CurrentKentucky Department of InsurancePolicy N/A

Utilization Management / Medical Directors (Advisory Opinion)

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Clarifies Kentucky Department of Insurance requirements for managed care plans and utilization review entities regarding appointment of Kentucky-licensed medical directors and who must sign adverse benefit/denial letters under KRS 304.17A-545 and 806 KAR 17:230. Affects insurers authorized in Kentucky under a health line of authority and registered utilization review entities.

Policy Summary

PayerKentucky Department of Insurance

PolicyUtilization Management / Medical Directors (Advisory Opinion)

Policy CodePolicy N/A

Change TypeInterpretation / Guidance

Effective DateFeb 17, 2023

Next Review DateN/A

Key ActionUR entities must provide the HIPMCMD-1 form identifying the Kentucky-licensed medical director and alternate, and managed care plans must appoint the Kentucky-licensed medical director who will sign denial letters.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

All insurers & registered UR entitiesintended recipients/affected organizations

Immediateeffective date status

KRS 304.17A-545 & 806 KAR 17:230statutes/regulations referenced

HIPMCMD-1form submission by UR entities

Department Requirements & Interpretation

Department requirements and interpretation for medical director appointment and denial letter signing

Department interpretation and operational requirements to comply with KRS 304.17A-545 and 806 KAR 17:230:

Managed care plans must appoint a Kentucky-licensed medical director who shall sign any denial letter required under KRS 304.17A-540 and be responsible for treatment protocols, quality assurance activities, and utilization management decisions of the plan.

A utilization review (UR) entity under contract may provide a medical director, but only a statutorily appointed medical director (appointed by the managed care plan) can perform the ongoing, day-to-day functions required by KRS 304.17A-545; an alternative medical director may serve only during the limited timeframe(s) when the statutorily appointed medical director is absent.

The managed care plan contract must designate the medical director and alternative medical director roles to the UR entity; the UR entity must provide the Department the HIPMCMD-1 form identifying the Kentucky-licensed medical director and alternate, and the UR entity's contract must state that the UR entity's medical director will sign denial letters.

If a Private Review Agent (PRA) provides UR services for managed care plans, the insurer must appoint the PRA's Kentucky-licensed medical director to sign denial letters; the PRA must obtain that appointment from the insurer, submit a copy of the contract with its Utilization Review Registration Application, and submit new verification whenever appointment status changes.

Multiple medical directors or alternative medical directors may be appointed simultaneously; if so, submit an addendum to the MD-1 form to provide additional medical directors' information.

UR entities are responsible for monitoring statutory and regulatory changes via the Department's website or RegWatch; the Department will not notify companies individually.

This Advisory Opinion is guidance and interpretation of KRS 304.17A-545(1) and 806 KAR 17:230 and serves as notice to insurers authorized in Kentucky under a health line of authority and registered UR entities of the Department's interpretation.

Signing, Delegation, and Appointment Actions

Documentation Required

Signing and designation requirement

The UR entity's contract with the managed care plan must state that the medical director of the UR entity will be signing denial letters; the UR entity must provide the Department with the HIPMCMD-1 form identifying the Kentucky-licensed medical director and the Kentucky-licensed alternate medical director.

Managed care plan contract must designate medical director and alternative medical director roles to the UR entity.
UR entity must submit HIPMCMD-1 form identifying Kentucky-licensed medical director and alternate.

Documentation Required

Delegation and appointment when using a PRA

When a Private Review Agent (PRA) provides utilization review for managed care plans, the insurer must appoint the PRA's Kentucky-licensed medical director to sign denial letters; the PRA must obtain that appointment and submit the contract verifying the appointment with its Utilization Review Registration Application and update verification when appointment status changes.

PRA must obtain appointment from the insurer appointing the PRA's Kentucky-licensed medical director as the plan's medical director for UR activities and signing denial letters.
PRA must submit a copy of the contract between the UR entity and the insurer with its Utilization Review Registration Application and submit new verification whenever appointment status changes.

Key Definitions

medical director

Definition'Medical director' means a person meeting the requirements of KRS 304.17A-545(1) (a person appointed by the managed care plan) and includes a medical director of an entity under contract and delegated to perform utilization review on behalf of a managed care plan.

Primary responsibilitiesShall sign any denial letter required under KRS 304.17A-540 and be responsible for treatment protocols, quality assurance activities, and utilization management decisions of the plan.

