PRINTER'S NO. 1370
No. 1164 Session of 1985
INTRODUCED BY COHEN, MANDERINO, MAIALE, PERZEL, R. C. WRIGHT,
HALUSKA, STEWART, FATTAH, ITKIN, KUKOVICH, HARPER, SERAFINI,
LEVDANSKY, DALEY, PRESTON, PISTELLA, LINTON, DEAL, KASUNIC,
VEON, LUCYK, DeWEESE, FEE, JOSEPHS, MORRIS, COWELL, WOZNIAK,
BATTISTO, TRELLO AND PETRONE, MAY 8, 1985
REFERRED TO COMMITTEE ON HEALTH AND WELFARE, MAY 8, 1985
AN ACT
1 Regulating health care costs; establishing the Health Care Cost
2 Reform Commission and providing for its powers and duties;
3 providing for hospital cost containment, mandatory efficiency
4 requirements, utilization controls, efficiency ratings,
5 public accountability of health care costs, health care for
6 the indigent; establishing the Indigent Care Pool and
7 Indigent Care Fund; requiring certain contributions; further
8 providing for a State Health Plan; limiting destabilizing
9 health care providers; mandating certain health care
10 benefits; and making an appropriation.
11 TABLE OF CONTENTS
12 Chapter 1. Preliminary Provisions
13 Section 101. Short title.
14 Section 102. Definitions.
15 Chapter 3. The Health Care Cost Reform Commission
16 Section 301. Establishment.
17 Section 302. Membership.
18 Section 303. Organization of commission.
19 Section 304. General powers.
20 Section 305. Adjudications.
1 Chapter 5. Hospital Cost Containment
2 Section 501. Comprehensive Hospital Cost Containment Plan.
3 Section 502. Mandatory efficiency requirements.
4 Section 503. Utilization controls.
5 Section 504. Hospital efficiency rating system.
6 Section 505. State-owned hospitals.
7 Chapter 7. Public Accountability for Health Care Costs
8 Section 701. Truth-in-treatment price list.
9 Section 702. Uniform hospital data system.
10 Section 703. Report to commission.
11 Section 704. Use of reporting statements.
12 Chapter 9. Cost Containment Through Improving Public Health
13 Section 901. Right to health care.
14 Section 902. Health care for the medically indigent.
15 Section 903. Augmented preventive services.
16 Section 904. Special report.
17 Chapter 11. Restructured State Health Plan
18 Section 1101. State Health Plan.
19 Section 1102. Alternative systems.
20 Section 1103. Expansion of services.
21 Section 1104. Additional health plan features.
22 Section 1105. Preserving skilled work force.
23 Section 1106. Professional services.
24 Chapter 13. Limitation of Destabilizing Health Care Providers
25 Section 1301. For-profit conversions.
26 Section 1302. Profiteering.
27 Section 1303. Rate base.
28 Chapter 15. Mandated Health Benefits
29 Section 1501. Cost-benefit analysis.
30 Chapter 99. Miscellaneous Provisions
19850H1164B1370 - 2 -
1 Section 9901. Initial appointments to commission.
2 Section 9902. Repeals.
3 Section 9903. Appropriation.
4 Section 9904. Effective date.
5 The General Assembly finds that there exists in this
6 Commonwealth a major crisis because of the continuing escalation
7 of costs for health care services. Because of the continuing
8 escalation of costs, an increasingly large number of
9 Pennsylvania citizens have no, or severely limited, access to
10 appropriate and timely health care. Increasing costs are also
11 undermining the quality of health care services currently being
12 provided. Further, the continuing escalation is negatively
13 affecting the economy of this Commonwealth, is restricting new
14 economic growth and is impeding the creation of new job
15 opportunities in this Commonwealth.
16 The continuing escalation of health care costs is
17 attributable to a number of interrelated causes, including:
18 (1) Inefficiency in the present configuration of health
19 care service systems and in their operation.
