STATE CORPORATION COMMISSION

Bureau of Insurance

July 14, 2011

Administrative Letter 2011-05

To: All Insurers Licensed to Write Accident and Sickness Insurance, Health Maintenance Organizations, Health Services Plans, Dental and Optometric Services Plans, and Dental Plan Organizations

Re: Internal Appeal of Adverse Benefit Determinations and External Review of Adverse Determinations

The purpose of this administrative letter is to provide a summary of the new internal appeals and external review process under Virginia law, and to provide guidance for the submission of form filings and complaint system filings revised to comply with these new requirements.

Chapter 788 (House Bill 1928) of the Acts of Assembly, effective July 1, 2011, enacts a new chapter within the Code of Virginia (the Law) that requires a health carrier to establish an internal appeals process and adds requirements for external review consistent with the requirements set forth in the federal Patient Protection and Affordable Care Act (PPACA). The provisions of the bill expire on July 1, 2014. Additionally, 14 VAC 5-216-10 et seq., the Rules Governing Internal Appeal and External Review (the Rules), details internal appeal requirements and further defines external review provisions. The Law and Rules extend to adverse benefit determinations and adverse determinations made on or after July 1, 2011 and are applicable to all plans offered by health carriers except those specifically excluded in Virginia Code § 38.2-3557 and 14 VAC 5-216-10, regardless of whether or not the health benefit plan is grandfathered.

This letter highlights substantive requirements under the new provisions of the Law and Rules, but should not be relied on solely. A checklist that outlines the requirements of the internal appeals process, notice requirements, and new reporting requirements, as well as flowcharts that describe the internal appeal and external review processes and timeframes can be found on the Bureau's website at:  http://www.scc.virginia.gov/boi/co/index.aspx.

Complaint System Filings

Code of Virginia § 38.2-5804 requires all Managed Care Health Insurance Plans (MCHIPs) to file their complaint systems with the State Corporation Commission and the State Health Commissioner. In order to expedite and facilitate the review and approval of MCHIP complaint and appeal procedure filings, the Bureau encourages MCHIPs to complete and return the checklist with any filing of its new or revised complaint and appeals process, indicating the appropriate document and page number where the required provision can be found.

Internal Appeals Requirements

For all adverse benefit determinations, as defined in the Rules, including rescissions and contractual denials, health carriers shall:

· Make available an internal appeals process.

· Provide instructions for filing available internal standard or urgent care appeals with each issuance of an adverse benefit determination, to include contact information to file an internal appeal, and certain contact information for the Bureau, or Office of the Managed Care Ombudsman if the health carrier is an MCHIP.

· Provide reasons for the denial and specific plan provisions used in the determination.

· Ensure a full and fair review of the denial.

· Make available an expedited internal appeals process for urgent care appeals, as defined in the Rules.

In the case of an adverse determination, initial or otherwise, that is based on medical necessity, appropriateness, healthcare setting, level of care, or effectiveness, and adverse determinations related to services determined to be experimental/investigational in nature, the health carrier shall provide in a written notice the circumstances when a person may be eligible for external review, as required by the Code of Virginia § 38.2-3559. In addition, the notice of an adverse determination shall include the health carrier's website and telephone number at which the person may obtain the forms necessary to request an external review. In the case of a final adverse determination, the health carrier must provide the forms needed to request an independent standard or expedited external review and the required disclosure about the person's external review rights. 

Additional Provisions for Internal Appeals

· Health carriers may offer a two-level internal appeal process for group plans only. A one-level internal appeal process is required for individual plans.

· New timeframes are required for submission of internal appeals and the health carrier's response to standard and expedited internal appeals.

· Before the health carrier can make a final adverse benefit determination that relies on any new or additional evidence generated directly or indirectly by the health carrier, the health carrier must provide this information free of charge to the covered person sufficiently in advance of the final adverse determination deadline. The covered person must have a reasonable opportunity to respond to the new information prior to the deadline.

· Benefit determinations on an urgent care appeal must be transmitted between the health carrier and the covered person by the most expeditious method available to include telephone and facsimile.

