Internal and External Reviews

V.S.A. tit. 8, ch. 107, subch. 8

in effect

8 V.S.A. § 4063 Independent external review of health care service decisions

4063. Independent external review of health care service decisions (a) As used in this section, “covered individual” includes a member of a health insurance plan not otherwise subject to the Department’s jurisdiction that has voluntarily agreed to use the external review process provided under this section. (b) A covered individual who has exhausted all applicable internal review procedures provided by the health insurance plan shall have the right to an independent external review of a decision under a health insurance plan to deny, reduce, or terminate health care coverage or to deny payment for a health care service. The independent review shall be available when requested in writing by the affected covered individual, provided the decision to be reviewed requires the plan to expend at least $100.00 for the service and the decision by the plan is based on one of the following reasons: (1) The health care service is a covered benefit that the health insurer has determined to be not medically necessary. (2) A limitation is placed on the selection of a health care provider that is claimed by the covered individual to be inconsistent with limits imposed by the health insurance plan and any applicable laws and rules. (3) The health care treatment has been determined to be experimental or investigational or is an off-label drug. A health insurance plan that denies use of a prescription drug for the treatment of cancer as not medically necessary or as an experimental or investigational use shall treat any internal appeal of such denial as an emergency or urgent appeal and shall decide the appeal within the time frames applicable to emergency and urgent internal appeals under rules adopted by the Commissioner. (4) The health care service involves a medically based decision that a condition is preexisting. (5) The decision involves an adverse determination related to surprise medical billing, as established under Section 2799A-1 or 2799A-2 of the Public Health Service Act, including with respect to whether an item or service that is the subject of the adverse determination is an item or service to which Section 2799A-1 or 2799A-2 of the Public Health Service Act, or both, applies. (c) The right to review under this section shall not be construed to change the terms of coverage under a health insurance plan. (d) The Department shall adopt rules necessary to carry out the purposes of this section. The rules shall ensure that the independent external reviews have the following characteristics: (1) The independent external reviews shall be conducted: (A) by independent review organizations pursuant to a contract with the Department, and the reviewers shall include health care providers credentialed with respect to the health care service under review and shall have no conflict of interest relating to the performance of their duties under this section; and (B) in accordance with standards of decision making based on objective clinical evidence, shall resolve all issues in a timely manner, and shall provide expedited resolution when the decision relates to emergency or urgent health care services. (2) A covered individual shall: (A) Be provided with adequate notice of the covered individual’s review rights under this section. (B) Have the right to use outside assistance during the review process and to submit evidence relating to the health care service. (C) Pay an application fee of $25.00 for each request for an independent external review of an appealable decision not to exceed a total of $75.00 annually. The application fee may be waived or reduced based on a determination by the Commissioner that the financial circumstances of the covered individual warrant a waiver or reduction. The application fee shall be paid by the health insurer, not the covered individual, if the independent review organization reverses the health insurer’s decision to deny payment for a health care service. (D) Be protected from retaliation for exercising the covered individual’s right to an independent external review under this section. (3) Other costs of the independent review shall be paid by the health insurance plan. (4) The independent review organization shall issue to both parties a written review decision that is evidence-based. The decision shall be binding on the health insurance plan. (5) The confidentiality of any health care information acquired or provided to the independent review organization shall be maintained in compliance with any applicable State or federal laws. (6) The records of, and internal materials prepared for, specific reviews by any independent review organization under this section shall be exempt from public inspection and copying under the Public Records Act. (e) Decisions relating to the following health care services shall not be reviewed under this section but shall be reviewed by the review process provided by law: (1) health care services provided by the Vermont Medicaid program or Medicaid benefits provided through a contracted health plan; and (2) health care services provided to incarcerated individuals by the Department of Corrections. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4064 Mental health services review