20 (2) The present system of health care cost payments by
21 third parties.
22 (3) The unreasonable profiteering by certain health care
23 providers and insurers.
24 (4) The absence of a concentrated and continuous effort
25 in all segments of the health care industry to contain health
26 care costs.
27 Therefore, it is hereby declared to be the policy of the
28 Commonwealth of Pennsylvania to promote health care cost
29 containment by creating a corporate and politic body to be known
30 as the Health Care Cost Reform Commission. The public purposes
19850H1164B1370 - 3 -
1 for which the commission shall operate shall be to:
2 (1) Promote and regulate the efficiency of health care
3 providers and insurers.
4 (2) Promote the development of cost efficient quality
5 alternative health care systems.
6 (3) Develop a State Health Plan which will promote a
7 reconfiguration of the health care service delivery systems
8 in order to provide timely health care to all Pennsylvania
9 citizens, thereby improving the public health and reducing
10 health care costs in the long run.
11 (4) Regulate profiteering by health care providers and
12 insurers.
13 (5) Continually study ways to improve cost effectiveness
14 in the health care industry.
15 Such purposes are hereby declared to be public uses for which
16 public money may be spent.
17 Further, it is declared to be the public policy of this
18 Commonwealth that the Department of Health, the Insurance
19 Department, the Department of Labor and Industry and the
20 Department of Public Welfare join in this commitment to contain
21 health care costs in this Commonwealth.
22 The General Assembly of the Commonwealth of Pennsylvania
23 hereby enacts as follows:
24 CHAPTER 1
25 PRELIMINARY PROVISIONS
26 Section 101. Short title.
27 This act shall be known and may be cited as the Health Care
28 Cost Reform Act.
29 Section 102. Definitions.
30 The following words and phrases when used in this act shall
19850H1164B1370 - 4 -
1 have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Commission." The Health Care Cost Reform Commission.
4 "Health care insurer." An insurance company, hospital plan
5 corporation, professional health service plan, health
6 maintenance organization, preferred provider organization and
7 any other third party payor of medical bills regulated by the
8 Insurance Department.
9 "High variation procedure." A medical procedure for which
10 patterns of incidence and frequency vary widely and the patterns
11 of which cannot be explained by differences in the health of the
12 population.
13 "Hospital." A general, tuberculosis, mental, chronic disease
14 or other type of hospital, kidney disease treatment center, or
15 ambulatory surgical facility, whether profit or nonprofit, and
16 including those operated by an agency of State or local
17 government.
18 "Medically indigent." The status of a person who is a member
19 of a family unit whose total income is less than two-thirds of
20 the Statewide average weekly wage; whose gross assets, exclusive
21 of the family home and one motor vehicle, do not exceed an
22 amount equal to two-thirds of the Statewide average annual wage;
23 and who is ineligible for medical assistance under the act of
24 June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code.
25 "Physician." A practitioner or doctor of medicine, surgery
26 or a specific disease, or an optometrist, osteopathic physician
27 or podiatrist.
28 "Statewide average weekly wage." That amount determined
29 annually by the Department of Labor and Industry under the act
30 of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), known
19850H1164B1370 - 5 -
1 as the Unemployment Compensation Law.
2 CHAPTER 3
3 THE HEALTH CARE COST REFORM COMMISSION
4 Section 301. Establishment.
5 There is hereby established an independent commission to be
6 known as the Health Care Cost Reform Commission.
7 Section 302. Membership.
8 (a) Appointment.--The commission shall consist of 11 members
9 to be appointed as follows:
10 (1) Three members shall be appointed by the Governor.
11 (2) Two members shall be appointed by the President pro
12 tempore of the Senate.
13 (3) Two members shall be appointed by the Minority
14 Leader of the Senate.
15 (4) Two members shall be appointed by the Speaker of the
16 House of Representatives.
17 (5) Two members shall be appointed by the Minority
18 Leader of the House of Representatives.
19 Members of the commission shall include one hospital
20 representative, one physician, one representative of health
21 insurers, one representative of hospital workers, and seven
22 consumers, one of whom shall be a representative of organized
23 labor.
