CHAPTER 16. MEDICAL CLAIMS REVIEW
IC 27-8-16
Chapter 16. Medical Claims Review
IC 27-8-16-0.5
Applicability of chapter
Sec. 0.5. (a) This chapter applies to the following:
(1) A person who conducts medical claims review concerninghealth care services delivered to an enrollee in Indiana.
(2) A person who acts as a claim review consultant concerningthe:
(A) appropriateness of; or
(B) amount charged for;
a health care service delivered to an enrollee in Indiana.
(b) This chapter does not apply to:
(1) the payment of benefits or compensation;
(2) the furnishing of medical, surgical, hospital, or nursingservices; or
(3) the payment by an insurer or employer to the provider ofhealth care services for services provided;
under IC 22.
As added by P.L.260-1995, SEC.1.
IC 27-8-16-1
"Claim review agent" defined
Sec. 1. (a) As used in this chapter, "claim review agent" meansany entity performing medical claims review on behalf of aninsurance company, a health maintenance organization, or anotherbenefit program providing payment, reimbursement, orindemnification for health care costs to an enrollee.
(b) The term does not include the following:
(1) An insurance company authorized under IC 27-1-3 orIC 27-1-17 to do business in Indiana or the company's affiliatedcompanies.
(2) An entity acting on behalf of the federal or stategovernment. However, an agent described in this subdivisionwho performs medical claims review for a person other than thefederal or state government is a claim review agent who issubject to the requirements of this chapter.
(3) A health maintenance organization or limited service healthmaintenance organization that holds a certificate of authority tooperate under IC 27-13.
(4) An insurance administrator that is licensed underIC 27-1-25.
(5) An individual qualified and acting as an expert witnessunder the Indiana Rules of Trial Procedure.
As added by P.L.128-1992, SEC.2. Amended by P.L.26-1994,SEC.17; P.L.160-2003, SEC.25.
IC 27-8-16-1.5
"Claim review consultant" defined Sec. 1.5. (a) As used in this chapter, "claim review consultant"means a person who:
(1) makes a recommendation or provides consultation to:
(A) an entity engaged in performing medical claims review;or
(B) an insurance company, a health maintenanceorganization, or another benefit program providing payment,reimbursement, or indemnification for health care costs to anenrollee;
concerning the appropriateness of a health care service or theamount charged for a health care service delivered to anenrollee in Indiana; and
(2) is not an employee of an entity referred to in subdivision(1)(A) or (1)(B).
(b) Making a recommendation or providing consultationconcerning a health care service does not render a person a claimreview consultant under this section if the recommendation orconsultation concerns:
(1) coverage provided; or
(2) medical services rendered;
under IC 22.
(c) The term "claim review consultant" does not include thefollowing:
(1) An insurance company authorized under IC 27 to dobusiness in Indiana.
(2) An entity acting on behalf of the federal or stategovernment. However, an agent described in this subdivisionwho performs medical claims review for a person other than thefederal or state government is a claim review agent who issubject to the requirements of this chapter.
(3) A health maintenance organization or limited service healthmaintenance organization that holds a certificate of authority tooperate under IC 27-13.
(4) An insurance administrator that is licensed underIC 27-1-25.
(5) An individual qualified and acting as an expert witnessunder the Indiana Rules of Trial Procedure.
(6) A person who engages in the prospective, concurrent, orretrospective utilization review of health care services.
(7) A person who engages in the identification of alternative,optional medical care that:
(A) requires the approval of the enrollee or coveredindividual; and
(B) does not affect coverage or benefits if rejected by theenrollee or covered individual.
(8) An individual who is a licensed health care provider whomakes a recommendation or provides consultation concerningthe appropriateness of health care service. However, thisexception does not apply if the individual:
(A) makes any recommendations or provides consultation
concerning the amount charged for a health care servicedelivered in Indiana;
(B) makes any recommendations or provides consultationconcerning the appropriateness of hospital services providedby a hospital licensed under IC 12-25 or IC 16-21;
(C) is employed by or under contract with an entity that isrequired to be registered under this chapter; or
(D) has received more than five thousand dollars ($5,000) incompensation during the present calendar year for providingconsultation services concerning the appropriateness ofhealth care services delivered to enrollees in Indiana.
