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| Montana Administrative Register Notice 6-230 | No. 19 10/13/2017 | |
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BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE OFFICE OF THE MONTANA STATE AUDITOR
TO: All Concerned Persons
1. On July 21, 2017, the Commissioner of Securities and Insurance, Montana State Auditor published MAR Notice No. 6-230 pertaining to the public hearing on the proposed adoption of the above-stated rules at page 1069 of the 2017 Montana Administrative Register, Issue Number 14.
2. The commissioner has adopted the following rules as proposed: New Rule II (ARM 6.6.8602) and New Rule VIII (6.6.8608).
3. The commissioner has adopted the following rules, but with the following changes to the original proposal, stricken matter interlined, new matter underlined:
NEW RULE I (6.6.8601) PURPOSE AND SCOPE (1) remains as proposed. (2) The rules in this subchapter apply to disputes between: (a) health insurance issuers, as defined in 33-22-140, MCA, government health plans authorized in Title 2, chapter 18, part 7, MCA, or health plans established by the Montana university system authorized by Title 20, chapter 25, part 13, MCA; and (b) out-of-network air ambulance services, which are not owned or controlled by a Montana hospital system. (3) The rules in this subchapter do not apply to any disputes: (a) with self-funded health plans, unless they are expressly identified in (2); or (b) with air ambulance services owned or controlled by a Montana hospital system.
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-720, 20-25-1320, 33-2-2306, MCA
NEW RULE III (6.6.8603) CONFIDENTIALITY (1) The parties and independent reviewer shall maintain the confidentiality of all information protected under applicable law, including protected health information under the Health Insurance Portability and Accountability Act of 1996, trade secret information protected by Title 30, chapter 14, part 4, MCA, or personal information protected under Title 33, chapter 19, MCA. (2) The parties are entitled to discovery of any documents or information relevant to the determination of fair market value. However, the
AUTH: 2-18-720, 20-25-1320, 33-2-2306, 33-19-106, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, 33-19-306, MCA
NEW RULE IV (6.6.8604) NOTICE OF DISPUTE – CONTENT (1) (2) The notice must specify: (a) the parties to the dispute; (b) the date(s) of service; (c) through (3) remain as proposed. (4) Parties shall make reasonable efforts to jointly file the notice of dispute with the commissioner. If one party is uncooperative, a party may file the notice of dispute without the participation of the uncooperative party. In such a case, the filing party (5) The parties shall notify each other of the acceptable form of service before or at the time the notice of dispute is filed. If a party does not specify a form of service, service shall be effectuated by mail to the entity's registered agent, or if the entity does not have a registered agent in Montana, to the last known business address of the entity.
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
NEW RULE V (6.6.8605) INDEPENDENT REVIEWER SELECTION – SUBSTITUTION (1) through (3) remain as proposed. (4) A request under (2) must be made either within 10 calendar days after the commissioner notifies the parties of assignment of the independent reviewer or replacement independent reviewer, or within 10 calendar days of discovering new facts demonstrating that the reviewer has a conflict of interest. (5) In addition to the one request for a replacement independent review allowed by (3), a party may make a request to the commissioner to assign a different independent reviewer if a conflict of interest exists. If the commissioner has good cause to believe reassignment of the independent reviewer is necessary, the commissioner may grant the request. Any request for reassignment must follow the timing requirements in (4). (6) An independent reviewer may recuse himself or herself if an actual conflict of interest exists.
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-719, 2-18-720, 20-25-1319, 20-25-1320, 33-2-2305, 33-2-2306, MCA
NEW RULE VI (6.6.8606) PRELIMINARY CONFERENCE (1) Unless otherwise ordered by the independent reviewer or agreed to by the parties, within 30 days of appointment the independent reviewer shall hold a telephonic preliminary conference (2) During the preliminary (a) and (b) remain as proposed. (c) procedures for maintaining confidentiality of documents, information, or testimony; (d) through (g) remain as proposed. (3) The preliminary conference and any other communications or proceedings may only be conducted with the participation of all parties. Parties may not participate in any ex parte communications on the subject of the arbitration with an appointed independent reviewer.
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
NEW RULE VII (6.6.8607) DISCOVERY (1) Within 14 days after the preliminary (2) remains as proposed. (3) A party may request additional documentation from the other party that it reasonably believes to be relevant and material to (4) remains as proposed.