24 (b) Terms.--A member's regular term of office shall be for a
25 three-year period expiring on June 30. Appointments for
26 successor terms, vacancies and unexpired terms shall be filled
27 by the same appointing authority as the original appointment.
28 Section 303. Organization of commission.
29 (a) Meetings and quorum.--The commission shall hold regular
30 meetings at least once every two months and may provide for
19850H1164B1370 - 6 -
1 special meetings as it deems desirable. Five members shall
2 constitute a quorum for the transaction of any business, unless
3 a greater number is required by the bylaws, and the act by the
4 majority of the directors present at any meeting in which there
5 is a quorum shall be deemed to be the act of the commission.
6 (b) Bylaws.--The commission shall adopt bylaws, not
7 inconsistent with this act, and may appoint or elect such
8 officers as it deems advisable.
9 (c) Expenses.--Members of the commission shall receive no
10 compensation for their services, but shall be reimbursed for
11 expenses actually and necessarily incurred in the performance of
12 their duties.
13 Section 304. General powers.
14 (a) Powers enumerated.--The commission shall exercise all
15 powers necessary or appropriate to carry out this act,
16 including, but not limited to, the following:
17 (1) To employ an executive director, legal counsel,
18 hearing examiners and such other employees as it deems
19 advisable, and fix their compensation and prescribe their
20 duties.
21 (2) To make and execute contracts and other instruments,
22 including those for the purchase or leasing of equipment and
23 supplies, necessary or convenient to the exercise of the
24 powers of the commission.
25 (3) To conduct examinations and investigations and to
26 hear testimony and take proof, under oath or affirmations, at
27 public or private hearings, on any matter material to its
28 information.
29 (b) Rules and regulations.--The commission may, in the
30 manner provided by law, promulgate the rules and regulations
19850H1164B1370 - 7 -
1 necessary to carry out this act.
2 Section 305. Adjudications.
3 The commission may conduct hearings, in accordance with Title
4 2 of the Pennsylvania Consolidated Statutes (relating to
5 administrative law and procedure), to determine if any person,
6 hospital or health care insurer has violated this act, or
7 regulations duly promulgated hereunder. The commission may
8 designate a hearing examiner, who shall have the power to
9 administer oaths, examine witnesses and receive evidence, to
10 conduct the hearing for it and to make recommended findings to
11 it. Any final adjudication by the commission may be appealed to
12 Commonwealth Court in the manner provided by law.
13 CHAPTER 5
14 HOSPITAL COST CONTAINMENT
15 Section 501. Comprehensive Hospital Cost Containment Plan.
16 The commission shall develop and promulgate a plan to be
17 known as the Comprehensive Hospital Cost Containment Plan. This
18 plan shall include mandatory efficiency requirements and
19 utilization controls and provide for the development of a
20 hospital efficiency rating system.
21 Section 502. Mandatory efficiency requirements.
22 Within one year from the effective date of this act, every
23 hospital in this Commonwealth shall comply with the following
24 requirements, as a condition of operation in this Commonwealth:
25 (1) Whenever the purchase or rental of equipment, food,
26 medical supplies or insurance or legal, accounting or
27 management services is estimated to exceed $2,500, it shall
28 be the duty of a hospital to have such purchase or rental
29 made pursuant to a contract awarded to the lowest responsible
30 bidder, after advertisement for bids in a newspaper of
19850H1164B1370 - 8 -
1 general circulation within the county in which the hospital
2 operates. A hospital shall be deemed to satisfy the foregoing
3 if it makes a purchase or rental through a cooperative
4 consortium, which obtains the equipment, food or medical
5 supplies or insurance pursuant to a contract awarded to the
6 lowest responsible bidder, after advertising for bids in five
7 newspapers of general circulation in this Commonwealth.
