PURPOSE: This rule specifies the conditions under which the use of a managed care plan certified by the department will justify a premium discount on Workers’ Compensation insurance.

1. (1) Definitions.

   1. (A) Access fee means the percentage of savings off usual and customary health care provider charges that is often charged by an managed care organization (MCO) as reimbursement for access to its network of providers.
   2. (B) Bill re-pricing means a system for repricing charges for medical services to conform to levels contractually agreed to by health care providers, facilities and hospitals and through which discounted medical services are obtained.
   3. (C) Case management means a collaborative process by which appropriately licensed and trained health care providers coordinate, monitor and evaluate the delivery of that level of health care treatment which is necessary to assist an injured employee in reaching prompt maximum medical improvement, following prescribed medical treatment plans, and, achieving, where possible, the prompt and appropriate return to work. Case management includes “on-site case management” and “telephonic case management.”
   4. (D) Certified MCO means a workers’ compensation managed care organization certified by the department.
   5. (E) Cost savings analysis means a documentation of savings achieved through reduction of medical fees, through the use of utilization review techniques, through early employee return to work, or all of the above.
   6. (F) Department means the Missouri Department of Insurance.
   7. (G) Hospital bill auditing means a service designed to review the accuracy and applicability of hospital charges as well as to evaluate the medical necessity of all services and treatment rendered, which shall be considered distinct from utilization review.
   8. (H) Insurer means any person or entity defined under section 375.932 or 375.1002, RSMo, authorized to provide workers’ compensation insurance in Missouri. The term shall include any employees, agents, third party administrators (TPAs) or others acting on behalf of such insurers.
   9. (I) Managed care organization (MCO) means an organization, such as a preferred provider organization (PPO), a health maintenance organization (HMO) or other, direct employer/provider arrangements, designed to provide the appropriate procedures and incentives to medical providers necessary to manage the cost and utilization of care associated with claims covered by workers’ compensation insurance. Unless the context clearly requires otherwise, when the term MCO is used in this rule it will mean an MCO certified under the provisions of this rule.
   10. (J) MCO administrative fee or administrative fee means any fee or charge for the reimbursement of the administrative services of an MCO, as opposed to any fee or charge for the reimbursement of a health care provider for the rendition of health care services, treatment or supplies. Such fees reimburse the MCO for the cost of organizing a network of health care providers, negotiating provider reimbursement rates, re-pricing bills, hospital bill auditing, provider bill auditing, tracking and coordinating care, pre-certification, utilization review, cost savings analysis and other MCO administrative functions. An MCO administrative fee may be in the form of an access fee, a percentage of savings off a provider’s billed charges, a percentage of savings off average usual and customary fees as defined in an identified database, a dollar amount per hour, or some other method.
   11. (K) On-site case management means case management performed in person by the case manager as the location requires.
   12. (L) Payor means an insurer or TPA responsible for paying workers’ compensation-related claim, including a bill for the fees of an MCO required to be reimbursed under this rule.
   13. (M) Pre-certification means the process of reviewing planned nonemergency medical care to assure said care is reasonably required to cure and relieve the injured worker from the effects of the injury, as required under the Missouri Workers’ Compensation Law.
   14. (N) Provider bill auditing means a computer-assisted retrospective service which verifies the accuracy and applicability of provider charges, their conformity with usual and customary charges and their conformity with any discounts from usual and customary charges or other adjustments negotiated between the provider and the MCO. Provider bill auditing also verifies causal relationships between injury and treatment, the necessity of treatment and the accuracy of medical bills prior to recommending payment.
   15. (O) Telephonic case management means case management conducted by telephone, email, or facsimile machine.
   16. (P) TPA means a third party administrator as defined under sections 376.1075 to 376.1095, RSMo.
   17. (Q) Utilization review means a set of formal techniques designed to monitor the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of, health care services, procedures, or settings. Techniques may include ambulatory review, prospective review, second opinion, pre-certi- 20 CSR 500-6

fication, concurrent review, discharge planning or retrospective review. For purposes of this rule, utilization review shall not include case management.

