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REGS : 10.09.86 Maryland Medicaid Managed Care Program: Independent Review Organization (IRO)(MEDICAL CARE PROGRAMS)


 Content Editor

Maryland Register
Issue Date:  October 18, 2013
Volume 40 • Issue 21 • Page 1830-1832
Title 10
10.09.86 Maryland Medicaid Managed Care Program: Independent Review Organization (IRO)
Authority: Health-General Article, §§2-104(b) and 15-103(b), Annotated Code of Maryland
Notice of Proposed Action
The Secretary of Health and Mental Hygiene proposes to adopt new Regulations .01—.08 under a new chapter, COMAR 10.09.86 Maryland Medicaid Managed Care Program: Independent Review Organization (IRO).
Statement of Purpose
The purpose of this action is to establish an independent review process for adjudicating disputes between providers and managed care organizations regarding denials of providers’ claims for reimbursement for MCO covered services on grounds that the services were not medically necessary.
Comparison to Federal Standards
There is no corresponding federal standard to this proposed action.
Estimate of Economic Impact
I. Summary of Economic Impact. The funds to implement this chapter will come from either the managed care organization or providers, whichever party receives an adverse appeal decision from the Contractor. The Contractor will be responsible for the operational details of the contract. Agency monitoring is expected to be minimal. No other government agencies will be affected.
Revenue (R+/R-)
II. Types of Economic Impact.
Expenditure (E+/E-)