8 (2) The hospital shall have a pharmaceutical control
9 system in place designed to substitute drugs and
10 prescriptions with equally effective drugs and prescriptions
11 of lesser cost.
12 (3) A hospital shall have in place a self-enforcing
13 ongoing energy conservation program.
14 (4) A hospital shall submit to each patient an itemized,
15 unified bill, in a format approved by the commission,
16 inclusive of all professional fees for services received
17 during that hospital stay.
18 (5) A hospital shall include and identify all
19 professional medical costs, fees and expenses in its budget.
20 The cost of medical education may not be included in a
21 hospital's rate base for medical assistance and health care
22 insurer reimbursement.
23 (6) Each hospital shall maintain, in place, a full-risk,
24 comprehensive, management insurance program.
25 (7) Unless it can demonstrate it is not cost effective
26 to do so, a hospital shall be required to enter into regional
27 or subregional agreements with other hospitals for purposes
28 of sharing common administrative services and costs.
29 (8) Costs incurred for activities directly related to
30 influencing employees respecting utilization may not be
19850H1164B1370 - 9 -
1 included in a hospital's rate base for medical assistance and
2 health care insurer reimbursement.
3 Section 503. Utilization controls.
4 (a) Program.--Within one year from the effective date of
5 this act, the commission shall promulgate regulations providing
6 for a comprehensive utilization control program, as a condition
7 of operation in this Commonwealth, for all hospitals, which at a
8 minimum shall include the following:
9 (1) Preadmission testing for all elective admissions.
10 (2) Utilization review for all hospital admissions which
11 shall include the following:
12 (i) Preadmission review for all elective admissions.
13 (ii) Review of all emergency admissions within 48
14 hours thereof.
15 (iii) Concurrent review for all inpatient
16 admissions.
17 (iv) Retrospective review for all inpatient
18 admissions.
19 (3) Mandatory second surgical opinions for all elective
20 surgery identified by the commission as a high variation
21 medical procedure under section 704.
22 (b) No liability for unnecessary services.--No patient or
23 health insurer shall be liable to a hospital or any other health
24 care provider for health care services finally adjudged
25 unnecessary, by the utilization control program promulgated
26 hereunder, provided that the patient has acted in good faith.
27 Section 504. Hospital efficiency rating system.
28 The commission shall develop an efficiency rating system for
29 purposes of providing a cost-efficiency profile for each
30 hospital in this Commonwealth. The efficiency rating system
19850H1164B1370 - 10 -
1 shall specifically evaluate cost efficiency in the areas of:
2 (1) Administrative management salaries.
3 (2) Professional fees.
4 (3) Medical supplies and pharmaceuticals.
5 (4) Food and dietary services.
6 (5) Fuel and utilities.
7 (6) Contracted services.
8 (7) Any other costs and expenses deemed relevant by the
9 commission.
10 The efficiency rating system shall also contain factors which
11 take into consideration the individual circumstances of each
12 hospital, such as, but not limited to, age of the facility,
13 physical plant size, caseload, teaching and research programs,
14 location and population served. Utilizing the efficiency rating
15 system, the commission shall target specific areas for improving
16 an individual hospital's efficiency.
17 Section 505. State-owned hospitals.
18 The commission shall research and develop hospital efficiency
19 and cost containment procedures, techniques and models and shall
20 test these procedures, techniques and models at various
21 hospitals owned by the Commonwealth. The State-owned hospitals
22 shall cooperate with the commission and shall fairly test the
23 commission's hospital efficiency and cost containment
24 procedures, techniques and models provided that such testing
25 does not endanger patient health.