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
NEW RULE IX (6.6.8609) PREPARATION FOR HEARING (1) remains as proposed. (2) No less than 10 days prior to the adjudicatory hearing, each party shall submit a prehearing brief setting forth its
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
NEW RULE X (6.6.8610) HEARING (1) Unless otherwise requested by either party, all hearings during the independent dispute resolution process (2) Each party shall present evidence, which may include witness (3) remains as proposed.
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
NEW RULE XI (6.6.8611) NON-COMPLIANCE WITH ORDER (1) through (2)(b) remain as proposed. (c) a determination that the other party′s calculation accurately reflects the fair market price of the services provided; (d) if requested by the party not subject to the sanction, dismissal of the arbitration proceeding; and (d) remains as proposed, but is renumbered (e).
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
NEW RULE XII (6.6.8612) FINAL DETERMINATION (1) and (2) remain as proposed. (3) The final determination
AUTH: 2-18-720, 20-25-1320, 33-2-2306, MCA IMP: 2-18-718, 2-18-719, 2-18-720, 20-25-1318, 20-25-1319, 20-25-1320, 33-2-2304, 33-2-2305, 33-2-2306, MCA
4. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:
COMMENT No. 1: Two commenters requested an addition to New Rule I regarding the scope of this arbitration process. Specifically, both commenters wanted clarification on who the rules apply to. One commenter wanted clarification of the language "non-Montana hospital controlled out-of-network air ambulance service" in 33-2-2302, MCA. The other commenter stated that self-funded health plans should be subject to this arbitration process. In addition to these comments, the CSI received two emails from separate individuals asking whether self-funded health plans should be part of this process.
RESPONSE No. 1: Given these multiple requests for clarification, the CSI has added two subsections to New Rule I on the scope of these rules. The CSI believes that only those insurers, health plans, and air ambulance providers expressly identified in Senate Bill 44 may take part in this arbitration process.
COMMENT No. 2: One commenter requested revision to New Rule III, on confidentiality of information. The commenter noted that trade secret information should also be expressly protected. The commenter also suggested two additional paragraphs providing that parties are entitled to discovery of confidential information, and suggesting that independent reviewers enter protective orders so the parties will maintain the confidentiality of the information. The commenter also suggested that the CSI should enforce these confidentiality rules against breaching parties.
RESPONSE No. 2: The CSI agrees with the substance of this comment, and has made some changes to New Rule III. The CSI included an express reference to trade secret information, and included language that parties are entitled to discover information otherwise confidential. The CSI disagrees that it should enforce this rule on confidentiality, however. The independent reviewer can issue sanctions through New Rule XI, and the parties have standard legal remedies for any unlawful dissemination of confidential information.
COMMENT No. 3: One commenter requested additional language in New Rule IV to clarify when the parties notify each other of a potential dispute, and how that triggers the period of time to provide a notice of dispute to the CSI.
RESPONSE No. 3: The CSI agrees with the commenter, and has modified New Rule IV accordingly.
COMMENT No. 4: One commenter stated that notices of dispute under New Rule IV should be submitted within 90 days of payment by the insurer or health plan. The commenter argued that there should be a reasonable time limit for parties to file notices of dispute after one party believes a claim has been resolved.
RESPONSE No. 4: While the CSI agrees that notices typically should be filed within a reasonable time, the CSI disagrees with setting any outside bound or statute of limitations on notices of dispute. Because this arbitration process is non-binding and is mandatory before filing a lawsuit in district court, the CSI does not believe it should set a bar or limitation on this arbitration process that would then, in effect, be a bar on a party's statutory and constitutional right to file a lawsuit.
COMMENT No. 5: One commenter suggested language requiring that when notices of dispute are filed by one party under New Rule IV, that a copy of the notice should be served on the other party.
RESPONSE No. 5: The CSI agrees with the commenter, and has revised New Rule IV to provide for service of a notice of dispute on the other party, in the event the parties do not jointly file the notice. The CSI also modified the service language to first require service on a party's registered agent, if one exists.
COMMENT No. 6: One commenter suggested that in New Rule V the requirement for multiple disputes to be filed together should be changed. The commenter stated that multiple disputes would be more likely to create a conflict for a single independent reviewer, and those multiple cases might involve different issues.
