In the Matter of: |
|
The Proposed Insurance |
Department Regulation No. 82 |
Docket No. 99-28 |
Order
COMES NOW, the Insurance Commissioner of the State of Delaware and Orders in conformance with the Proposed Order and Recommendation of the Hearing Officer as follows:
WHEREAS, I have considered the Proposed Order and Recommendation submitted by the Hearing Officer, as well as the entire record of this matter; and
WHEREAS, I adopt the Proposed Order and Recommendation and incorporate the summary of evidence, the proposed findings of fact, and the recommendation of the Hearing Officer by this reference.
NOW THEREFORE, I Order that Regulation No.82 be promulgated as referenced herein, effective on January 1, 2000.
SO ORDERED this 21st day of September 1999.
Donna Lee Williams
Insurance CommissionerState of Delaware
Proposed Order and Recommendations
Proposed Regulation 82 requires health insurance companies to make appropriate payment to health care providers when more than one surgical service is performed on the same patient, by the same physician on the same day.
On June 1, 1999, the proposed regulation was published in the Register of Regulations in accordance with 29 Del. C. chapters 11 and 101. Also in accordance with 29 Del. C. chapter 101, notices of the public hearing were published in newspapers throughout the state (see Exhibit 1). The public hearing was held on June 24, 1999 before the below-signed hearing officer. The record was left open until July 9, 1999 to allow for the submission of additional exhibits by interested parties. The following is the Proposed Order and Recommendation regarding the adoption of Regulation 82.
Present at the June 24 hearing were numerous individuals representing healthcare providers the insurance industry and others. A list of attendees is attached hereto as Exhibit “A”.
I. Summary of the Evidence
The evidence in this matter consists of the oral testimony of 15 individuals, as well as numerous written submissions by interested parties attached hereto as exhibits. In making the following recommendation I have considered the contents of the file, including the oral testimony given at the aforementioned public hearing and the exhibits attached hereto. In summary, strong support for applying existing Medicare rules and regulations for the payment of multiple surgical procedures was expressed by healthcare providers who testified at the hearing. Criticisms of the proposed Regulation include:
1. Concern that the adoption of proposed Regulation 82 would increase healthcare costs in the form of higher premium expenses;
2. Lack of jurisdiction;
3. Paragraph (3) of §5 differs from the Medicare policy and is unjustifiably broad;
4. Use of the undefined term “fee schedule” raises the question whether Medicare fee schedules are to be enforced in the non-Medicare market; and
5. Use of the term health insurance or benefits is so broad as to be construed to include some property casualty products of insurance.
6. §7 as proposed gives rise to penalties absent an order of the Commissioner
II. Findings of Fact and Conclusions of Law
Based upon the evidence received in this matter both oral and written, I find that the adoption of standards for the payment of multiple surgical procedures is advisable as a matter of fundamental fairness and to minimize the patient’s risk and inconvenience of multiple surgeries. I find that:
1. The public policy justification for ensuring proper treatment of multiple surgical procedures outweighs the risk of relatively slight premium increases;
2. The Insurance Commissioner possesses the jurisdiction to promulgate Regulation 82 on the grounds that failure to pay claims properly and fairly constitutes a violation of subparagraphs d. and f. of 18 Del. C. §2304(16). Further, the Commissioner is authorized under §2312 and §311 to issue reasonable regulations that are necessary to prohibit practices identified in §2304.
3. Paragraph (3) of §5 is broader than Medicare rules provide and may be interpreted to conflict with preceding standards;
4. The term “fee schedule” should be defined to clarify its meaning;
5. It is the Department’s intent to restrict application of the multiple surgical procedure standards of proposed Regulation 82 to health insurance plans offering comprehensive, major medical coverage and not to apply them to any property/casualty insurance or limited benefit plans; and
6. §7 is to be revised to clarify that penalties are recoverable only pursuant to an order of the Commissioner.
