HOUSE BILL NO. 310
AN ACT TO AMEND CHAPTER 3, TITLE 18 OF THE DELAWARE INSURANCE CODE, RELATING TO THE REVIEW AND ARBITRATION OF DISPUTES INVOLVING HEALTH INSURANCE COVERAGE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 3, Title 18, Delaware Code, by adding thereto a new section to read as follows:
"§ 335. Arbitration of Disputes Involving Health Insurance Coverage.
(a) The following definitions shall apply with respect to this Section:
(1) 'Administrative Procedures Act' means Title 29, Chapter 101, Delaware Code.
(2) 'Adverse Determination' means either a Claim Denial or a Denial of Certification or both.
(3) `Claim Denial' means the denial of payment or reimbursement for health care services rendered or health care supplies provided to any resident of this State.
(4) 'Court' means the Superior Court of the State of Delaware.
(5) 'Denial of Certification' means a determination that an admission or continued stay, or course of treatment, or other covered health care service with respect to any resident of the State, does not satisfy the health plan's clinical requirements for appropriateness, necessity, health care setting, and/or level of care.
(6) 'Internal Review Process' means the internal review of an Adverse Determination pursuant to subsection (b) of this Section.
(b) Every insurer providing health insurance coverage and every health plan, health services corporation, and health maintenance organization may maintain, for residents of this State, a procedure for the internal review of an Adverse Determination or shall be subject to the provisions of subsection (c) hereof. The Insurance Commissioner is hereby authorized to approve or disapprove the internal review procedure of any above-described entity based on an application of the standards set forth herein. Such internal review procedure shall be approved, provided that it meets the minimum following criteria:
(1) An internal review of the Adverse Determination by an individual other than the person who made the initial Adverse Determination, provided a request for internal review is filed by a claimant within 60 days;
(2) In the case of an Adverse Determination on the basis that the service or supply was not medically necessary under the terms of the policy or plan, a review of the Adverse Determination by a licensed health care professional;
(3) In the case of the Adverse Determination being upheld upon internal review, a written statement containing:
(i) Reference to the language of the policy or plan which provides the basis for the Adverse Determination;
(ii) A summary of the facts providing the basis for the Adverse Determination;
(i) Identification of the documents, if any, other than the policy or plan, considered in arriving at the Adverse Determination.
(c) Every insurer and every health plan, health services corporation, and every health maintenance organization that has an approved internal review process shall submit a report on its internal review process on an annual basis to the Insurance Commissioner in accordance with regulations established by the Department.
(d) Any resident of the State whose health coverage is provided by an entity described in subsection (b) hereof that lacks an approved Internal Review Process shall have the right to an arbitration hearing as follows:
(1) All arbitration hearings authorized pursuant to this Section shall be administered by the Insurance Commissioner or his/her nominee.
(2) Requests for arbitration shall be in writing and mailed to the Insurance Commissioner within 90 days from the date of receipt of the written statement issued in accordance with subsection (1)(b)(3) above. Neither party shall be held to have waived any of its rights by an act relating to arbitration and either party shall have a right to appeal de novo to the Superior Court so long as notice of appeal is filed with the Court in the manner set forth by its rules within 90 days of the date of the arbitration decision being rendered.
(3) The Insurance Commissioner shall establish a schedule of fees for arbitration which shall not exceed $75.
(4) The fee for arbitration shall be payable to the Department of Insurance at the time of the filing of the request for arbitration and shall be maintained in a special fund identified as the 'arbitration fund' which shall remain separate and segregated from the General Fund. The compensation paid to the arbitration panel shall be payable from this fund.
(5) The Insurance Commissioner shall make reasonable rules and regulations necessary to the administration or effectuation of this Section. Such rules and regulations shall provide, inter alia, for the establishment by the Commissioner or his/her nominee of panels of arbitrators.
(e) Nothing in this section shall be construed to apply to policies or contracts exempt from State regulation under federal law or regulation."
Section 2. The provisions of this Act shall become effective on January 1, 1996.
Approved July 10, 1995