RESPONSE No. 6: The commenter's point about conflicts is well-taken, but the CSI disagrees with modifying the rule. Conflicts of interest can be addressed after the notice of dispute has been filed and an independent reviewer has been assigned. Since this process is a non-binding but necessary step before filing legal action, the overarching goal of these rules is to establish as expedient and economical process as possible. The CSI believes that consolidating notices of dispute as much as possible helps to meet that goal. Finally, given the narrow issue this process is designed to resolve—what is a fair market price for an air ambulance service—it is unlikely that separate matters would have significantly differing issues involved.
COMMENT No. 7: Two commenters suggested removal of the one-time substitution of independent reviewers contained in New Rule V. One of those commenters noted that there are likely to be conflicts of interest with multiple reviewers, given the small population of this state, and suggested the rule provide for unlimited substitutions for conflicts of interest. The second commenter suggested additional rule language allowing for the commissioner to review requests for removal because of conflicts of interest. The second commenter also suggested language allowing for a request for removal within ten days of discovering new evidence of a potential conflict of interest for the independent reviewer.
RESPONSE No. 7: The CSI agrees with these comments, and has modified New Rule V to allow for multiple requests for substitution due to conflicts of interest. The CSI has also included language regarding the discovery of new evidence, and allowing for the commissioner to review additional requests for substitution. Finally, the CSI added language expressly allowing independent reviewers to recuse themselves if they believe a conflict exists.
COMMENT No. 8: One commenter requested the inclusion of language to New Rule V requiring that any time an independent reviewer is appointed by the CSI, the CSI will send the reviewer's curriculum vitae to the parties. The commenter stated that the purpose would be for the parties to identify potential conflicts of interest.
RESPONSE No. 8: The CSI disagrees that it should collect and send out such information every time an independent reviewer is selected. Given the limited number of potential participants in this arbitration process, providing a curriculum vitae would not be necessary in most instances. Also, the CSI believes a curriculum vitae would not identify many potential conflicts of interest. This does not preclude a party from requesting such information whenever they feel it is necessary.
COMMENT No. 9: One commenter requested that New Rule VI be changed from "preliminary hearing" to "preliminary conference" to avoid confusion with New Rule IX and New Rule X, which provide for an actual hearing.
RESPONSE No. 9: The CSI agrees with the commenter, and has changed New Rule VI accordingly.
COMMENT No. 10: One commenter suggested two additions to the list of topics that must be addressed at a preliminary conference under New Rule VI. The first requested addition was for "any anticipated discovery issues" and the second was for "any other matters[.]"
RESPONSE No. 10: The CSI disagrees that it is necessary to include those two additions to the express list of topics in New Rule VI. The list is not meant to be exhaustive, and those topics may be raised by any party in any conference, but they do not have to be.
COMMENT No. 11: One commenter stated that expert witnesses are not necessary to this arbitration process, and requested the removal of a reference to expert witnesses in New Rule VI. The commenter also suggested new language to New Rule VII prohibiting the use of expert witnesses.
RESPONSE No. 11: While the CSI agrees that expert witnesses typically should not be necessary in these arbitration proceedings, they could assist an independent reviewer with several factors related to fair market value of air transport services. As such, providing parties the option to use expert witnesses does comport with the legislative intent for this process. And while hiring an expert witness would add expense to these proceedings, it is each party's autonomous decision whether to do so.
COMMENT No. 12: One commenter states that expressly authorizing only one deposition would be too limiting, and requested the removal of (2) in New Rule VII.
RESPONSE No. 12: The CSI disagrees with this comment. The purpose of these rules is to create as expedient and economical an arbitration process as possible. The CSI notes that the American Arbitration Association (AAA) rules on commercial arbitration do not automatically provide for depositions at all, and the AAA rules on disputes between health insurers and healthcare providers only allow for one deposition as a rule. The CSI believes that given the narrow scope of this arbitration process, one deposition should be sufficient in most cases. Also, more depositions may be agreed to between the parties or granted by the independent reviewer should they become necessary.
COMMENT No. 13: One commenter suggested that parties should be required to exchange "a summary of testimony" expected from each witness at the same time that parties are required to exchange lists of witnesses under New Rule VII.