· Concurrent review can mean utilization review conducted not just during a patient's stay in a facility, but during a course of treatment in an outpatient health care setting.  The health carrier must provide continued coverage pending the outcome of any internal appeal of a concurrent review decision.

· If a health carrier reduces or terminates an approved course of treatment or number of treatments, the health carrier must notify the covered person sufficiently in advance of such reduction or termination to allow the person time to file an internal appeal and obtain a determination before the benefit is reduced or terminated. 

External Review Changes

· External review (ER) will no longer be limited to MCHIPs, Final Adverse Decisions (FADs) or Virginia contracts; ER will be available for review of adverse determinations and final adverse determinations rendered by health carriers licensed in Virginia.

· A covered person may elect to be represented by an authorized representative for ER.

· A covered person must exhaust the internal appeal process before requesting ER except as noted below:

o Adverse determinations based on a determination that services are experimental/investigational may be expedited with written certification by the treating physician that services would be less effective if not initiated promptly.

o Expedited ER for medical necessity, appropriateness, healthcare setting, level of care, or effectiveness denials may be requested simultaneously with an expedited internal review; the Independent Review Organization (IRO) will review and determine if internal appeal should be completed prior to ER.

o Failure by the health carrier to render a standard internal appeal determination within 30 or 60 days and the covered person has not requested or agreed to a delay.

o Health carrier may waive the exhaustion requirement.

· The Commissioner of Insurance will no longer render an order; instead, the decision that results from the review by the IRO is final and binding on the health carrier and the covered person (except to the extent that the covered person has remedies available under federal or state law). The IRO will communicate its decision to the covered person, the health carrier and the Bureau.

· ER will include different processes for various situations to include:

o Standard ER of medical necessity

o Expedited ER of medical necessity

o Standard ER of experimental/investiga-tional

o Expedited ER of experimental/investiga-tional

· Written certification by a physician will be required in order to qualify for an expedited ER and for an experimental/investigational ER.

· ER for experimental/investigational review will be conducted by a panel of physicians; process provides for a "tie breaker," if needed.

· Time for the covered person to file a request for ER is increased from 30 days from the date of the decision to 120 days from the date of receipt of a notice of the right to an ER.

· Total timeframes for the review processes are similar to the previous process with the exception of the time provided for parties to provide documentation (5 days for a standard appeal, rather than 20 days).

· Medical record documentation shall be provided directly to the IRO rather than to the Bureau.

· IRO is required to forward information received from the covered person to the health carrier for reconsideration, which shall not delay the ER.

· If the health carrier's reconsideration results in reversal, the health carrier shall notify the Bureau, the covered person and the IRO in writing of its decision; ER will be terminated by IRO upon receipt of such notification.

· At the completion of an ER, the IRO shall inform the covered person, the health carrier and the Bureau of its decision to uphold or reverse the adverse determination or final adverse determination.

· There is no longer a filing fee (previously $50.00).

· There is no longer a minimum cost of denied services threshold (previously the minimum was $300.00).

· The cost of the ER will be paid by the health carrier to the IRO in all cases.

· Each health carrier and each IRO shall maintain records of ER and make an annual report to the Bureau.

· Health carriers must meet disclosure requirements relating to ER including informing covered persons of ER procedures, providing covered persons with Bureau contact information and informing covered persons of the requirement to authorize release of medical records for the purpose of ER.

· Self-insured employee welfare benefit plans whose plan sponsor's headquarters is located in Virginia may "opt-in" to participate in the ER process.

The Role of the Bureau of Insurance

· The Bureau's duties:

1. Oversight of determinations of ineligibility.

2. Assign eligible requests to a qualified and approved IRO on a random basis, taking into consideration the nature of the health care services which are the subject of the ER.

3. Approve IROs based on required minimum qualifications including full Utilization Review Accreditation Commission (URAC) accreditation; the Bureau shall reapprove qualified IROs every two years unless the Bureau determines that the IRO is not meeting minimum qualifications or if the IRO's decisions are consistently unclear or incomplete.

