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`SEC. 503B. INDEPENDENT EXTERNAL APPEALS PROCEDURES FOR GROUP HEALTH PLANS.

`(a) RIGHT TO EXTERNAL APPEAL- A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, shall provide in accordance with this section participants and beneficiaries (or authorized representatives) with access to an independent external review for any denial of a claim for benefits.

`(b) INITIATION OF THE INDEPENDENT EXTERNAL REVIEW PROCESS-

`(1) TIME TO FILE- A request for an independent external review under this section shall be filed with the plan or issuer not later than 60 business days after the date on which the participant or beneficiary receives notice of the denial under section 503A(b)(4) or the date on which the internal review is waived by the plan or issuer under section 503A(b)(1)(D).

`(2) FILING OF REQUEST-

`(A) IN GENERAL- Subject to the succeeding provisions of this subsection, a group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, may--

`(i) except as provided in subparagraph (B)(i), require that a request for review be in writing;

`(ii) limit the filing of such a request to the participant or beneficiary involved (or an authorized representative);

`(iii) except if waived by the plan or issuer under section 503A(b)(1)(D), condition access to an independent external review under this section upon a final determination of a denial of a claim for benefits under the internal review procedure under section 503A;

`(iv) except as provided in subparagraph (B)(ii), require payment of a filing fee to the plan or issuer of a sum that does not exceed $50; and

`(v) require that a request for review include the consent of the participant or beneficiary (or authorized representative) for the release of medical information or records of the participant or beneficiary to the qualified external review entity for purposes of conducting external review activities.

`(B) REQUIREMENTS AND EXCEPTION RELATING TO GENERAL RULE-

`(i) ORAL REQUESTS PERMITTED IN EXPEDITED OR CONCURRENT CASES- In the case of an expedited or concurrent external review as provided for under subsection (e), the request may be made orally. In such case a written confirmation of such request shall be made in a timely manner. Such written confirmation shall be treated as a consent for purposes of subparagraph (A)(v).

`(ii) EXCEPTION TO FILING FEE REQUIREMENT-

`(I) INDIGENCY- Payment of a filing fee shall not be required under subparagraph (A)(iv) where there is a certification (in a form and manner specified in guidelines established by the Secretary) that the participant or beneficiary is indigent (as defined in such guidelines). In establishing guidelines under this subclause, the Secretary shall ensure that the guidelines relating to indigency are consistent with the poverty guidelines used by the Secretary of Health and Human Services under title XIX of the Social Security Act.

`(II) FEE NOT REQUIRED- Payment of a filing fee shall not be required under subparagraph (A)(iv) if the plan or issuer waives the internal appeals process under section 503A(b)(1)(D).

`(III) REFUNDING OF FEE- The filing fee paid under subparagraph (A)(iv) shall be refunded if the determination under the independent external review is to reverse the denial which is the subject of the review.

`(IV) INCREASE IN AMOUNT- The amount referred to in subclause (I) shall be increased or decreased, for each calendar year that ends after December 31, 2001, by the same percentage as the percentage by which the Consumer Price Index for All Urban Consumers (United States city average), published by the Bureau of Labor Statistics, for September of the preceding calendar year has increased or decreased from the such Index for September of 2001.

`(c) REFERRAL TO QUALIFIED EXTERNAL REVIEW ENTITY UPON REQUEST-

`(1) IN GENERAL- Upon the filing of a request for independent external review with the group health plan, or health insurance issuer offering coverage in connection with a group health plan, the plan or issuer shall refer such request to a qualified external review entity selected in accordance with this section.

`(2) ACCESS TO PLAN OR ISSUER AND HEALTH PROFESSIONAL INFORMATION- With respect to an independent external review conducted under this section, the participant or beneficiary (or authorized representative), the plan or issuer, and the treating health care professional (if any) shall provide the external review entity with access to information that is necessary to conduct a review under this section, as determined by the entity, not later than 5 business days after the date on which a request is referred to the qualified external review entity under paragraph (1), or earlier as determined appropriate by the entity to meet the applicable timelines under clauses (ii) and (iii) of subsection (e)(1)(A).