Appointment sourceMust be appointed by the managed care plan per KRS 304.17A-545(1).

Contract designationManaged care plan contract must designate the medical director role to the utilization review entity when delegated.

Form requirementA utilization review entity must provide the Department with the HIPMCMD-1 form identifying the Kentucky-licensed medical director.

alternative medical director

Definition'Alternative medical director' is appointed to serve if the statutorily appointed medical director is absent and acts only during that absence.

ScopeNot equivalent to the statutorily appointed medical director for a contracted entity; cannot perform regular, day-to-day statutory functions.

ActivationMay serve only during the limited timeframe(s) when the statutorily appointed medical director is absent.

Contract requirementManaged care plan contract shall provide for an alternative medical director to be designated to the utilization review entity to comply with regulatory requirements.

Private Review Agent (PRA) appointment

Requirement for PRA entitiesRegistered Private Review Agent (PRA) entities with managed care plan clients must have a Kentucky-licensed medical director to sign any denial letters to comply with KRS 304.17A-545.

Insurer appointment when delegating to a PRAIf an insurer utilizes a PRA for utilization review, the insurer must appoint the PRA's Kentucky-licensed medical director to comply with KRS 304.17A-545.

PRA responsibilitiesThe PRA must obtain the appointment from the insurer and submit a copy of the contract between the UR entity and the insurer with its Utilization Review Registration Application.

Verification updatesThe PRA must submit new verification whenever there is a change in appointment status.

Contract contentThe contract should verify that the insurer has delegated and appointed the UR entity's Kentucky-licensed medical director to serve as the managed care plan's medical director for UR activities and signing of denial letters.

Policy Summary

PayerKentucky Department of Insurance

PolicyUtilization Management / Medical Directors (Advisory Opinion)

Policy CodePolicy N/A

Change TypeInterpretation / Guidance

Effective DateFeb 17, 2023

Next Review DateN/A

SourceLink

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Utilization Management / Medical Directors (Advisory Opinion)

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Department Requirements & Interpretation

Department requirements and interpretation for medical director appointment and denial letter signing

Department interpretation and operational requirements to comply with KRS 304.17A-545 and 806 KAR 17:230:

Multiple medical directors or alternative medical directors may be appointed simultaneously; if so, submit an addendum to the MD-1 form to provide additional medical directors' information.

UR entities are responsible for monitoring statutory and regulatory changes via the Department's website or RegWatch; the Department will not notify companies individually.

Signing, Delegation, and Appointment Actions

Documentation Required

Signing and designation requirement

Managed care plan contract must designate medical director and alternative medical director roles to the UR entity.
UR entity must submit HIPMCMD-1 form identifying Kentucky-licensed medical director and alternate.

Documentation Required

Delegation and appointment when using a PRA

PRA must obtain appointment from the insurer appointing the PRA's Kentucky-licensed medical director as the plan's medical director for UR activities and signing denial letters.
PRA must submit a copy of the contract between the UR entity and the insurer with its Utilization Review Registration Application and submit new verification whenever appointment status changes.

Key Definitions

medical director

Appointment sourceMust be appointed by the managed care plan per KRS 304.17A-545(1).

Contract designationManaged care plan contract must designate the medical director role to the utilization review entity when delegated.

Form requirementA utilization review entity must provide the Department with the HIPMCMD-1 form identifying the Kentucky-licensed medical director.

alternative medical director

Definition'Alternative medical director' is appointed to serve if the statutorily appointed medical director is absent and acts only during that absence.

ScopeNot equivalent to the statutorily appointed medical director for a contracted entity; cannot perform regular, day-to-day statutory functions.

ActivationMay serve only during the limited timeframe(s) when the statutorily appointed medical director is absent.

Contract requirementManaged care plan contract shall provide for an alternative medical director to be designated to the utilization review entity to comply with regulatory requirements.

Private Review Agent (PRA) appointment

Insurer appointment when delegating to a PRAIf an insurer utilizes a PRA for utilization review, the insurer must appoint the PRA's Kentucky-licensed medical director to comply with KRS 304.17A-545.

PRA responsibilitiesThe PRA must obtain the appointment from the insurer and submit a copy of the contract between the UR entity and the insurer with its Utilization Review Registration Application.

Verification updatesThe PRA must submit new verification whenever there is a change in appointment status.