Bill No.: SF0095 Drafter: IDS


LSO No.: 09LSO-0372 Effective Date: 7/1/2010

Section 4: 3/2/2009


Enrolled Act No.: SEA0035


Chapter No.: 104


Prime Sponsor: Senator Ross


Catch Title: Medical necessity review procedures.


Subject: Insurance.


Summary/Major Elements:

This act provides new procedures and standards for disability insurance policies and regulates the denial of insurance benefits based on a determination that a service or supply is not medically necessary. The act:

         Requires a specific definition of "medical necessity" in insurance contracts.

         Requires specific insurance policy language related to the procedures for obtaining a review of an insurance company's denial of claims.

         Establishes an internal review procedure, mandating that insurance companies make available an internal review of a decision not to extend insurance benefits.

         Sets standards for what information may be considered in conducting an internal review and the procedure for making internal review decisions.

         Establishes an external review procedure using an external review organization. The act details the procedures necessary for an insured to obtain an external review and specifies how the external review is conducted.

         Makes the decisions of the external review organization binding.

         Provides expedited internal and external reviews under specified circumstances.

         Provides authority for the insurance commissioner to promulgate rules concerning the qualifications of external review organizations, the standards for expedited reviews and other rules necessary to accomplish the purposes of the act.

         Declares that compliance with ERISA is deemed compliance with the act.

         Provides that failure to comply with the act is an unfair claims settlement practice.

         Applies only to policies issued, renewed, delivered or issued for delivery in this state after July 1, 2010.