`(3) SCREENING OF REQUESTS BY QUALIFIED EXTERNAL REVIEW ENTITIES-

`(A) IN GENERAL- With respect to a request referred to a qualified external review entity under paragraph (1) relating to a denial of a claim for benefits, the entity shall refer such request for the conduct of an independent medical review unless the entity determines that--

`(i) any of the conditions described in subsection (b)(2)(A) have not been met;

`(ii) the thresholds described in subparagraph (B) have not been met;

`(iii) the denial of the claim for benefits does not involve a medically reviewable decision under subsection (d)(2);

`(iv) the denial of the claim for benefits relates to a decision regarding whether an individual is a participant or beneficiary who is enrolled under the terms of the plan or coverage (including the applicability of any waiting period under the plan or coverage); or

`(v) the denial of the claim for benefits is a decision as to the application of cost-sharing requirements or the application of a specific exclusion or express limitation on the amount, duration, or scope of coverage of items or services under the terms and conditions of the plan or coverage unless the decision is a denial described in subsection (d)(2)(C);

Upon making a determination that any of clauses (i) through (v) applies with respect to the request, the entity shall determine that the denial of a claim for benefits involved is not eligible for independent medical review under subsection (d), and shall provide notice in accordance with subparagraph (D).

`(B) THRESHOLDS-

`(i) IN GENERAL- The thresholds described in this subparagraph are that--

`(I) the total amount payable under the plan or coverage for the item or service that was the subject of such denial exceeds a significant financial threshold (as determined under guidelines established by the Secretary); or

`(II) a physician has asserted in writing that there is a significant risk of placing the life, health, or development of the participant or beneficiary in jeopardy if the denial of the claim for benefits is sustained.

`(ii) THRESHOLDS NOT APPLIED- The thresholds described in this subparagraph shall not apply if the plan or issuer involved waives the internal appeals process with respect to the denial of a claim for benefits involved under section 503A(b)(1)(D).

`(C) PROCESS FOR MAKING DETERMINATIONS-

`(i) NO DEFERENCE TO PRIOR DETERMINATIONS- In making determinations under subparagraph (A), there shall be no deference given to determinations made by the plan or issuer under section 503A or the recommendation of a treating health care professional (if any).

`(ii) USE OF APPROPRIATE PERSONNEL- A qualified external review entity shall use appropriately qualified personnel to make determinations under this section.

`(D) NOTICES AND GENERAL TIMELINES FOR DETERMINATION-

`(i) NOTICE IN CASE OF DENIAL OF REFERRAL- If the entity under this paragraph does not make a referral to an independent medical reviewer, the entity shall provide notice to the plan or issuer, the participant or beneficiary (or authorized representative) filing the request, and the treating health care professional (if any) that the denial is not subject to independent medical review. Such notice--

`(I) shall be written (and, in addition, may be provided orally) in a manner calculated to be understood by an average participant;

`(II) shall include the reasons for the determination; and

`(III) include any relevant terms and conditions of the plan or coverage.

`(ii) GENERAL TIMELINE FOR DETERMINATIONS- Upon receipt of information under paragraph (2), the qualified external review entity, and if required the independent medical reviewer, shall make a determination within the overall timeline that is applicable to the case under review as described in subsection (e), except that if the entity determines that a referral to an independent medical reviewer is not required, the entity shall provide notice of such determination to the participant or beneficiary (or authorized representative) within 2 business days of such determination.

`(d) INDEPENDENT MEDICAL REVIEW-

`(1) IN GENERAL- If a qualified external review entity determines under subsection (c) that a denial of a claim for benefits is eligible for independent medical review, the entity shall refer the denial involved to an independent medical reviewer for the conduct of an independent medical review under this subsection.

`(2) MEDICALLY REVIEWABLE DECISIONS- A denial described in this paragraph is one for which the item or service that is the subject of the denial would be a covered benefit under the terms and conditions of the plan or coverage but for one (or more) of the following determinations:

`(A) DENIALS BASED ON MEDICAL NECESSITY AND APPROPRIATENESS- The basis of the determination is that the item or service is not medically necessary and appropriate.

`(B) DENIALS BASED ON EXPERIMENTAL OR INVESTIGATIONAL TREATMENT- The basis of the determination is that the item or service is experimental or investigational.

`(C) DENIALS OTHERWISE BASED ON AN EVALUATION OF MEDICAL FACTS- A determination that the item or service or condition is not covered but an evaluation of the medical facts by a health care professional in the specific case involved is necessary to determine whether the item or service or condition is required to be provided under the terms and conditions of the plan or coverage.

`(3) INDEPENDENT MEDICAL REVIEW DETERMINATION-

`(A) IN GENERAL- An independent medical reviewer under this section shall make a new independent determination with respect to--

`(i) whether the item or service or condition that is the subject of the denial is covered under the terms and conditions of the plan or coverage; and

`(ii) based upon an affirmative determination under clause (i), whether or not the denial of a claim for a benefit that is the subject of the review should be upheld or reversed.