4064. Mental health services review (a) The purposes of this section are to: (1) promote the delivery of quality mental health services in a cost-effective manner; (2) foster the practice of mental health services review as a professional collaborative process, the primary objective of which is to enhance the effectiveness of clinical treatment; (3) protect clients and patients, employers, and mental health providers by ensuring that review agents are qualified to perform service review activities and to make informed decisions on the appropriateness of mental health care; and (4) ensure the confidentiality of clients’ and patients’ mental health records in the performance of service review activities in accordance with applicable State and federal laws. (b) As used in this section: (1) “License” means a review agent’s license granted by the Commissioner. (2) “Mental health provider” means any individual, corporation, facility, or institution certified or licensed by this State to provide mental health services, including a physician, nurse with recognized psychiatric specialties, hospital or other health care facility, psychologist, clinical social worker, mental health counselor, alcohol or drug abuse counselor, or an employee or agent of such mental health provider acting in the course and scope of employment or an agency related to mental health services. (3) “Mental health services” mean acts of diagnosis, treatment, evaluation, or advice or any other acts permissible under the health care laws of Vermont, whether performed in an outpatient or institutional setting, and include treatment for substance use disorder. (4) “Review agent” means a person or entity performing service review activities within one year following the date of submission of a fully compliant application for licensure who is affiliated with, under contract with, or acting on behalf of a business entity in this State and who provides or administers mental health benefits to members of health insurance plans subject to the Department’s jurisdiction, including a health insurer. (5) “Service review” means any system for reviewing the appropriate and efficient allocation of mental health services given or proposed to be given to a client or patient, or to a group of clients or patients, for the purpose of recommending or determining whether the services should be covered and includes activities of utilization review and managed care, but does not include professional peer review that does not affect reimbursement for or provision of services. (c) Any person who approves or denies payment, or who recommends approval or denial of payment, for mental health services, or whose review results in approval or denial of payment for mental health services on a case-by-case basis, shall not review these services in this State unless the Commissioner has granted the person a review agent’s license. The Commissioner shall adopt rules to implement the provisions of this section, including the procedures and standards for licensure. The rules shall differentiate between health maintenance organizations licensed to do business within this State and other forms of utilization review. The rules shall establish: (1) A requirement that within 10 business days after receiving a request for them, the review agent shall make available at no cost to the clients, patients, and providers affected by its service review activities the specific review criteria and standards, credentials of the reviewing professionals, and procedures and methods to be used in evaluating proposed or delivered mental health services. (2) A time period within which any determination regarding the provision or reimbursement of mental health services shall be made. (3) A requirement that any determination regarding mental health services rendered or to be rendered to a client or patient that may result in a denial of third-party reimbursement or a denial of precertification for that service shall include the evaluation, findings, and concurrence of a mental health professional whose training and expertise is at least comparable to that of the treating mental health provider. (4) The type, qualifications, and number of personnel required to perform service review activities. (5) A requirement that a determination by a review agent that care rendered or to be rendered is inappropriate shall not be made until the review agent has communicated with the patient’s attending mental health provider concerning that care. The review shall be prospective or concurrent with the treatment. (6) A requirement that any determination that care rendered or to be rendered is inappropriate shall include the written evaluation and findings of the review agent. (7) A procedure for clients, patients, mental health providers, and hospitals to seek prompt reconsideration before an independent review organization pursuant to section 4063 of this title of an adverse decision by a review agent. The external reviewer engaged by the independent review organization shall have training and expertise at least comparable to that of the treating health care provider. (8) Policies and procedures to ensure that all applicable State and federal laws to protect the confidentiality of individual mental health records are followed. (9) Policies and procedures that ensure appropriate notification and concurrence of providers and their clients or patients before client or patient interviews are conducted by the review agent. (10)(A) Prohibition of an agreement between the review agent and a business entity or third-party payor in which payment to the review agent includes an incentive or contingent fee arrangement based on the reduction of mental health services, reduction of length of stay, reduction of treatment, or treatment setting selected. (B) Nothing in this subdivision (10) shall prohibit capitation arrangements for reimbursement for mental health services. (C) A clinical decision made by the attending mental health provider regarding continued treatment shall not be construed as a denial of services subject to the provisions of this section. (d) Reviewing agents shall be subject to the provisions of chapter 129 of this title governing unfair insurance trade practices. (e) The Commissioner shall have the authority to examine, take administrative action against, and penalize review agents as provided in chapters 3, 101, and 129 of this title. A person who violates any provision of this section or who submits any false information in an application required by this section may be fined not more than $5,000.00 for each violation. (f) A review agent shall pay a license fee of $200.00 for the year of registration and a renewal fee of $200.00 for each year thereafter. In addition, a review agent shall pay any additional expenses incurred by the Commissioner to examine and investigate an application or an amendment to an application. (g) The confidentiality of any health care information acquired by or provided to an independent review organization pursuant to section 4063 of this title shall be maintained in compliance with any applicable State or federal laws. Records of, and internal materials prepared for, specific reviews under this section shall be exempt from public inspection and copying under the Public Records Act. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025; amended 2025, No. 91 (Adj. Sess.), § 31, eff. April 30, 2026.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/107Fetched: 10/21/2026