26 CHAPTER 7
27 PUBLIC ACCOUNTABILITY FOR HEALTH CARE COSTS
28 Section 701. Truth-in-treatment price list.
29 (a) Publication.--Each hospital in this Commonwealth, as a
30 continuing condition of licensure, must publish, during the last
19850H1164B1370 - 11 -
1 week of January 1986 and in the last week of January for each
2 year thereafter, in a newspaper of general circulation within
3 the county in which it is located, a truth-in-treatment price
4 list, in a form prescribed by the commission, specifically
5 identifying the prices for all facilities and services provided
6 by the hospital, and identifying all the procedures performed at
7 the hospital and the price range among the physicians performing
8 those procedures at the hospital. If, during the course of the
9 year, more than 10% of the prices as published are changed
10 within 30 days thereafter, the hospital shall, as a condition of
11 licensure, republish the amended price list.
12 (b) Posting of notice.--As a continuing condition of
13 licensure, hospitals shall post a current truth-in-treatment
14 price list, in a form prescribed by the commission, in at least
15 one conspicuous public area per floor of the hospital, as well
16 as in any patient registration area, general information desk
17 and emergency room.
18 Section 702. Uniform hospital data system.
19 Within one year from the effective date of this act, the
20 commission shall promulgate regulations providing for a uniform
21 fiscal and programmatic information and data system for use by
22 all hospitals in this Commonwealth. The uniform information and
23 data system should, in addition to the normal fiscal components
24 of income and expenses, also provide sufficient programmatic
25 information to reflect conditions treated, types of treatment
26 provided, length of hospital stay, bed vacancies and utilization
27 data for specific populations by age, sex, occupation or other
28 medically relevant groups.
29 Section 703. Report to commission.
30 By March 15 of the calendar year following the first full
19850H1164B1370 - 12 -
1 calendar year in which the uniform information and data system
2 is in effect, and for each calendar year thereafter, a hospital
3 shall submit to the commission a verified fiscal and
4 programmatic reporting statement for the preceding calendar
5 year, in the form prescribed by the commission.
6 Section 704. Use of reporting statements.
7 (a) Publication.--The commission shall utilize the annual
8 reporting statements provided under section 703, as well as
9 other data, records and matters of record available to it, to
10 develop and publish periodic reports on:
11 (1) Comparable practice patterns among individual
12 hospitals or according to appropriate regions or subregions
13 within this Commonwealth, concerning population based
14 admission rates, total lengths of stay and preoperation and
15 postoperation lengths of stay.
16 (2) Comparisons among individual hospitals, or
17 appropriate regions or subregions, of room and board charges,
18 ancillary charges, total hospital stay charges, and charges
19 for inpatient versus outpatient procedures.
20 (3) Statewide, regional or subregional comparisons
21 between and among the types and frequencies of
22 hospitalizations and treatments, adjusted for severity and
23 stage of illness.
24 (4) Comparison of practice patterns with other states.
25 (b) High variation procedures.--The commission shall include
26 in its reports the existence of any high variation medical
27 procedures and must contain a section identifying those
28 hospitals and physicians which, on the basis of the fiscal and
29 programmatic accounting statements filed with the commission, as
30 well as other data provided the commission, appear to promote
19850H1164B1370 - 13 -
1 excessive utilization of the health services they provide,
2 except that physicians shall be identified in the reports by
3 their medical license number only.
4 (c) Excessive utilization by physician.--Further, whenever
5 it shall appear to the commission that a physician has promoted
6 excessive utilization of health services, it shall review its
7 findings with the physician. If, after six months following this
8 review, it appears to the commission that the physician
9 continues to promote the excessive utilization of health
10 services, the commission shall file a complaint with the State
11 Board of Medical Education and Licensure, the State Board of
12 Osteopathic Medical Examiners, the State Board of Optometrical
13 Examiners or the State Board of Podiatry Examiners, as the case
14 may be, which shall hold a timely hearing thereon. A finding by
15 the appropriate board of excessive utilization of health service
16 shall constitute good reason for disciplinary action, including
17 suspension or revocation of license.
