State Law

Delaware Code-Title 18-Chapter 35-Subchapter V. Pre-Authorization Transparency

08/01/2023 Delaware Section 3581


Medical Necessity-Definition, Step Therapy Override, U.R. Criteria

See bold text below:

For purposes of this subchapter, the following definitions apply:

(1) “Adverse determination” means a benefit denial, reduction or termination, or determination that an admission or continued stay, or course of treatment, or other covered health service does not satisfy the insurance policy’s clinical requirements for appropriateness, necessity, health-care setting and/or level of care.

(2) “Clean pre-authorization” means when a submission is made to satisfy any pre-authorization in which the relevant data is provided as called for by the utilization review entity. Any request submitted by a provider or covered person that includes an unspecified, unclassified or miscellaneous code or data element to constitute a clean request shall also include appropriate supporting documentation or narrative which explains the unspecified, unclassified or miscellaneous code and describes the diagnosis and treatment rendered.

U.R. Criteria

(3) “Clinical criteria” means the written policies, written screening procedures, drug formularies or lists of covered drugs, determination rules, determination abstracts, clinical protocols, practice guidelines, medical protocols and any other criteria or rationale used by the utilization review entity to determine the necessity and appropriateness of health-care services.

(4) “Covered person” means an individual or family, or both, who has entered into a contractual arrangement, or on whose behalf a contractual arrangement has been entered into, with a carrier, pursuant to which the carrier provides health insurance for such person.

(5) “Electronic pre-authorization” [ePA] is a submission of information via a website, the Delaware Health Information Network, or other method via the Internet as delineated by regulation and as accepted by the utilization review entity. Electronic pre-authorization does not include any form of request that is transmitted to the utilization review entity through facsimile.

(6) “Emergency health-care services” means those services identified in §§ 3349 and 3565 of this title.

(7) “Health-care service” means any services or supplies included in the furnishing to any individual of medical care, or hospitalization or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any individual of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury, disability or disease.

Medical Necessity-Definition

(8) “Medically necessary” or “medical necessity” means providing of health-care services or products that a prudent physician would provide to a patient for the purpose of diagnosing or treating an illness, injury, disease or its symptoms in a manner that is all of the following:

a. In accordance with generally accepted standards of medical practice;

b. Consistent with the symptoms or treatment of the condition;

c. Not solely for anyone’s convenience; and

d. Not including investigational or experimental health-care services.

(9) “NCPDP SCRIPT standard” means the most recent standard adopted of the National Council for Prescription Drug Programs SCRIPT adopted by the United States Department of Health and Human Services. To fall within this definition, any version released subsequent to passage of this section must be compatible to the current version adopted by the United States Department of Health and Human Services.

(10) “Pre-authorization” means a requirement by a carrier or health-insurance plan that providers submit a treatment plan, service request, or other prior notification to the carrier for evaluation of appropriateness of the plan or if the service is medically necessary before treatment is rendered. Pre-authorization lets the insured and provider know in advance which procedures and pharmaceuticals are considered by the insurer to be medically necessary.

Step Therapy Override

(11) “Step therapy exception determination” means a determination as to whether a step therapy protocol should apply in a particular situation, or whether the step therapy protocol should be overridden in favor of immediate coverage of the health care provider’s selected prescription drug. This determination is based on a review of the request for an override, along with supporting rationale and documentation.

(12) “Step therapy protocol” means a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition and medically appropriate for a particular patient are covered by an insurer or health plan.

(13) “Utilization review entity” means an individual or entity which performs pre-authorization or step therapy protocol review for 1 or more of the following entities:

a. An employer with employees who are covered under a health-benefit plan or health-insurance policy or contract issued for delivery in this State or delivered in this State which does not fall under the Employee Retirement Income Security Act (ERISA) [29 U.S.C. § 1001 et seq.];

b. An insurer, health-benefit plan, or health-service corporation that writes health-insurance policies, performs pre-authorization, performs step therapy protocol review or an entity to which these capabilities have been delegated;

c. A preferred-provider organization, managed-care organization, or health-maintenance organization;

d. Any other individual or entity that provides, offers to provide, or administers hospital, outpatient, medical, or other health benefits to a person treated by a health-care provider in Delaware under a policy, plan, or contract;

e. This definition does not include accident-only, credit, dental, vision, long-term care or disability income insurance, coverage issued as a supplement to liability insurance, worker’s compensation or similar insurance or automobile medical payment insurance, or any coverage under state or federal governmental plans.