A. On issuing agency:
B. On other State agencies:
C. On local governments:
Benefit (+)
Cost (-)

D. On regulated industries or trade groups:
Managed care organizations or providers
E. On other industries or trade groups:
(1) Contractors
(2) Contractors
F. Direct and indirect effects on public:
III. Assumptions. (Identified by Impact Letter and Number from Section II.)
D. and E(1). Either the MCO or provider will receive an adverse determination from the IRO that party will be responsible for paying the IRO the case review charge established by the Department; however there is no way to determine how many determinations will be made for or against an MCO or a provider and therefore the magnitude is indeterminable.
E(2). The Contractor will be responsible for the operational details of the contract; however because it cannot be determined how many complaints will be received, the cost is indeterminable.
Economic Impact on Small Businesses
The proposed action has minimal or no economic impact on small businesses.
Impact on Individuals with Disabilities
The proposed action has no impact on individuals with disabilities.
Opportunity for Public Comment
Comments may be sent to Michele A. Phinney, Director, Office of Regulation and Policy Coordination, Department of Health and Mental Hygiene, 201 West Preston Street, Room 512, Baltimore, MD 21201, or call 410-767-6499 (TTY 800-735-2258), or email to, or fax to 410-767-6483. Comments will be accepted through November 18, 2013. A public hearing has not been scheduled.
.01 Scope and Purpose.
This chapter provides for a complaint resolution process for disputes between managed care organizations (MCOs) and providers regarding adverse medical necessity decision made by MCOs. Pursuant to this chapter, providers that receive an adverse medical necessity decision on claims for reimbursement may submit the adverse decision for review by an Independent Review Organization (IRO) designated by the Department.
.02 Definitions.
A. In this chapter, the following terms have the meanings indicated.
B. Terms Defined.
(1) "Adverse decision" means a review determination by a managed care organization that a health care service for which a provider seeks reimbursement is not medically necessary.
(2) "Affiliate" means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.
(3) “Case record” means documentation submitted to an independent review organization consisting of:
(a) A claim and only the supporting documentation, including medical records, originally submitted to a managed care organization by a provider prior to the managed care organization’s adverse decision on the claim;
(b) The managed care organization’s adverse decision; and
(c) The managed care organization’s written rationale for the adverse decision.
(4) “Claim” means a clean claim as defined in COMAR
(5) "Complaint" means an appeal of an adverse decision filed with the independent review organization.
(6) “Department” means the Maryland Department of Health and Mental Hygiene.
(7) "Expert reviewer" means a physician or other appropriate health care provider who contracts with the independent review organization to conduct a review of a managed care organization’s adverse decision.
(8) "Health care service" means a health or medical care procedure or service rendered by a provider including:
(a) Testing, diagnosis, or treatment of a human disease or dysfunction;
(b) Dispensing of drugs, medical devices, medical appliances, or medical goods for the treatment of a human disease or dysfunction; or
(c) Any other care, service, or treatment of disease or injury, the correction of defects, or the maintenance of the physical and mental well-being of human beings.
(9) "Independent review organization" means an entity that contracts with the Department to conduct independent review of managed care organizations’ adverse decisions.
(10) “Managed care organization (MCO)” has the meaning stated in Health-General Article, §15-101, Annotated Code of Maryland.
(11) “Medicaid” means the program administered by the State under Title XIX of the Social Security Act, which provides comprehensive medical and other health-related care for persons.
(12) "Medical record" has the meaning stated in Health-General Article, §4-301, Annotated Code of Maryland.
(13) “Medically necessary” means a health care service that is:
(a) Directly related to diagnostic, preventive, curative, palliative, rehabilitative, or ameliorative treatment of an illness, injury, disability, or health condition;
(b) Consistent with currently accepted standards of good medical practice;
(c) The most cost-efficient service that can be provided without sacrificing effectiveness or access to care; and
(d) Not primarily for the convenience of the consumer, the consumer's family, or the provider.
(14) “Provider” means any individual or entity that has a valid provider agreement with a Medicaid managed care organization or is a nonparticipating provider rendering covered Medicaid services to the managed care organization’s enrollees.
.03 Use of Independent Review Organizations.
A. The Department shall procure the services of an IRO to make determinations of medical necessity on provider complaints regarding adverse decisions.
B. An IRO that contracts with the Department shall assure, in accordance with its contract with the Department, the:
(1) Timeliness and quality of the reviews;
(2) Qualifications and independence of the IRO and expert reviewers; and
(3) Confidentiality of medical records and review materials, consistent with federal and State laws.
C. An IRO designated by the Department shall have the authority to conduct the following functions:
(1) Obtaining all case information relative to the complaint from the MCO pursuant to time frames established by the Department;
(2) Assigning an expert reviewer for review of an adverse decision;
(3) Performing conflicts checks relative to the independent review organization and the expert reviewer assigned to review the adverse decision;
(4) Communicating procedural rules, as approved by the Department, and other information regarding appeals to the parties;
(5) Rendering a timely final decision in accordance with Regulation .06F of this chapter.
.04 Conflicts of Interest Standards for Independent Review Organizations and Expert Reviewers.
A. An IRO or expert reviewer may not be an affiliate or have a financial, familial or professional relationship with any facility, provider, or organization that has filed a complaint.
B. Upon request by the Department, the IRO shall provide to the Department information demonstrating compliance with the requirement in §A of this regulation.
.05 Assignment of an Expert Reviewer.
A. The IRO shall ensure that an expert reviewer:
(1) Has appropriate clinical expertise in the treatment of the specific medical condition being reviewed and holds a nonrestricted license as a health care provider in the United States; and
(2) Has no history of disciplinary investigations, actions, or sanctions, including loss of staff privileges or participation restrictions that have been taken or are pending by any hospital, governmental agency or unit, or regulatory body.
B. Upon request by the Department, the independent review organization shall provide to the Department information demonstrating compliance with the requirements in §A of this regulation.
.06 Independent Review.
A. A provider shall exhaust an MCO’s provider appeal process before filing a complaint with the IRO.
B. A provider shall file a complaint with the IRO in the form provided by the IRO not later than 30 calendar days following the date of an MCO’s adverse decision.
C. A review of an adverse decision shall be based on the case record.
D. The IRO shall, after reviewing the case record, issue a final decision as to whether the health care services that are the subject of the complaint were medically necessary.
E. The final decision shall state in writing the factual bases for the decision of the expert reviewer and reference the criteria and standards on which the expert reviewer's decision was based.
F. Final decisions shall be rendered within 45 days of submission of the case record, unless the time period is extended by the Department.
.07 Payment of Fees and Sanctions.
A. In the event that a provider’s complaint is unsuccessful, the provider is responsible for paying to the IRO the case review charge established by the Department.
B. The case review charge established by the Department shall be based on the contract between the Department and the IRO arrived at through a competitive procurement process.
C. An MCO that is determined by the IRO to have improperly denied, either in whole or in part, a provider’s claim on medical necessity grounds is subject to the following:
(1) Within 60 calendar days of the date of an adverse decision by an IRO, the MCO shall fully reimburse the provider for claims determined to be medically necessary by the IRO, including any interest owed under Health Insurance Article, §15-1005(f), Annotated Code of Maryland; and
(2) Within 60 calendar days of the date of invoice by the IRO, the MCO shall reimburse the IRO the case review charge established by the Department.
D. In the event that the unsuccessful party does not pay the IRO within 60 calendar days of the date of the invoice, the Department shall impose penalties as follows:
(1) First delinquency: 17 percent of the invoice amount;
(2) Second delinquency: 35 percent of the invoice amount; and
(3) Third delinquency: 50 percent of the invoice amount plus:
(a) For providers, suspension from using the independent case review services for 1 year; or
(b) For MCOs, any sanction set forth in COMAR—(5), as determined by the Department.
.08 Appeal.
A. As a prerequisite for participating in the IRO complaint adjudication process, a provider waives all other administrative and judicial appeal rights and accepts the IRO’s decision as final and binding.
B. An MCO that receives an adverse decision from an independent review organization may file an appeal in accordance with COMAR
Secretary of Health and Mental Hygiene