4. Maintain list of approved IROs.

5. Track annual reports received from the IROs and health carriers.

6. Assist covered persons with filing an ER request.

· After receiving a request for ER, the Bureau shall forward the request to the health carrier for review of eligibility; the health carrier shall inform the Bureau and the covered person of eligibility and in the case of ineligibility, the right to an appeal of that determination by the Bureau.

· Bureau will no longer contract with IROs and will therefore no longer reimburse or bill for IRO services.

A copy of the revised Rules and the required forms are available on the following website at: http://leg1.state.va.us/000/reg/TOC14005.HTM.HTM#C0216.

Form and Complaint System Filings

The Bureau recognizes that carriers have had little time to modify forms and procedures to address the new requirements for internal and external appeals. In consideration of this short time-frame, and in accordance with Virginia Code § 38.2-316 I, the Bureau will temporarily exempt forms developed or modified exclusively to effect compliance with the Law and Rules from the approval requirements of § 38.2-316 until January 1, 2012. The exemption will only apply to endorsements, amendments, and riders to be attached to previously approved contracts, and to explanation of benefit forms, submitted specifically to adhere to the requirements of the Law and Rules. It should be noted that this temporary exemption extends only to the approval requirements that would otherwise apply under § 38.2-316 and does not extend to processes or procedures that carriers must implement to comply with the Law and Rules.

Similarly, the Bureau will provide carriers with an extension through January 1, 2012 to secure approval of their complaint system filings as required pursuant to § 38.2-5804. Again, however, this extension applies to the filings themselves and not to the implementation of appropriate processes and procedures to effect compliance with the Law and Rules.

It should also be noted that most MCHIPs with stand-alone dental and vision products will be required to establish a revised complaint and appeals process with revised forms and notices since these types of products should no longer include provisions for an external appeal process available through the Bureau of Insurance.

Any and all forms or MCHIP complaint procedures revised or modified to address the requirements identified in the Law and the Rules, including, but not limited to new or revised endorsements, amendments, riders and explanations of benefit forms, and MCHIP complaint system filings must be filed with and approved by the Bureau on or before January 1, 2012. Although the Bureau is providing this delayed period for form filings and MCHIP complaint system filings, full compliance with the processes and procedures of the new Law and Rules is required and expected on and after July 1, 2011.

This temporary exemption will not be employed with respect to any particular filing unless and until it is specifically requested by the submitting health carrier or MCHIP in accordance with this letter, and the following information is included. The Bureau will screen submissions as they are received and will reject the exemption request if one or more of the required items below are not included.

1. A statement that any and all forms or procedures included in the submission include provisions specifically drafted to address the requirements of the Law and Rules.

2. If an amendment, endorsement, or rider is submitted, an identification of any and all contracts or policies to which the amendment, endorsement or rider will apply and the corresponding approval date(s) of such contracts or policies in Virginia.

3. A red-lined identification of all Law and Rule related changes to the forms or procedures.

4. A Certification from an officer of the health carrier or MCHIP stating:

(a) The forms or procedures included in the submission were developed and drafted to address the requirements of the Law and Rules; and

(b) The carrier or MCHIP understands and agrees that the exemption applied to this submission is temporary and that forms or procedures included in the submission remain subject to review in accordance with applicable Virginia laws and regulations. Form(s) may not be issued or issued for delivery in Virginia after the expiration of the temporary exemption period if the form(s) have not been approved by the Bureau prior to January 1, 2012. MCHIPs must have a complaint system filing approved by the Bureau on or before January 1, 2012. The carrier or MCHIP will be responsible to make corrective actions necessary as a result of the Bureau's review, including, but not limited to amending noncompliant form language or procedures.

Please refer any questions regarding this matter to Julie Blauvelt, Senior Insurance Market Examiner, Bureau of Insurance, Life and Health Division, P. O. Box 1157, Richmond, VA 23218, telephone (804) 371-9865, FAX (804) 371-9944, or email julie.blauvelt@scc.virginia.gov.

