State Law

Virginia Admin Code-Title 12-Agency 5-Chapter 408. Certificate of Quality Assurance of Managed Care Health Insurance Plan Licensees

08/26/2023 Virginia Section 5-408-10

Definitions

Medical Necessity-Definition

See bold text below:

Part I. Definitions and General Information

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

“Adverse decision” means a utilization review determination by the utilization review entity that a health service rendered or proposed to be rendered was not or is not medically necessary, when such determination may result in noncoverage of the health service or health services. When the policy, contract, plan, certificate, or evidence of coverage includes coverage for prescription drugs and the health service rendered or proposed to be rendered is a prescription for the alleviation of cancer pain, any adverse decision shall be made within 24 hours of the request for coverage.

“Appeal” means a formal request by a covered person or a provider on behalf of a covered person for reconsideration of a decision, such as a final adverse decision, a benefit payment, a denial of coverage, or a reimbursement for service.

“Basic health care services” means those health care services, as applicable to the type of managed care health insurance plan, described in § 38.2-5800 of the Code of Virginia which are required to be provided, arranged, paid for, or reimbursed by the managed care health insurance plan licensee for its covered persons.

“Board” means the Board of Health.

“Bureau of Insurance” means the State Corporation Commission acting pursuant to Title 38.2 of the Code of Virginia.

“Center” means the Center for Quality Health Care Services and Consumer Protection of the Virginia Department of Health.

“Certificate” means a certificate of quality assurance.

“Complaint” means a written communication from a covered person primarily expressing a grievance. A complaint may pertain to the availability, delivery, or quality of health care services including claims payments, the handling or reimbursement for such services, or any other matter pertaining to the covered person’s contractual relationship with the MCHIP.

“Covered person” means an individual residing in the Commonwealth, whether a subscriber, policyholder, enrollee, or member, of a managed care health insurance plan (MCHIP), who is entitled to health services or benefits provided, arranged for, paid for, or reimbursed pursuant to an MCHIP.

“Delegated service entity” means the entity with which an MCHIP licensee contracts to provide one or more of the services listed in 12VAC5-408-320 A for one or more of its MCHIPs, pursuant to and in accordance with the provisions of Part VI (12VAC5-408-320 et seq.) of this chapter, inclusive.

“Department” means the Virginia Department of Health.

“Emergency services” means those health care services as defined in § 38.2-3438 of the Code of Virginia.

“Evidence of coverage” means any certificate, individual or group agreement or contract, or identification card or related document issued in conjunction with the certificate, agreement or contract, issued to a covered person setting out the coverage and other rights to which a covered person is entitled.

“Final adverse decision” means a utilization review determination made by a physician advisor or peer of the treating health care provider in a reconsideration of an adverse decision, and upon which a provider or patient may base an appeal.

“Health care data reporting system” means the state contracted integrated system for the collection and analysis of data used by consumers, employers, providers, and purchasers of health care to continuously assess and improve the quality of health care in the Commonwealth.

“Health care provider” or “provider” has the same meaning ascribed to the term in § 32.1-127.1:03 B of the Code of Virginia.

“Health care services” means services as defined in § 38.2-3438 of the Code of Virginia.

“Health carrier” means an entity as defined in § 38.2-3438 of the Code of Virginia.

“Managed care health insurance plan” or “MCHIP” means an arrangement for the delivery of health care in which a health carrier, as defined in § 38.2-5800 of the Code of Virginia, undertakes to provide, arrange for, pay for, or reimburse any of the costs of health care services for a covered person on a prepaid or insured basis which (i) contains one or more incentive arrangements, including any credentialing requirements intended to influence the cost or level of health care services between the health carrier and one or more providers with respect to the delivery of health care services and (ii) requires or creates benefit payment differential incentives for covered persons to use providers that are directly or indirectly managed, owned, under contract with or employed by the health carrier. Any health maintenance organization as defined in § 38.2-4300 of the Code of Virginia or health carrier that offers preferred provider contracts or policies as defined in § 38.2-3407 of the Code of Virginia or preferred provider subscription contracts as defined in § 38.2-4209 of the Code of Virginia shall be deemed to be offering one or more managed care health insurance plans. For the purposes of this definition, the prohibition of balance billing by a provider shall not be deemed a benefit payment differential incentive for covered persons to use providers who are directly or indirectly managed, owned, under contract with or employed by the health carrier. A single managed care health insurance plan may encompass multiple products and multiple types of benefit payment differentials; however, a single managed care health insurance plan shall encompass only one provider network or set of provider networks.