(9) A claim review agent under section 1 of this chapter.
As added by P.L.260-1995, SEC.2. Amended by P.L.160-2003,SEC.26.
IC 27-8-16-2
"Department" defined
Sec. 2. As used in this chapter, "department" refers to thedepartment of insurance.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-3
"Enrollee" defined
Sec. 3. As used in this chapter, "enrollee" means an individualwho has contracted for or who participates in coverage under aninsurance policy, a health maintenance organization contract, oranother benefit program providing payment, reimbursement, orindemnification for the costs of health care for:
(1) the individual;
(2) eligible dependents of the individual; or
(3) both the individual and the individual's eligible dependents.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-4
"Medical claims review" defined
Sec. 4. (a) As used in this chapter, "medical claims review" meansthe determination of the reimbursement to be provided under theterms of an insurance policy, a health maintenance organizationcontract, or another benefit program providing payment,reimbursement, or indemnification for health care costs based on theappropriateness of health care services or the amount charged for ahealth care service delivered to an enrollee.
(b) The term does not include the prospective, concurrent, orretrospective utilization review of health care services.
(c) The term does not include the identification of alternative,optional medical care that:
(1) requires the approval of the enrollee or covered individual;and
(2) does not affect coverage or benefits if rejected by theenrollee or covered individual.As added by P.L.128-1992, SEC.2. Amended by P.L.135-1994,SEC.1.
IC 27-8-16-4.5
"Person" defined
Sec. 4.5. As used in this chapter, "person" means an individual, acorporation, a limited liability company, a partnership, or anunincorporated association.
As added by P.L.260-1995, SEC.3.
IC 27-8-16-5
Certificate of registration; issuance to agent
Sec. 5. (a) A claim review agent may not conduct medical claimsreview concerning health care services delivered to an enrollee inIndiana unless the claim review agent holds a certificate ofregistration issued by the department under this chapter.
(b) To obtain a certificate of registration under this chapter, aclaim review agent must submit to the department an applicationcontaining the following:
(1) The name, address, telephone number, and normal businesshours of the claim review agent.
(2) The name and telephone number of a person that thedepartment may contact concerning the information in theapplication.
(3) Documentation necessary for the department to determinethat the claim review agent is capable of satisfying theminimum requirements set forth in section 7 of this chapter.
(c) An application submitted under this section must be:
(1) signed and verified by the applicant; and
(2) accompanied by an application fee in the amount establishedunder subsection (d).
The commissioner shall deposit an application fee collected underthis subsection into the department of insurance fund established byIC 27-1-3-28.
(d) The department shall set the amount of the application feerequired by subsection (c) and section 6(a) of this chapter in the rulesadopted under section 14 of this chapter. The amount may not bemore than is reasonably necessary to generate revenue sufficient tooffset the costs incurred by the department in carrying out thedepartment's responsibilities under this chapter.
(e) The department shall issue a certificate of registration to aclaim review agent that satisfies the requirements of this section.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,SEC.4; P.L.173-2007, SEC.36; P.L.234-2007, SEC.193.
IC 27-8-16-5.2
Certificate of registration; application; requirements; applicationfee
Sec. 5.2. (a) A person may not act as a claim review consultantconcerning health care services delivered to an enrollee in Indiana
unless the person holds a certificate of registration issued by thedepartment under this chapter.
(b) To obtain a certificate of registration under this chapter, aperson must submit to the department an application containing thefollowing:
(1) The name, address, telephone number, and normal businesshours of the person.
(2) The name and telephone number of a person that thedepartment may contact concerning the information in theapplication.
(3) Documentation necessary for the department to determinethat the person is capable of satisfying the minimumrequirements set forth in this chapter.
(c) An application submitted under this section must be:
(1) signed and verified by the applicant; and
(2) accompanied by an application fee in the amount establishedunder subsection (d).
The commissioner shall deposit an application fee collected underthis subsection into the department of insurance fund established byIC 27-1-3-28.
(d) The department shall set the amount of the application feerequired by subsection (c) and section 6(a) of this chapter in the rulesadopted under section 14 of this chapter. The amount may not bemore than is reasonably necessary to generate revenue sufficient tooffset the costs incurred by the department in carrying out thedepartment's responsibilities under this chapter.