1. (2) Employer’s Right to Select an MCO or Health Care Provider.

   1. (A) A Missouri employer shall have the right to select an MCO for the purpose of providing the employer with managed care services in relation to the health care required to be provided under the Missouri Workers’ Compensation Law. The employer shall have the right to select such an MCO regardless of whether that selection is approved by the employer’s insurer or the selection differs from that made by the employer’s insurer. Although the insurer may not require the employer to select a particular MCO, it may discuss that selection with the employer. While an employer may voluntarily agree to use an MCO under contract with the insurer if the employer so chooses, the employer may also select another MCO.
   2. (B) An employer may select an MCO at any time during the period of the employer’s insurance policy. An insurer will be deemed to have been notified of that selection whenever the insurer receives an administrative fee invoice from the MCO as defined in subsection (3)(E), attached to the bill of a health care provider for health care services provided to an injured employee of the insured employer.
   3. (C) Nothing in this section shall limit an employer’s right to select the health care provider as authorized under subsection 10 of section 287.140, RSMo. Although the insurer may not require the employer to use a particular health care provider, it may discuss that selection with the employer. While an employer may voluntarily agree to use the providers in an MCO network under contract with the insurer if the employer so chooses, the employer may also select a provider outside a particular MCO network.

2. (3) Coordination and Integration of Insurer and MCO Systems.

   1. (A) A managed care organization and an insurer shall coordinate and integrate their internal operational systems relating to claim reporting, claim handling, medical case management and billings as required under this section, unless alternative arrangements are agreed to by the MCO and the insurer.
   2. (B) Regarding claim reporting, an employer shall report all claims to the employer’s insurance company. The employer may also report any such claims to the employer’s MCO.
   3. (C) The fact that the employer has selected an MCO shall not require the employer’s insurer to modify its internal claims handling procedures beyond the requirements that the insurer shall cooperate with and reimburse the providers in the MCO network selected by the employer, and shall also reimburse the MCOs for its reasonable administrative fees. The insurer shall use whatever procedures the insurer ordinarily uses for dealing with nonnetwork providers to accomplish such cooperation and reimbursement.
   4. (D) The employer’s right to select a health care provider under subsection 10 of section 287.140, RSMo extends to the employer’s right to select a case management nurse, so long as the nurse is operating within the scope of his or her license.

   5. (E) An MCO shall use a standard administrative fee invoice when billing an insurer for reimbursement. An administrative fee invoice should contain the information listed below, but shall not be deemed insufficient due to the lack of any particular pieces of information so long as the document is sufficiently clear so that an insurer can determine that the document is from an MCO and that the MCO is requesting payment for MCO services, so long as the document also provides a reasonable method for the insurer to contact the MCO for further explanation:

      1. 1. The MCO name, address, telephone

number, facsimile number, federal employer identification number (FEIN); e-mail address (if available) and department MCO certification number;

1. 2. The employer’s name;
2. 3. The injured employee’s name and

Social Security number;

1. 4. The medical provider’s name and

FEIN;

1. 5. The date of the medical service;
2. 6. The provider’s usual and customary

charge for the service, treatment or supplies;

1. 7. The discounted charge negotiated by

the MCO for those same services, treatment or supplies;

1. 8. The savings resulting from the MCOs

discounts;

1. 9. The administrative fee of the MCO to

be paid by the insurer relating to the service, treatment or supplies in question.

1. (4) Criteria for Determining the Reasonableness of MCO Fees.