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

DEPARTMENT OF ENVIRONMENTAL QUALITY

Revised Notice of Bacteria TMDL Modification of Assamoosick Swamp and Tributaries in Sussex and Southampton Counties, Virginia

The Department of Environmental Quality (DEQ) seeks public comment from interested persons on proposed minor modifications of the total maximum daily load (TMDL) developed for the watershed.

A TMDL of E. coli was developed to address the bacterial impairments in Assamoosick Swamp and Tributaries in Sussex and Southampton Counties, Virginia and was approved by the Environmental Protection Agency on June 3, 2010. The report is available athttp://www.deq. virginia.gov/tmdl/apptmdls/chowanrvr/assamoosickec.pdf. DEQ seeks written comments from interested persons on the following three proposed modifications for the TMDL:

1. DEQ proposes to revise the Black Swamp Regional Wastewater Treatment Plant (WWTP) (VA0088978) annual individual waste load allocation (WLA), annual future growth load, and annual total WLA. The  original annual individual WLA was calculated as 1.01E+12 E.coli (cfu/yr) based on the maximum design flow of the facility of 0.60 million gallons per day (MGD) at the E.coli standard of 126 colony forming units (cfu) per 100 milliliters (ml) monthly geometric mean. The annual future growth was calculated as 5 times this number as 5.04E+12 E.coli (cfu/yr) and the annual total WLA (individual WLA plus future growth) was 6.05E+12 E.coli (cfu/yr).  DEQ discovered a miscalculation within the annual individual WLA and proposes to revise the value to 1.04E+12 E.coli (cfu/yr), the annual future growth value to 5.22E+12 E.coli (cfu/yr), and the annual total WLA to 6.27E+12 E.coli (cfu/yr).

2. To accommodate the modification in 1, DEQ proposes to revise the annual load allocation (LA) for the Assamoosick and Tributaries TMDL from 4.38E+13 E.coli (cfu/yr) to 4.36E+13 E.coli (cfu/yr).

3. DEQ proposes to revise the Black Swamp Regional Wastewater Treatment Plant (WWTP) (VA0088978) daily individual waste load allocation (WLA), daily future growth load, and daily total WLA. The original daily individual WLA was calculated as 2.76E+09 E.coli (cfu/day) based on the maximum design flow of the facility of 0.60 million gallons per day (MGD) at the E.coli standard of 126 colony forming units (cfu) per 100 milliliters (ml) monthly geometric mean.  The daily future growth was calculated as 5 times this number as 1.38E+10 E.coli (cfu/day) and the daily total WLA (individual WLA plus future growth) was 1.66E+10 E.coli (cfu/day).  DEQ discovered a miscalculation within the daily individual WLA and proposes to revise the value to 2.86E+09 E.coli (cfu/day), the daily future growth value to 1.43E+10 E.coli (cfu/day), and the daily total WLA to 1.71 E.coli (cfu/day).  These changes will not require a modification of the daily LA value (which will remain 4.68E+12 E.coli (cfu/day)).

The proposed changes will neither cause nor contribute to the nonattainment of the Chowan River basin and equal to a <1% change of the TMDL and are merely a correction of errors discovered within the WLA calculations. The public comment period for these modifications will end on August 31, 2011. Please send comments to Margaret Smigo, Department of Environmental Quality, Piedmont Regional Office, 4969-A Cox Road, Glen Allen, VA 23060, by email at margaret.smigo@deq.virginia.gov, or by FAX (Attn: Margaret Smigo) at (804) 527-5106. Following the comment period, a modification letter and any comments received will be sent to EPA for final approval.

Initiation of a Water Quality Restoration Study (TMDL) for the James River and Tributaries Impaired for Bacteria in Henrico, Charles City, Prince George, and Surry Counties

Public meeting: Charles City County Government & School Board Administration Building Auditorium, 10900 Courthouse Road, Charles City, Virginia 23030. A public meeting will be held on Tuesday, August 2, 2011, at 6 p.m.

Purpose of notice: The Virginia Department of Environmental Quality (DEQ) and study consultant, MapTech Inc, are presenting preliminary data for the initiation of a total maximum daily load (TMDL) study to restore water quality at a public meeting, an opportunity for the public to share their knowledge of the watershed, and a public comment period following the meeting.