(e) The department shall issue a certificate of registration to aclaim review consultant that satisfies the requirements of thissection.
As added by P.L.260-1995, SEC.5. Amended by P.L.173-2007,SEC.37; P.L.234-2007, SEC.194.
IC 27-8-16-6
Certificate of registration; renewal; transfer; notice of change ininformation
Sec. 6. (a) To remain in effect, a certificate of registration issuedunder this chapter must be renewed on June 30 of each year. Toobtain the renewal of a certificate of registration, a claim reviewagent or a claim review consultant must submit an application to thecommissioner. The application must be accompanied by aregistration fee in the amount set under section 5(d) of this chapter.The commissioner shall deposit a registration fee collected under thissubsection into the department of insurance fund established byIC 27-1-3-28.
(b) A certificate of registration issued under this chapter may notbe transferred unless the department determines that the person towhich the certificate of registration is to be transferred has satisfiedthe requirements of this chapter.
(c) If there is a material change in any of the information set forthin an application submitted under this chapter, the claim review agent
or claim review consultant that submitted the application shall notifythe department of the change in writing not more than thirty (30)days after the change.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,SEC.6; P.L.173-2007, SEC.38; P.L.234-2007, SEC.195.
IC 27-8-16-7
Minimum claim review agent requirements
Sec. 7. A claim review agent must satisfy the following minimumrequirements:
(1) Provide toll free telephone access at least forty (40) hourseach week during normal business hours.
(2) Maintain a telephone call recording system capable ofaccepting or recording incoming telephone calls or providinginstructions during hours other than normal business hours.
(3) Respond to each telephone call left on the recording systemmaintained under subdivision (2) within two (2) business daysafter receiving the call.
(4) Protect the confidentiality of the medical records disclosedto the claim review agent.
(5) Include in every notification of a medical reviewdetermination based on the appropriateness of health careservices delivered to an enrollee the principal reason for thedetermination.
(6) Ensure that every medical claims review determinationbased on the appropriateness of health care services deliveredto an enrollee is:
(A) made by a provider; or
(B) determined in accordance with standards or guidelinesapproved by a provider;
who holds a license in the same discipline as the provider whorendered the service.
(7) Include in every notification of a medical reviewdetermination based on the appropriateness of the amountcharged for a health care service delivered to an enrollee thefollowing:
(A) An explanation of the factual basis for thedetermination.
(B) If the determination is based on any information from aclaims data base, the name and address of the person orentity compiling the data base.
(C) If the determination is based on any information from aclaims data base, a statement whether any of the informationwas obtained from a data base regarding amounts chargedfor health services performed outside Indiana.
(D) Any percentile limiter applied to determine theappropriateness of an amount charged for a health serviceprovided to an enrollee.
(8) Ensure that every provider referred to in subdivision (6)who makes medical claims review determinations or approves
standards or guidelines for medical claims reviewdeterminations for the claim review agent has a current licenseissued by a state licensing agency in the United States.
(9) Develop a medical claims review plan and file a summaryof the plan with the department.
As added by P.L.128-1992, SEC.2. Amended by P.L.135-1994,SEC.2.
IC 27-8-16-8
Appeals procedure; written description; minimum standards;notice of appeal procedure on limitation or reduction of benefits
Sec. 8. (a) An insurance company, a health maintenanceorganization, or another benefit program providing payment,reimbursement, or indemnification for health care costs that contractswith a claim review agent for medical claims review services shallmaintain and make available upon request a written description ofthe appeals procedure by which an enrollee may seek a review of adetermination by the claim review agent.
(b) The appeals procedure referred to in subsection (a) must meetthe following requirements:
(1) On appeal, the determination must be made by a providerwho holds a license in the same discipline as the provider whorendered the service.
(2) The adjudication of an appeal of a determination must becompleted within thirty (30) days after:
(A) the appeal is filed; and
(B) all information necessary to complete the appeal isreceived.
