Effective 28 Aug 1993

287.135. Managed care services, department to establish program to certify organizations, procedures — effect on fees and services. — 1. The department of commerce and insurance shall establish a program whereby managed care organizations in this state shall be certified by the department for the provision of managed care services to employers who voluntarily choose to use such organizations. The department shall report to the division of workers' compensation all managed care organizations certified pursuant to the provisions of this section. The division shall maintain a registry of certified managed care organizations that can be readily accessed by employers for the provision of managed care services. For the purposes of this section, the term "managed care organizations" shall mean organizations such as preferred provider organizations, health maintenance organizations and other direct employer/provider arrangements which have been certified by the department designed to provide incentives to medical care providers to manage the cost and use of care associated with claims covered by workers' compensation insurance.

2. The director of the department of commerce and insurance shall promulgate rules which set out the approval criteria for certification of a managed care organization. Approval criteria shall take into consideration the adequacy of services that the organization will be able to offer the employer, the geographic area to be served, staff size and makeup of the organization in relation to both services offered and geographic location, access to health care providers, the adequacy of internal management and oversight, the adequacy of procedures for peer review, utilization review, and internal dispute resolution, including a method to resolve complaints by injured employees, medical providers, and insurers over the cost, necessity and appropriateness of medical services, the availability of case management services, and any other criteria as determined by the director. Thirty days prior to the annual anniversary of any current certification granted by the director, any managed care organization seeking continued certification shall file an application for recertification with the director, on a form approved by the director, accompanied by a filing fee established by the director by rule and any other materials specified by the director.

3. The director of the department of commerce and insurance shall promulgate rules which set out the criteria under which the fees charged by a managed care organization shall be reimbursed by an employer's workers' compensation insurer and which establish criteria providing for the coordination and integration between the managed care organization and the insurer of their respective internal operational systems relating to such matters as claim reporting and handling, medical case management procedures and billing. Such criteria shall require any such reimbursable fees to be reasonable in relation both to the managed care services provided and to the savings which result from those services. Such criteria shall discourage the use of fee arrangements which result in unjustified costs being billed for either medical services or managed care services. Insurers and managed care organizations shall be permitted to voluntarily negotiate and utilize alternative fee arrangements. Notwithstanding any provision of this subsection to the contrary, if an insurer and a managed care organization enter into a voluntary agreement that accomplishes the same purposes as this subsection, that insurer and that managed care organization with respect to that agreement shall not be required to meet the requirements of this subsection or regulations promulgated by the department pursuant to this subsection.

4. Any managed care organization, including any managed care organization that has been established or selected by or has contracted with a workers' compensation insurance carrier to provide managed care services to insured employers, that has previously been certified prior to August 28, 1993, by the director of the department of commerce and insurance shall be deemed to have met the criteria set forth in this section.

5. The necessity and appropriateness of medical care services recommended or provided by providers shall be subject to review by the division of workers' compensation, upon application, following a decision by the managed care organization's utilization review and dispute resolution review and appeal procedure. The decision of the managed care organization relating to payment for such medical care services shall be subject to modification by the division of workers' compensation, after mediation conference or hearing, only upon showing that it was unreasonable, arbitrary or capricious.

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(L. 1993 S.B. 251)