Meeting description: Public meeting on a study to restore water quality along the James River and Tributaries within Henrico, Charles City, Prince George, and Surry Counties. Meeting will feature information gathered for the watershed including land use, water quality monitoring, and suspected sources of bacteria. Those attending the meeting are invited to ask questions and to contribute their knowledge of the watershed.

Description of study: Virginia agencies have been working to identify sources of the bacterial contamination in the waters of the James River and its tributaries in the following impaired waterways:

These streams are impaired for failure to meet the primary contact (recreational or swimming) designated use because of bacteria standard violations. The study reports on the sources of bacterial contamination and recommends TMDLs for the impaired waters. A TMDL is the total amount of a pollutant a water body can contain and still meet water quality standards. To restore water quality, bacterial levels need to be reduced to the TMDL amount.

How a decision is made: The development of a TMDL includes two sets of public meetings and comment periods; one to initiate the study and another to present the final draft TMDL report. This meeting is the first for the James River and Tributaries project. After the final public meeting and all public comments have been considered and addressed, DEQ will submit the TMDL report to the U.S. Environmental Protection Agency and the State Water Control Board for approval.

How to comment: DEQ accepts written comments by email, fax, or postal mail. Written comments should include the name, address, and telephone number of the person commenting and be received by DEQ during the comment period, which will begin on Wednesday, August 3, 2011, and end on Thursday, September 1, 2011.

Contact for additional information: Margaret Smigo, TMDL Coordinator, Virginia Department of Environmental Quality, Piedmont Regional Office, 4949A Cox Road, Glen Allen, VA 23060, telephone (804) 527-5124, FAX (804) 527-5106, or          email margaret.smigo@deq.virginia.gov. DEQ TMDL website: www.deq.virginia.gov/tmdl.

VIRGINIA DEPARTMENT OF HEALTH

Drinking Water State Revolving Fund Program
Intended Use Plan for FY 2011

The Virginia Department of Health (VDH) received numerous funding requests and set-aside suggestions following the January 2010 announcement regarding funds available from the Drinking Water State Revolving Fund Program. Through the Safe Drinking Water Act, Congress authorizes capitalization grants to the states but authorization has not been finalized.

The VDH's Office of Drinking Water (ODW) has prepared a draft intended use plan (IUP) using information submitted via the funding requests and set-aside suggestions. This draft IUP is for review and comment by the public. The document entitled "Virginia Drinking Water State Revolving Fund Program Design Manual" (dated January 5, 2010) is a part of the IUP. This document was mailed in the January announcement and is available at: http://www.vdh.virginia.gov/drinkingwater/financial.

The VDH will hold a public meeting on Wednesday, September 21, 2011, from 9 a.m. to 11 a.m. at the Office of Drinking Water East Central Field Office, 300 Turner Road, Richmond, VA 23225. In addition, comments from the public are to be postmarked by Friday, September 30, 2011.

Those parties planning to attend may contact Theresa Hewlett at (804) 864-7501 by the close of business on Monday, September 19, 2011. Please direct your requests for information and forward written comments to: Steven D. Pellei, P. E., Virginia Department of Health, Office of Drinking Water, James Madison Building, Room 622, 109 Governor Street, Richmond, VA 23219, telephone (804) 864-7489, FAX (804) 864-7521.

BOARD OF LONG-TERM CARE ADMINISTRATORS

Notice of Periodic Review of Regulations

The Board of Long-Term Care Administrators within the Department of Health Professions is preparing to conduct a periodic review of its regulations for nursing home administrators:

18VAC95-20, Regulations Governing the Practice of Nursing Home Administrators

The purpose of the review is to determine whether the regulations should be terminated, amended for clarification or for consistency with changes in practice, or retained in their current form. The review of the regulations will be guided by the principles in Executive Order 14 (2011) (http://www.governor.virginia.gov/Issues/ExecutiveOrders/2010/EO-14.cfm) and § 2.2-4007.1 of the Code of Virginia (http://lis.virginia.gov/cgi-bin/legp604.exe?000+cod+2.2-4007.1).