(c) If a medical review determination results in a limitation orreduction of benefits, a notice of the appeals procedure shall beprovided by the claim review agent to the provider who rendered thehealth care services.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-9
Provider's statement; documentation of review agent capability
Sec. 9. To provide documentation demonstrating that a claimreview agent is capable of satisfying the requirement of section 7(6)of this chapter, the claim review agent must provide a signedstatement of a provider employed by the claim review agent verifyingthat determinations are:
(1) made by; or
(2) determined in accordance with standards or guidelinesapproved by;
a provider licensed in the same discipline as the provider whorendered the service.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-9.5
Claim determinations based on data base information Sec. 9.5. (a) As used in this section, "data base" means a data basethat provides information concerning health care services or amountscharged for health care services.
(b) If a claim review agent bases a medical claims reviewdetermination concerning a health care service provided by a hospitallicensed under IC 12-25 or IC 16-21 in whole or in part oninformation obtained from a data base, the information must relateexclusively to services provided by a hospital licensed underIC 12-25 or IC 16-21.
(c) If a claim review consultant makes a recommendation orprovides consultation concerning the appropriateness of or theamount charged for services provided by a hospital licensed underIC 12-25 or IC 16-21 based in whole or in part on informationobtained from a data base, the information must relate exclusively toservices provided by a hospital licensed under IC 12-25 or IC 16-21.
(d) This section does not apply to:
(1) medical claims review determinations made undersubsection (b); or
(2) consultations or recommendations made under subsection(c);
regarding medical services provided under IC 22.
As added by P.L.260-1995, SEC.7.
IC 27-8-16-10
Fraudulent or misleading information; penalties
Sec. 10. A provider, an enrollee, or an agent of a provider orenrollee who provides fraudulent or misleading information to aclaim review agent is subject to the appropriate administrative, civil,and criminal penalties.
As added by P.L.128-1992, SEC.2.
IC 27-8-16-11
Prohibited bases for compensation of claim review agents andconsultants
Sec. 11. (a) The compensation of a claim review agent for theperformance of medical claims review may not be based on theamount by which claims are reduced for payment.
(b) The compensation of a claim review consultant for making arecommendation or providing consultation concerning theappropriateness of or amount charged for a health care servicedelivered to an enrollee in Indiana may not be based on the amountby which a claim relating to the service is reduced for payment.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,SEC.8.
IC 27-8-16-12
Violations; claims review agent; notice; cease and desist orders;penalties; revocation or suspension of registration; review
Sec. 12. (a) If the department believes that a claim review agentor claim review consultant has violated this chapter, the department
shall notify the claim review agent or claim review consultant of thealleged violation.
(b) The claim review agent or claim review consultant shallrespond to a notice given under subsection (a) within thirty (30) daysafter receiving the notice.
(c) If the department:
(1) believes that a claim review agent or claim reviewconsultant has violated this chapter; and
(2) is not satisfied, based on the response given by the claimreview agent or claim review consultant under subsection (b),that the violation has been corrected;
the department shall order the claim review agent or claim reviewconsultant under IC 4-21.5-3-6 to cease all claims review activitiesin Indiana.
(d) If the department determines that a claim review agent orclaim review consultant has violated this chapter, the department:
(1) shall order the claim review agent or claim reviewconsultant to cease and desist from engaging in the violation;and
(2) may do either or both of the following:
(A) Order the claim review agent or claim review consultantto pay a civil penalty of not more than five thousand dollars($5,000) if the claim review agent or claim review consultanthas committed violations with a frequency that indicates ageneral business practice.
(B) Suspend or revoke the certificate of registration of theclaim review agent or claim review consultant.
(e) An order issued or a ruling made by the department under thissection is subject to review under IC 4-21.5.
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,SEC.9.
IC 27-8-16-13
Confidential information
Sec. 13. (a) This chapter does not require a claim review agent orclaim review consultant to disclose information that is proprietary.
(b) Any:
(1) information concerning standards, criteria, or medicalprotocols used by a claim review agent in conducting medicalclaims review; and
(2) other proprietary information concerning medical claimsreview conducted by a claim review agent;
that is disclosed to the department under this chapter is confidentialfor the purposes of IC 5-14-3-4(a)(1).
As added by P.L.128-1992, SEC.2. Amended by P.L.260-1995,SEC.10.
IC 27-8-16-14
Rules
Sec. 14. The department shall adopt rules under IC 4-22-2
necessary to carry out this chapter.
As added by P.L.128-1992, SEC.2.