   1. (A) An employer’s insurer shall reimburse the reasonable administrative fees of an MCO selected by a Missouri employer if the department has certified that MCO. However, no insurer shall be required to reimburse an administrative fee charged by a departmentcertified MCO unless the fee is reasonable in relation to both the managed care services provided and to the savings which result from those services.
   2. (B) Where the type of MCO administrative fee is an access fee, there shall be a rebuttable presumption that the access fee is reasonable under subsection (A) above if it is less than or equal to twenty-five percent (≤ 25%) of the difference between the health care provider’s usual and customary charge for the service, treatment or supplies in question and the amount the provider has agreed to accept under his contract with the MCO.
   3. (C) Where the type of MCO fee is not an access fee, there shall be a rebuttable presumption that the fee is reasonable under subsection (4)(A) above if it is the standard fee charged by the MCO to other payors, when those other payors include insurers with which the MCO has formal reimbursement agreements. Where the MCO charges different payors different amounts for the fee in question under its formal reimbursement agreements with said payors, there shall be a rebuttable presumption that the lowest of these fees is reasonable under subsection (4)(A) above.
   4. (D) Where a particular MCO fee charged by the MCO exceeds an amount deemed reasonable under subsections (B) or (C) above, an insurer may satisfy its reimbursement obligations under this section by paying an amount which does in fact conform to the appropriate subsection.

2. (5) Preconditions for an Insurer’s Reimbursement of an MCO’s Fees.

   1. (A) An MCO fee must meet the following preconditions, which shall be presumed to be true unless proven otherwise by the insurer:

      1. 1. Relate to an injury or illness that is

compensable under Chapter 287, RSMo;

1. 2. Relate to a medically necessary pro-

cedure or a determination of medical necessity;

1. 3. Relate to a medical claim that has

previously been reported to the insurer by the employer;

1. 4. Relate to an employer who has a con-

tract with the insurer for workers’ compensation insurance that covers the injury or illness;

1. 5. Be from an MCO which, on the date

of the bill charge, was certified by the department;

1. 6. Be from an MCO with which the

employer has a written contract to provide MCO services;

1. 7. Be the MCO’s standard reimburse-

ment fee for the service in question;

1. 8. Be by means of an administrative fee

invoice as required under subsection (3)(E), submitted to the insurer in connection with the underlying health care provider bill; and

1. 9. Be reasonable under section (4)

above.

1. (B) If an MCO administrative fee meets the requirements of subsection (A) above, an insurer shall be required to pay the MCO fee stated on the MCO administrative fee invoice.

2. (C) MCOs seeking reimbursement from insurers should maintain a listing of their standard administrative fees for the periods for which reimbursements are sought. Such lists should disclose the terms of the MCO’s standard discounting arrangement with its health care providers and also list any administrative fees of the MCO for specific administrative functions, which may include but which are not necessarily limited to the following activities:

   1. 1. Pre-certification;
   2. 2. Prospective utilization review;
   3. 3. Concurrent utilization review;
   4. 4. Telephonic case management;
   5. 5. On-site case management;
   6. 6. Retrospective utilization review;
   7. 7. Provider bill auditing;
   8. 8. Hospital bill auditing;
   9. 9. Bill re-pricing; and
   10. 10. Cost savings analysis.
3. (D) Individual insurers and MCOs are authorized to enter into alternative reimbursement arrangements under subsection 3 of section 287.135, RSMo. Any such alternative arrangements will take precedence over the provisions of this section for the MCO and the insurer that are parties to the agreement.

1. (6) Procedure for Reimbursement by Insurers of MCO Fees.

   1. (A) An MCO seeking reimbursement from an employer’s insurer for its MCO services shall submit an administrative fee invoice to the insurer documenting the MCO services provided and the reimbursement requested.
   2. (B) The insurer shall pay an MCO fee which is reasonable under section (4) above and which meets the preconditions of section

2. (5) above.