Public comment is sought on the review of any issue relating to the regulations, including whether the regulations (i) are necessary for the protection of public health, safety, and welfare or for the economical performance of important governmental functions; (ii) minimize the economic impact on small businesses in a manner consistent with the stated objectives of applicable law; and (iii) are clearly written and easily understandable.

Comment Begins: August 1, 2011

Comment Ends:  September 1, 2011

If any member of the public would like to comment on these regulations, please send comments by the close of the comment period to Elaine J. Yeatts, Agency Regulatory Coordinator, Department of Health Professions, 9960 Mayland Drive, Suite 300, Richmond, VA 23233. Comments may also be e-mailed to elaine.yeatts@dhp.virginia.gov or faxed to (804) 527-4434.

Regulations for the Board of Long-Term Care Administrators may be viewed on-line at www.townhall.virginia.gov or www.dhp.virginia.gov or copies will be sent upon request.

DEPARTMENT OF REHABILITATIVE SERVICES

Small Business Impact Review for Regulations Adopted by the Department of Rehabilitative Services before July 1, 2005

The following regulations existed on July 1, 2005, and are required to be reviewed in accordance with § 2.2-4007.1 D of the Code of Virginia to determine whether they should be continued without change or be amended or repealed, consistent with the stated objectives of applicable law, to minimize the economic impact on small businesses:

22VAC30-20, Provision of Vocational Rehabilitation Services

As agency head, I have determined that completion of the required review has not been feasible and have extended the review time for one year. Prior to commencement of the review, the agency will publish a notice of the review and provide an opportunity for public comment as required by § 2.2-4007.1 of the Code of Virginia. The public comment period and review may be held in conjunction with a periodic review or a regulatory action.

/s/ James A. Rothrock
Commissioner
Department of Rehabilitative Services

Contact Information: Vanessa S. Rakestraw, Policy Analyst, 8004 Franklin Farms Drive, Richmond, VA 23229, telephone (804) 662-7612, FAX (804) 662-7663, TDD (800) 464-9950, or email vanessa.rakestraw@drs.virginia.gov.

Small Business Impact Review for Regulations Adopted between July 1, 2006 and July 1, 2010

The following regulations were adopted between July 1, 2006, and July 1, 2010, and are required to be reviewed in accordance with § 2.2-4007.1 D of the Code of Virginia to determine whether they should be continued without change or be amended or repealed, consistent with the stated objectives of applicable law, to minimize the economic impact on small businesses:

22VAC30-11, Public Participation Guidelines

22VAC30-30, Provision of Independent Living Rehabilitation Services

22VAC30-40, Protection of Participants in Human Research

22VAC30-50, Policies and Procedures for Administering Commonwealth Neurotrauma Initiative Trust Fund

As agency head, I have determined that completion of the required review has not been feasible and have extended the review time for one year. Prior to commencement of the review, the agency will publish a notice of the review and provide an opportunity for public comment as required by § 2.2-4007.1 of the Code of Virginia. The public comment period and review may be held in conjunction with a periodic review or a regulatory action.

/s/ James A. Rothrock
Commissioner
Department of Rehabilitative Services

Contact Information: Vanessa S. Rakestraw, Policy Analyst, 8004 Franklin Farms Drive, Richmond, VA 23229, telephone (804) 662-7612, FAX (804) 662-7663, TDD (800) 464-9950, or email vanessa.rakestraw@drs.virginia.gov.

ERRATA

STATE AIR POLLUTION CONTROL BOARD

Title of Regulation: 9VAC5-80. Permits for Stationary Sources (Rev. A-11).  

Publication:  27:23 VA.R. 2477-2506 July 18, 2011.

Correction to Final Regulation:

Page 2494, first column, 9VAC5-80-1765 F, line 14, strike "particulate matter" and insert "PM_2.5, PM₁₀"

VA.R. Doc. No. R11-2833; Filed July 18, 2011, 1:21  p.m.