravating the patient's condition, the patient may be
12-22 relocated to another facility which will provide
12-23 continued care and treatment as necessary; and
12-24 (2) When a health maintenance organization uses a
12-25 restrictive formulary for prescription drugs, such use
12-26 shall include a written procedure whereby patients can
12-27 obtain, without penalty and in a timely fashion,
12-28 specific drugs and medications not included in the
12-29 formulary when:
12-30 (A) The formulary's equivalent has been ineffective in
12-31 the treatment of the patient's disease or condition;
12-32 or
12-33 (B) The formulary's drug causes or is reasonably
12-34 expected to cause adverse or harmful reactions in the
12-35 patient."
SECTION 4.
12-36 All laws and parts of laws in conflict with this Act are
12-37 repealed.
H. B. No. 1338
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Office of the Clerk of the House
Robert E. Rivers, Jr., Clerk of the House
Last Updated on 01/02/97