   1. (C) To the degree there is a dispute between an MCO and an insurer under this section, said dispute may be submitted in writing to the department for its review. The dispute shall be handled in an advisory manner by the department, after providing the parties written notice of the dispute and notice of the opposing party’s allegations.
   2. (D) An MCO may accept partial payment of an amount tendered by an insurer without prejudice to the MCO’s right to the full reimbursement authorized under this rule.
   3. (E) Where a dispute between an insurer and an MCO regarding an access fee is based on a question regarding the amount of the health care provider’s underlying usual and customary charge for the service, treatment or supplies in question, the MCO may establish the provider’s usual and customary charge by means of an affidavit from the provider, or a duly authorized agent of the provider, attesting to the provider’s usual and customary charge for the period and for the service, treatment or supplies in question, supported by contemporaneous bills to other payors from that period for the same service, treatment or supplies in question.

   4. (F) An insurer may produce evidence to rebut the presumptions of sections (4) and (5) above, including evidence showing that the MCO fee in question is unreasonable in relation to either the managed care services provided or to the savings which result from those services. An MCO may produce evidence in support of said presumptions. Such evidence from either party may include information regarding:

      1. 1. The extent to which the medical case

involved or required oversight and coordination by the MCO;

1. 2. The fees normally paid by the insur-

er to other MCOs;

1. 3. The fees normally charged by the

MCO to other insurers, and to TPAs, selfinsurers and individual employers;

1. 4. The fees normally paid by other

insurers to MCOs;

1. 5. The fees normally charged by other

MCOs to insurers, TPAs, self-insurers and individual employers;

1. 6. What the health care provider has

agreed to accept from the insurer under any agreements other than the MCO agreement in question;

1. 7. The dollar amount of the MCO fee

being sought compared to the dollar amount of the underlying usual and customary charge for the service of the health care provider;

1. 8. What an independent database indi-

cates is a usual and customary charge for the health care service, treatment or supplies in question;

1. 9. What a governmental database indi-

cates is a usual and customary charge for the service, treatment or supplies;

1. 10. The charges allowed for the treat-

ment, service, or supplies when the government is the payor;

1. 11. What has been determined to be a

reasonable provider fee by the Division of Workers’ Compensation under Section 287.140.3, RSMo and regulation 8 CSR 50- 2.030 for the medical procedure upon which the MCO fee dispute is based, where such a determination has been made;

1. 12. What the department has determined

to be a reasonable fee in prior disputes of a similar nature; or

1. 13. Any other information considered

relevant by the department.

1. (G) In order to expedite its review of disputes under this rule, the department may, in its discretion or at the request of either an insurer or an MCO, consolidate separate disputes between a particular MCO and a particular insurer or insurance company holding group into a single dispute where the separate disputes concern common issues or elements.
2. (H) After both sides have been afforded the opportunity to present their evidence and comment on the evidence presented by the other party, the department shall review said evidence. After its review, the department shall provide the parties with a written advisory opinion of its conclusions as to the reasonableness of the fees under section 287.135, RSMo. The department’s advisory opinion on its conclusions as to the reasonableness of the MCO fee shall be subject to de novo review by a court of competent jurisdiction pursuant to section 536.150, RSMo.

1. (7) Department Certification of MCOs. In order to be certified, an MCO shall meet the following requirements:

   1. (A) The MCO shall contract with member health care providers who are authorized to provide health care services in this state by the appropriate licensing authorities;

   2. (B) Regarding contract requirements for medical and rehabilitative services, the MCO shall—

      1. 1. Provide for convenient access to the

following types of providers in one (1) or more Missouri counties or cities not within a county:

1. A. Primary care physicians;
2. B. Subspecialty physicians;
3. C. Rehabilitation centers; and
4. D. Hospitals;
5. 2. Provide for convenient access to pri-

mary care clinics which are specialized in providing occupational medical services;

1. 3. Employ a medical director who is

board-certified in occupational medicine or who possesses considerable experience with Missouri’s workers’ compensation system; and

1. 4. Possess the capability for progressive

rehabilitation services, including, but not limited to:

1. A. Functional, objective capacity

evaluations;

1. B. Psychological testing; and
2. C. Work hardening; 20 CSR 500-6

3. (C) Regarding additional MCO contract requirements, the MCO shall—

   1. 1. Provide employers with job-site pre-

sentations or other presentations regarding how to make proper use of the managed care services of the organization;

