(1) Every employer in this state which provides coverage of hospital benefits on a self- insured basis and requires the utilization review of such benefits by an insurer, its designee, or a private review agent shall:
(a) Be a registered private review agent in accordance with KRS 304.17A-607 and administrative regulations promulgated under the authority of KRS 304.17A-613; or (b) Contract with a private review agent that has been registered in accordance with KRS 304.17A-607 and administrative regulations promulgated under the authority of KRS 304.17A-613.
(2) Notwithstanding any other provision of KRS 304.17A-603, 304.17A-605, 304.17A- 607, 304.17A-609, 304.17A-611, 304.17A-613, and 304.17A-615, a self-insured employer shall not deny or reduce payment of health benefits to any person, licensed practitioner, or health facility for covered services which have been rendered to an insured unless:
(a) Notice of denial has been issued; and (b) The self-insured employer is in compliance with subsection (1) of this section.