`(B) STANDARD FOR DETERMINATION- The independent medical reviewer's determination relating to the medical necessity and appropriateness, or the experimental or investigation nature, or the evaluation of the medical facts of the item, service, or condition shall be based on the medical condition of the participant or beneficiary (including the medical records of the participant or beneficiary) and the valid, relevant scientific evidence and clinical evidence, including peer-reviewed medical literature or findings and including expert consensus.

`(C) NO COVERAGE FOR EXCLUDED BENEFITS- Nothing in this subsection shall be construed to permit an independent medical reviewer to require that a group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, provide coverage for items or services that are specifically excluded or expressly limited under the plan or coverage and that are not covered regardless of any determination relating to medical necessity and appropriateness, experimental or investigational nature of the treatment, or an evaluation of the medical facts in the case involved.

`(D) EVIDENCE AND INFORMATION TO BE USED IN MEDICAL REVIEWS- In making a determination under this subsection, the independent medical reviewer shall also consider appropriate and available evidence and information, including the following:

`(i) The determination made by the plan or issuer with respect to the claim upon internal review and the evidence or guidelines used by the plan or issuer in reaching such determination.

`(ii) The recommendation of the treating health care professional and the evidence, guidelines, and rationale used by the treating health care professional in reaching such recommendation.

`(iii) Additional evidence or information obtained by the reviewer or submitted by the plan, issuer, participant or beneficiary (or an authorized representative), or treating health care professional.

`(iv) The plan or coverage document.

`(E) INDEPENDENT DETERMINATION- In making the determination, the independent medical reviewer shall--

`(i) consider the claim under review without deference to the determinations made by the plan or issuer under section 503A or the recommendation of the treating health care professional (if any);

`(ii) consider, but not be bound by the definition used by the plan or issuer of `medically necessary and appropriate', or `experimental or investigational', or other equivalent terms that are used by the plan or issuer to describe medical necessity and appropriateness or experimental or investigational nature of the treatment; and

`(iii) notwithstanding clause (ii), adhere to the definition used by the plan or issuer of `medically necessary and appropriate', or `experimental or investigational' if such definition is the same as the definition of such term--

`(I) that has been adopted pursuant to a State statute or regulation; or

`(II) that is used for purposes of the program established under titles XVIII or XIX of the Social Security Act or under chapter 89 of title 5, United States Code.

`(F) DETERMINATION OF INDEPENDENT MEDICAL REVIEWER- An independent medical reviewer shall, in accordance with the deadlines described in subsection (e), prepare a written determination to uphold or reverse the denial under review. Such written determination shall include the specific reasons of the reviewer for such determination, including a summary of the clinical or scientific-evidence based rationale used in making the determination. The reviewer may provide the plan or issuer and the treating health care professional with additional recommendations in connection with such a determination, but any such recommendations shall not be treated as part of the determination.

`(e) TIMELINES AND NOTIFICATIONS-

`(1) TIMELINES FOR INDEPENDENT MEDICAL REVIEW-

`(A) PRIOR AUTHORIZATION DETERMINATION-

`(i) IN GENERAL- The independent medical reviewer (or reviewers) shall make a determination on a denial of a claim for benefits that is referred to the reviewer under subsection (c)(3) not later than 14 business days after the receipt of information under subsection (c)(2) if the review involves a prior authorization of items or services.

`(ii) EXPEDITED DETERMINATION- Notwithstanding clause (i), the independent medical reviewer (or reviewers) shall make an expedited determination on a denial of a claim for benefits described in clause (i), when a request for such an expedited determination is made by a participant or beneficiary (or authorized representative) at any time during the process for making a determination, and the treating health care professional substantiates, with the request, that a determination under the timeline described in clause (i) would seriously jeopardize the life or health of the participant or beneficiary. Such determination shall be made not later than 72 hours after the receipt of information under subsection (c)(2).

`(iii) CONCURRENT DETERMINATION- Notwithstanding clause (i), a review described in such subclause shall be completed not later than 24 hours after the receipt of information under subsection (c)(2) if the review involves a discontinuation of inpatient care.

`(B) RETROSPECTIVE DETERMINATION- The independent medical reviewer (or reviewers) shall complete a review in the case of a retrospective determination on an appeal of a denial of a claim for benefits that is referred to the reviewer under subsection (c)(3) not later than 30 business days after the receipt of information under subsection (c)(2).

`(2) NOTIFICATION OF DETERMINATION- The external review entity shall ensure that the plan or issuer, the participant or beneficiary (or authorized representative) and the treating health care professional (if any) receives a copy of the written determination of the independent medical reviewer prepared under subsection (d)(3)(F). Nothing in this paragraph shall be construed as preventing an entity or reviewer from providing an initial oral notice of the reviewer's determination.

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