1. 2. Base charges on negotiated rates of

reimbursement to providers for the services specified in paragraph (7)(B)1. comparable to the best group medical plans in the geographic market area served, including provisions for basing inpatient services charges on diagnosis-related group (DRG) rates;

1. 3. Include the prepricing of claims;
2. 4. Provide monthly reports, on a claim-

by-claim basis, specifying customary charges, charges allowed under the MCO contract and the resulting savings, if any; and

1. 5. Provide for the external management

and oversight from the initial date of injury by a nonhealth care provider of the health care provider’s rendition of medical care in all cases; and

1. 6. Provide for an internal dispute reso-

lution procedure that meets the requirements of subsection 2 of section 287.135, RSMo;

1. (D) Be in addition, under the management and control of officers and directors who are competent to manage the MCO-managed health care operations, its finances, its compliance with agreements between itself and insurers or employers, or both, and its compliance with any applicable laws of Missouri.

1. (8) Certification Procedure.

   1. (A) For purposes of obtaining the department’s certification of a MCO, the organization shall provide the department with the following materials:

      1. 1. Copies of any MCO/employer and

MCO/insurer contracts to be used;

1. 2. A general diagram of the MCO’s

organizational structure;

1. 3. A listing of the MCO’s officers and

directors;

1. 4. The MCO’s most recently audited

financial report;

1. 5. A thorough description of the MCO’s

experience with the management of health care costs associated with Workers’ Compensation claims and with other health care claims;

1. 6. The geographic area, by county, the

MCO plans to serve;

1. 7. A copy of the licenses and any cer-

tificates of the medical director;

1. 8. A complete list of all primary care

physicians, subspecialist physicians, rehabilitation centers, hospitals and work hardening centers to be employed by the organization;

1. 9. The estimated savings to employers

and insurers from the use of the organization;

1. 10. The outline of the operation of the MCO to be provided to employers explaining their rights and responsibilities;

   1. 11. The MCO’s dispute resolution pro-

cedures; and

1. 12. Any other materials requested by the

director.

1. (B) The materials specified in subsection (8)(A) shall be retained by the department. Any significant changes to the nature of the MCO’s operations as reflected in these materials shall be reported to the department, but these reports need not be made more than twice a year, as measured from the date of the granting of any certification.
2. (C) The department shall review these documents and grant certification, on the form contained in Exhibit I of this rule, included herein, to those MCOs deemed to meet the criteria set forth in this rule. Any departmental decision to deny certification shall be accompanied by a written explanation by the department of the reasons for denial.
3. (D) The department may suspend or revoke the certification of a MCO at any time it establishes that the criteria set forth in this rule are no longer being met. Any such organization may request a hearing before the director on that suspension or revocation.
4. (E) MCOs previously certified need not be re-certified during the period of this code.

1. (9) Termination Date. This rule shall terminate December 31, 2002. AUTHORITY: sections 287.135 and 374.045, RSMo 2000.* Emergency rule filed Aug. 31, 1992, effective Nov. 1, 1992, expired Feb. 28, 1993. Original rule filed April 14, 1992, effective Feb. 26, 1993. Emergency amendment filed Sept. 16, 2002, effective Sept. 26, 2002, expired Dec. 31, 2002. Amended: Filed May 3, 2002, effective Nov. 30, 2002.

*Original authority: 287.135, RSMo 1993, and 374.045, RSMo 1967, amended 1993, 1995.

On September 26, 2002, the Circuit Court of Cole County, State of Missouri, issued a temporary restraining order enjoining the enforcement of the rule 20 CSR 500-6.700. On December 3, 2003, the Circuit Court of Cole County subsequently issued a permanent injunction prohibiting the Missouri Department of Insurance from taking any action to enforce or implement the foregoing regulation. See, Alliance of American Insurers, et al. v. Missouri Department of Insurance and Scott B. Lakin, Director, Case No. 02-CV-325517.