RESPONSE No. 13: The CSI agrees with the commenter, and has modified New Rule VII accordingly.
COMMENT No. 14: One commenter requested additional language in New Rule VII to prohibit the use of information at the hearing that was not disclosed to other parties at least 21 days before the hearing.
RESPONSE No. 14: The CSI agrees with the commenter, except that the CSI believes this language is more appropriate in the rule on the hearing itself, instead of the rule on discovery. The CSI has modified New Rule X accordingly.
COMMENT No. 15: One commenter suggested that the language in (3) of New Rule VII be altered to directly reference the factors listed in 33-2-2304, MCA. In addition, the commenter requested including a limitation on discovery to keep the process "efficient and economical."
RESPONSE No. 15: The CSI agrees with the commenter, and has modified the language of New Rule VII accordingly, except that the CSI substituted standard "overly burdensome" language as a limitation on discovery.
COMMENT No. 16: Two commenters think that the 10-page limitation on prehearing briefs, inclusive of any attachments, in New Rule IX is too restrictive. One commenter requested that the page limitation be increased to 15 pages, and both commenters requested that attachments not be included in the page limit.
RESPONSE No. 16: The CSI disagrees with both commenters. The purpose of the pre-hearing brief is to provide a simple overview of the materials and arguments that will be presented at the hearing. The CSI believes ten pages will be sufficient to provide such an overview, and any attachments not included with the pre-hearing brief can be provided at the hearing itself.
COMMENT No. 17: One commenter stated that hearings in person are typically better for all parties, and requested removing language in New Rule X creating the presumption that hearings will be by telephone.
RESPONSE No. 17: The CSI understands the commenter's concern about telephonic versus in-person hearings. The CSI has changed the language from "must" to "should," to reduce the presumption that hearings are to be held telephonically. However, the CSI still believes, given the primary purpose of expediency and knowing that some parties will be based outside the state, that the presumption of telephonic hearings should remain. In addition, any party to an arbitration may request that the hearing be in-person.
COMMENT No. 18: One commenter suggested adding the word "cross" before "examination" in subsection (2) of New Rule X.
RESPONSE No. 18: The CSI disagrees with adding the word "cross," because cross-examination implies the standard procedure used at trial, which may include elements that would be overly restrictive for these proceedings, particularly as it applies to the independent reviewer.
COMMENT No. 19: One commenter requested that an additional potential sanction be added to New Rule XI, namely that if the other party requested it, the independent reviewer could dismiss the arbitration proceeding. The commenter also requested the inclusion of a provision prohibiting the independent reviewer from issuing monetary sanctions.
RESPONSE No. 19: The CSI agrees that this additional sanction would fit the primary purpose of keeping this process expedient. If one party subverts the process to the extent that finishing it would provide no benefit to either party, then the independent reviewer should have the authority to end the process. The CSI has modified New Rule XI accordingly. However, the CSI disagrees with including a provision prohibiting monetary sanctions. The CSI is attempting to avoid making rules which are redundant with statutes. Monetary sanctions are already prohibited by 33-2-2304, MCA, and are therefore already prohibited by New Rule IX because they are "disallowed by law."
COMMENT No. 20: Two commenters argue that final arbitration decisions must be confidential, and that the language in New Rule XII should be modified to accommodate this request. Both commenters note that the majority of air ambulance services will not go through this arbitration process, and so public disclosure of the relatively few final determinations under these rules would probably not be a fair representation of the actual market rate air ambulance services charge to insurers. Both commenters stated their concern that public final determinations would affect the actual market rate in a manner not intended by the legislature.
RESPONSE No. 20: These comments were well-taken, and the CSI has revised the confidentiality language in New Rule XII. The CSI does expressly retain the right to request information necessary to review this arbitration process, but otherwise the parties and independent reviewers will keep these final determinations confidential.
COMMENT No. 21: One commenter requested the addition of another new rule to prohibit ex parte communications.
RESPONSE No. 21: The CSI agrees that ex parte communications should be prohibited. The CSI included language to this effect in New Rule VI, instead of in a separate rule.
/s/ Michael A. Kakuk /s/ Kris Hansen Michael A. Kakuk Kris Hansen Rule Reviewer Chief Legal Counsel
Certified to the Secretary of State October 2, 2017.
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