The purpose of this regulation is to implement and enforce the
provisions and statutory requirements contained in Act 311 of 1990 and to
establish applicable fees and standards for private review agents operating in
For the purposes of this regulation, the following terms are
A. "Appeal"--A request to
reconsider a determination not to certify an admission, procedure, extension of
stay or other health care service.
B. "Certificate"--Renewable certificate of
registration granted by the Commissioner to a private review agent, authorizing
the private review agent to perform utilization reviews in this State for two
years. This certificate is not transferable.
C. "Certification"--A determination by a
utilization review organization that an admission, extension of stay, or other
health care service has been reviewed and, based on the information provided,
meets the clinical requirements for medical necessity, appropriateness, level
of care or effectiveness under the applicable health benefit plan.
D. "Commissioner"--The Chief Insurance
Commissioner of South Carolina.
"Discharge Planning"--The process of assessing a patient's need for treatment
after hospitalization to facilitate the necessary services and resources for an
appropriate and timely discharge.
F. "Health Care Provider"--Any attending
health care provider, facility or practitioner, authorized under state or
federal law to bill for health care services rendered.
G. "Other Party Designated"--Any person or
entity designated by the insured to receive notice of certification or denials
thereof. This term shall presumptively include the primary attending health
care provider and any other affected health care provider of record.
"Private Review Agent"--A corporation,
partnership, association or any other entity performing utilization reviews.
All private review agents not hereinafter exempt must obtain a certificate.
1. The State of South Carolina or any South
Carolina business entity which uses its employees to perform utilization
reviews on behalf of its employees or any hospital which performs utilization
reviews is not required to obtain a certificate, unless the hospital is
performing those reviews for a fee for an entity which is not owned or
affiliated with the hospital.
Insurance companies, administrators of insurance benefit plans and health
maintenance organizations licensed and regulated by the Department which
perform utilization reviews are not required to obtain a certificate. However,
each of these entities must comply with Sections IV through XI of this
3. Private review
agents performing utilization reviews only for single-employer, self-insured
employee health benefit plans are not required to obtain a
4. Private review
agents performing utilization reviews only for health care services provided
pursuant to a federal law, which specifically preempts state regulation, are
not required to obtain a certificate.
I. "Utilization Criteria"--The written
policies, rules, medical protocols, or guides used by the private review agent
to review, grant or deny certification.
J. "Utilization Review"--A system for
reviewing the necessary, appropriate, and efficient allocation of health care
resources and services given or proposed to be given to a patient or group of
Certificate of Registration/Application Fee/Annual Registration Fee.
A. Before performing utilization reviews on
residents of this State, all private review agents not exempted by Section
II.G. of this regulation must obtain a certificate using the application
provided by the Commissioner. The application fee is $400.00. Any significant
change in utilization review criteria, program design, or service delivery must
be updated annually by not later than July 1. Every private review agent must
pay a biennial certificate fee of $800.00 by not later than July 1. If the
private review agent's certificate lapses for nonpayment of the biennial
certificate fee or if the certificate is terminated for any reason, then the
private review agent must refile the application along with the $400.00
application fee. Certificates will be renewed by the Commissioner biennially on
July 1 of even-numbered years.
The source of each private review agent's utilization criteria must be
reflected on the application for a certificate. Utilization criteria must be
periodically reviewed and revised as appropriate. Any significant change in the
source of a private review agent's utilization criteria must be disclosed
annually by no later than July 1.
Procedures for Utilization Review
Private review agents must
have written procedures to assure that utilization reviews are conducted in a
1. Private review agents must
make a certification determination within two working days of receipt of the
necessary information. Private review agents must make a certification
determination of an extended stay or additional service within one working day
of receipt of the additional information. Collection of the necessary
information may necessitate a discussion with the attending physician or, based
on the requirements of the health benefit plan, may involve a completed second
opinion review. Regardless, a certification determination must be made within
thirty days of receipt of the request.
2. Private review agents may review ongoing
inpatient stays, but must not routinely conduct daily review on all such stays.
The frequency of such reviews should vary based on the severity or complexity
of the patient's condition or on the necessary treatment and discharge planning
3. Private review agents
must establish a reasonable target review period for each admission. Except for
contractually required case management activities related to discharge planning
programs, private review agents may not contact a hospitalized patient until
the final day of the target period.
Private review agents must have in place
written procedures for providing notification of their determinations in
accordance with the following:
1. When a
determination is made to issue a certification, notification must be provided
immediately either by telephone or by telecopier facsimile transmission machine
to the person or entity who initiated the request, or to the patient, enrollee,
insured or other party designated. Notification of the certification must
thereafter be transmitted in writing to the person or entity who initiated the
request, or to the patient, enrollee, insured or other party designated within
two working days of the determination or request. The certification must
include the certified length of stay and the date of the next review. A written
confirmation of certification of an extended stay or additional service must
include the number of extended days, the next review date, the new total number
of days approved and the date of admission. All notifications of certification
must include the following or similar language: "This certification does not
guarantee payment of benefits under your insurance policy. That determination
can only be made by your insurer under the terms of your insurance
2. When a determination is
made to deny certification, notification must be provided immediately either by
telephone or by telecopier facsimile transmission machine to the person or
entity who initiated the request, or to the patient, enrollee, insured or other
party designated. Notification of the denial of certification must be
transmitted in writing to the person or entity who initiated the request, or to
the patient, enrollee, insured or other party designated within one working day
of the determination or request. The written notification must include the
principal reason(s) for the denial of certification and the procedure for
appealing the denial of certification.
