Bulletin 1995-6

TO: All Companies Authorized to Transact Accident and Health Insurance Business in Kansas

FROM: Kathleen Sebelius
Commissioner of Insurance
SUBJECT: Utilization Review Organization Certification Requirements Bulletin 1995-4

DATE: March 28, 1995

The purpose of this bulletin is to provide clarification to Bulletin 1995-4 as to which entities are required to obtain a certificate to perform utilization review services in Kansas or affecting Kansas residents. Additionally, we will address other questions and concerns that have been raised regarding the utilization review organization act.

Utilization review is defined in K.S.A. 1994 Supp. 40-22a03(b) as "the evaluation of the necessity, appropriateness and efficiency of the use of health care services, procedures and facilities." If your company conducts utilization review as defined above, it may be subject to the utilization review organization act (K.S.A. 1994 Supp. 40-22a01, et seq.).

We have received several inquiries about K.S.A. 1994 Supp. 40-22a05(e)(2). Upon further review, we have determined that this statute does not exempt insurance companies, health maintenance organizations, pre-paid service plans, group-funded self-insured plans or similar entities which perform utilization review services as defined in K.S.A. 1994 Supp. 40-22a03(b) in connection with an insurance policy, agreement or contract from the requirements of this act. For the purposes of this act, utilization review services are not part of the normal claim settlement process. Therefore, entities which conduct utilization reviews for its own insureds, members or enrollees are required to obtain a certificate from the insurance department in order to conduct utilization review services in Kansas or affecting Kansas residents on and after May 1, 1995.

In addition, since the regulations were developed to encompass all types of health services, organizations which conduct utilization review activities relating to mental health, chemical dependency, chiropractic, optometric, podiatric, dental or any other health service or services are required to obtain a certificate from the commissioner of insurance.

If your company is URAC accredited, but your URAC certificate is expired, you must contact URAC at (202) 296-0120 in order to obtain a letter stating that you are still considered URAC accredited. You must submit the letter and the completed application to this department in order to waive the filing requirements set forth in K.S.A. 1994 Supp. 40-22a04(b)(2), (3), (4), (5), (6) and K.S.A. 1994 Supp. 40-22a04(c). In addition, you must also forward a copy of your certificate demonstrating re-accreditation once it is received from URAC.

If your company is subject to the utilization review organization act and you have not already requested an application, it is imperative that you immediately contact this department in writing to request an application for a utilization review certificate. The request should be directed to the Accident and Health Division of the Kansas Insurance Department, 420 SW 9^th Street, Topeka, Kansas 66612. Or, you may fax the request to the attention of Sallee Smith at (913) 296-2283. The request must include the name of your company, address, telephone number and contact person. Upon receipt of the written request, this department will send a formal application, a copy of K.S.A. 1994 Supp. 40-22a01, et seq. and a copy of the draft regulations. In order to perform utilization review activities in Kansas or affecting Kansas residents on and after May 1, 1995, your company must be issued a certificate by this department. The completed application must be submitted as soon as possible in order for our staff to complete its review and to obtain any additional information which may be needed in order to issue a utilization review organization certificate.

If you have any questions concerning this bulletin, please contact Sallee Smith at (913) 296-7850.

Bulletin 1995-6
March 28, 1995

____________________
Kathleen Sebelius
KS:llah
5215