“Managed care health insurance plan licensee” or “MCHIP licensee” means a health carrier subject to licensure by the Bureau of Insurance and to quality assurance certification by the department under Title 38.2 of the Code of Virginia who is responsible for a managed care health insurance plan in accordance with Chapter 58 (§ 38.2-5800 et seq.) of Title 38.2 of the Code of Virginia.

“Managed care plan” means a health benefit plan, as defined in § 38.2-3407.10:1 of the Code of Virginia, that requires a covered person to use, or creates incentives, including financial incentives, for a covered person to use health care providers managed, owned, under contract with, or employed by the MCHIP licensee.

“Material” means that which has an effective influence or bearing on, or is pertinent to, the issue in question.

“Medical necessity” or “medically necessary” means appropriate and necessary health care services which are rendered for any condition which, according to generally accepted principles of good medical practice, requires the diagnosis or direct care and treatment of an illness, injury, or pregnancy-related condition, and are not provided only as a convenience.

“Nationally recognized accrediting body” means an organization that sets national standards specifically governing healthcare quality assurance processes, utilization review, provider credentialing, as well as other areas covered by this chapter and provides accreditation to managed care health insurance plans pursuant to national standards. The following entities shall be considered nationally recognized accrediting bodies:

1. The American Accreditation HealthCare Commission/URAC;

2. The National Committee for Quality Assurance (NCQA);

3. The Joint Commission on Accreditation of Healthcare Organizations, (JCAHO); and

4. Other nationally recognized accrediting bodies with national standards as described above that are accepted by the department.

“Network” means a group of providers as defined in § 38.2-3438 of the Code of Virginia.

“New provider applicant” means a provider that has submitted a completed credentialing application to an MCHIP licensee.

“Participating provider” means a provider that is managed, under contract with, or employed by an MCHIP licensee and who has agreed to provide health care services to covered persons with an expectation of receiving payments, other than coinsurance, copayments, or deductibles, directly or indirectly from the MCHIP licensee.

“Person” means any individual, aggregate of individuals, association, business, company, corporation, joint-stock company, Lloyds type of organization, other organization, partnership, receiver, reciprocal or inter-insurance exchange, trustee or society.

“Plan of correction” means an MCHIP’S written plan that outlines the action the MCHIP will take to address compliance issues identified during an administrative review or on-site examination conducted by the department.

“Preferred provider organization” or “PPO” means an arrangement in which a health carrier, as defined in § 38.2-5800 of the Code of Virginia, undertakes to provide, arrange for, pay for, or reimburse any of the costs of health care services, on an insured basis, which creates incentives, including financial incentives, for a covered person to use health care providers directly or indirectly managed, owned, under contract with, or employed by the health carrier, but shall not include a health maintenance organization as defined in § 38.2-4300 of the Code of Virginia.

“Quality assurance program” means the systems, standards and processes including, but not limited to, reasonable and adequate systems to assess, measure, and improve the health status of covered persons, necessary to obtain a certificate of quality assurance from the department in accordance with this chapter and in accordance with § 32.1-137.2 C of the Code of Virginia.

“Service area” means a geographic area as defined in § 38.2-5800 of the Code of Virginia.

“Timely” means the provision of services so as not to impair or jeopardize the integrity of the covered persons’ diagnosis or outcomes of illness.

“Treating health care provider” means a licensed health care provider who renders or proposes to render health care services to a covered person.

“Utilization review” means a system for reviewing the necessity, appropriateness, and efficiency of hospital, medical or other health care services rendered or proposed to be rendered to a patient or group of patients for the purpose of determining whether such services should be covered or provided by an insurer, health services plan, managed care health insurance plan licensee, or other entity or person. For purposes of this chapter, “utilization review” shall include, but not be limited to, preadmission, concurrent and retrospective medical necessity determination, and review related to the appropriateness of the site at which services were or are to be delivered. “Utilization review” shall not include (i) review of issues concerning insurance contract coverage or contractual restrictions on facilities to be used for the provision of services, (ii) any review of patient information by an employee of or consultant to any licensed hospital for patients of such hospital, or (iii) any determination by an insurer as to the reasonableness and necessity of services for the treatment and care of an injury suffered by an insured for which reimbursement is claimed under a contract of insurance covering any classes of insurance defined in §§ 38.2-117through 38.2-119, 38.2-124 through 38.2-126, 38.2-130 through 38.2-132 and 38.2-134 of the Code of Virginia.

“Utilization review entity” means a person or entity performing utilization review.

“Utilization review plan” means a written procedure for performing a utilization review.

See https://law.lis.virginia.gov/admincode/title12/agency5/chapter408/