Private review agents must have procedures
for appeals of denials of certification. The right to appeal must be available
to the the person or entity who initiated the request, or to the patient,
enrollee, insured or other party designated. The right to appeal must include
the right to request that the health care provider performing the review must
practice the same profession as the attending health care provider and the
right to request that the review be performed by a health care provider who did
not make the initial denial of certification. The appeal procedure may require
that an appeal be filed within a specified period from the denial of
certification. In no event may this period be less than sixty days from the
denial of certification.
a. Private review agents must establish
procedures for appeals to be made both in writing and by telephone.
b. Private review agents must notify in
writing the person or entity who initiated the request, or the patient,
enrollee, insured or other party designated of its determination on an appeal,
as soon as practical, but in no case later than thirty days after receiving all
information necessary to complete the appeal. If the appeal is denied, the
notification must contain justification for the denial. In extraordinary
circumstances, the thirty-day period to determine appeals may be extended for
not more than sixty days. Private review agents must maintain records
documenting the necessity for extending standard appeal determinations, which
must be made available to the Commissioner on demand.
When a determination to deny certification is made and the person
or entity who initiated the request, or the patient, enrollee, insured or or
other party designated believes that the determination warrants immediate
appeal, an opportunity to appeal that determination over the telephone on an
expedited basis must be afforded. A decision on an expedited appeal must be
communicated to the appellant by telephone within two working days of receipt
of all information necessary to complete the appeal. Private review agents must
have written procedures to assure reasonable access to their consulting health
care providers for such appeals. Expedited appeals which do not resolve a
difference of opinion may, at the option of the appellant, be resubmitted
through the standard appeal process.
Information Upon Which Utilization Review
A. When conducting utilization
reviews, private review agents must collect only the information necessary to
issue a certification.
review agents must not require health care providers to supply numerically
codified diagnoses or procedures as a condition for certification. Private
review agents may request such coding, since its inclusion may expedite
review agents must not require copies of medical records on all utilization
reviews as a matter of routine. Copies of pertinent medical records may be
required when a difficulty develops in certification or for retrospective
Private review agents may conduct retrospective reviews of
certifications only for purposes of internal quality assurance, procedural
compliance with the terms of the health benefit plan and auditing of the
appropriateness of health care services certified and provided. Once
certification is issued by a private review agent, then except for fraud
committed by patient, enrollee, insured, or health care provider, retrospective
review of that certification must not result in any additional cost to an
innocent patient, enrollee, insured, or health care provider. Except as
provided above, any errors in certification must be resolved between the
private review agent and the third-party payer.
A. Private review agents must conduct
utilization reviews and provide access to their utilization review staff by a
toll-free line at a minimum of forty hours per week, during normal business
hours, in the health care provider's local time zone, unless otherwise mutually
B. Private review agents
must provide sufficient telephone lines to ensure a reasonable response time to
inquiries. A reasonable response time is a telephonic queue time not exceeding
C. Private review
agents conducting on-site utilization reviews must verify their identity to the
health care provider and comply with health care provider protocols and
administrative procedures to minimize disruption of patient care or operations
of the health care provider.
Private review agents not exempted by Section II.G. must provide their South
Carolina certificate number upon request.
Staff and Program Qualifications.
1. Private review agents must have adequate
utilization review staff who are properly trained, qualified, and supervised by
appropriate health care providers, and supported by utilization
2. Health care providers
conducting utilization reviews must be licensed as health care providers by an
approved state licensing agency in the United States.
1. Utilization criteria must be established
under the direct supervision of a health care provider licensed in the same
profession and practicing in the same or a similar specialty as typically
manages the medical condition, procedure or treatment. A summary description of
the utilization criteria must be provided to the Commissioner on
2. Private review agents
must develop and use an internal ongoing written quality assessment program.
This written program must be made available to the Commissioner on
3. Private review agents
must maintain materials informing insureds or enrollees of the requirements for
certification. Those materials must include an overview of the rights and
responsibilities of insureds and enrollees, the telephone number and address of
the private review agent and a description of the appeals process. The private
review agent must either directly distribute these materials to the insured or
enrollee or provide them to the insurer or payer for distribution.
Private review agents must have written
procedures for assuring that patient-specific information obtained during
utilization reviews will be:
confidential in accordance with applicable federal and state laws;
2. Used solely for the purposes
of utilization reviews, internal quality assurance, discharge planning, case
management or claims payment.
B. Patient-specific information must be
disclosed to the Commissioner on demand, subject to an appropriate proprietary
agreement to ensure confidentiality.
C. Statistical data which does not provide
sufficient information to allow identification of individual patients is not
considered confidential for purposes of this regulation.
This regulation shall become effective ninety days after final
publication in the State Register.