I recommend a number of additional technical revisions to the proposed regulation as they appear in the “marked up” version of Regulation 83 attached hereto as Exhibit “B”.
III. Recommendation
For the above reasons, it is recommended that the Insurance Commissioner adopt Regulation 82 in the form attached as Exhibit “B”.
SO RECOMMENDED, this 20th day of September 1999
Fred A. Townsend III
Hearing Officer
Reg. 82, Standards of Payment for Multiple Surgical Procedures
Sections
1. Authority
2. Definitions
3. Scope
4. Purpose
5. Procedure for Payment
6. General Business Practice
7. Penalty
8. Causes of Action and Defenses
9. Effective Date
§1. Authority.
This regulation is adopted by the Commissioner pursuant to 18 Del. C. §§311, 2304(16) and 2312. It is promulgated in accordance with 29 Del. C. Chapter 101.
§ 2. Definitions.
For the purpose of this regulation, the following definitions shall apply:
(a) Health insurer: health insurance companies, health maintenance organizations, health service corporations and any other entity providing a plan of health insurance or benefits subject to state insurance regulations.
(b) Health Care Provider: any entity or individual licensed, certified or otherwise permitted by law to provide health care in the ordinary course of business, practice or profession.
(c) Policyholder or Certificate Holder: a person covered under such policy or a representative designated by such person and entitled to services provided in the policy.
[(d) Fee schedule: the monetary allowance payable to a healthcare provider for services rendered as provided for by agreement between the health care provider and the health insurer.]
§ 3. Scope.
This regulation shall apply to all health insurers as defined in § 2 above, and shall apply to all contracts for insurance [and certificates of coverage] issued by [these such] entities.
§ 4. Purpose.
The purpose of this regulation is to ensure that health insurers provide proper payment to health care providers when more than one surgical service is performed on the same patient, by the same physician, on the same day.
§ 5. Procedure for payment of multiple surgical services.
When more than one surgical service is performed on the same patient, by the same
physician and on the same day, insurers shall make payment to the providers as follows:
(1) One hundred per cent (100%) of the fee schedule for the procedure which has the highest regular fee schedule amount; and
(2) For each additional procedure, performed through the same incision or separate incisions, as set forth in the National Correct Coding Manual established by Administar Federal under contract with the Health Care Financing Administration, not less than fifty per cent (50%) of the fee schedule amount.
[(3) For unrelated surgical procedures (e.g., partial thyroid removal and a hernia repair), one hundred per cent (100%) of the fee schedule for each procedure performed on multiple body parts.]
§ 6. General Business Practice.
(a) Within a 36 month period, three instances of a health insurer’s failure to pay a claim or bill for services [promptly,] as defined in section 5 above [and in accordance with Insurance Department regulation governing the timeliness of claims handling], shall give rise to a rebuttable presumption that the insurer is in violation of 18 Del. C. §2304(16)(f).
(b) The 36 month period established in paragraph (a) above shall be measured based upon the date the complaints are received at the Department. Each claim or bill, or portion of a claim or bill, pertaining to a single medical treatment or procedure provided to an individual policyholder that is processed in violation of this regulation shall constitute an “instance” as described in paragraph (a) above.
§ 7. Penalties.
In addition to the imposition of penalties in accordance with 18 Del.C. §2312(b), any health insurer that fails to adhere to the standards contained in this regulation may be required by order of the Commissioner to pay to the health care provider or claimant, in full settlement of the claim or bill for heath care services, the amount of the claim or bill plus interest at the maximum rate allowable to lenders under 6 Del. C. §2301(a). [This Such] interest shall be computed from the date the claim or bill for services first became due.
§ 8. Causes of Action and Defenses.
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a health insurer or its representative based upon a violation of 18 Del. C. §2304(16). In the same manner, nothing in this regulation shall establish a defense for any party to any cause of action based upon a violation of 18 Del. C. §2304(16).
§ 9. Effective Date.
This regulation shall become effective [on January 1, 2000 120 days from the date signed by the Commissioner.]