18 CHAPTER 9
19 COST CONTAINMENT THROUGH IMPROVING PUBLIC HEALTH
20 Section 901. Right to health care.
21 Every person in this Commonwealth shall have the right to
22 receive timely and appropriate health care service from any
23 hospital operating in this Commonwealth. As a continuing
24 condition of licensure, each hospital shall offer and provide
25 its full range of health care services to every person in this
26 Commonwealth regardless of financial status or ability to pay.
27 Hospitals may transfer patients only in instances where the
28 hospital lacks the staff or facilities to properly render
29 definitive treatment.
30 Section 902. Health care for the medically indigent.
19850H1164B1370 - 14 -
1 (a) Indigent care pool.--To reduce the undue burden on the
2 several hospitals that treat medically indigent people on an
3 uncompensated basis, and to contain the long-term costs
4 generated by untreated or delayed treated illness and disease,
5 there is hereby created an indigent care pool to help fund the
6 delivery of timely and appropriate inpatient, outpatient and
7 preventive health care services to the medically indigent.
8 Moneys in the pool shall be held in a separate account in the
9 State Treasury which is hereby established and which shall be
10 known as the Indigent Care Fund. This fund shall be administered
11 by the commission and all moneys in the fund are hereby
12 appropriated to the commission on a continuing basis to carry
13 out this section.
14 (b) Contributions.--Within 30 days following the end of its
15 fiscal year, each hospital in this Commonwealth shall contribute
16 to the indigent care pool 1% of its gross operating revenue for
17 the fiscal year, subject to the credit provided in subsection
18 (c). The Commonwealth shall contribute to the pool, on a
19 quarterly basis, an amount equal to 80% of all of the hospital
20 contributions paid or payable into the pool during the preceding
21 quarter. In addition, within 30 days following the end of its
22 fiscal year, every health care insurer in this Commonwealth
23 shall contribute 0.3% of its gross health insurance revenues to
24 the pool.
25 (c) Credits.--Hospitals which expend more than 3% of their
26 gross operating budget on providing health care to the medically
27 indigent shall be entitled to the following credit against the
28 contribution required in subsection (b). For every dollar of
29 uncompensated reasonable and necessary expense for caring for
30 the medically indigent, in excess of 3% of its budget, the
19850H1164B1370 - 15 -
1 hospital shall receive a credit of $1 toward its contribution to
2 the indigent care pool.
3 (d) Distribution.--The commission shall administer the
4 indigent care pool and shall equitably distribute the funds
5 therein, according to a formula to be developed by promulgated
6 regulation, to provide financial relief to hospitals which
7 shoulder an inordinate burden of providing health care to the
8 medically indigent.
9 (e) Eligibility.--Before a hospital can be eligible to
10 receive any funds from the indigent care pool, it must provide
11 appropriate certification that for the prior fiscal year, it has
12 met all its obligations under the Hill-Burton Act (60 Stat.
13 1040, 42 U.S.C. 291 et seq.) and under this act.
14 (f) Definition.--As used in this section the term
15 "uncompensated" means a total lack of payment from any source.
16 Section 903. Augmented preventive services.
17 (a) Studies, reports, etc.--The commission shall conduct
18 studies and publish reports thereon analyzing the effects which
19 specific augmented preventive services would have on health care
20 cost containment. Such reports shall be issued and delivered by
21 September 30 of each year to the Governor, to the Chairman of
22 the Senate Appropriations Committee and to the Chairman of the
23 House Appropriation Committee, so that these reports may be
24 considered in the development of the budget for the
25 Commonwealth. Each report shall contain the recommendation by
26 the commission as to whether the augmented preventive service
27 can be provided to sufficient numbers of the population of this
28 Commonwealth on a cost-effective basis.
29 (b) Augmented preventive services.--Augmented preventive
30 services include, but are not limited to: prenatal care;
19850H1164B1370 - 16 -
1 hypertension screening and treatments; cancer screening; early
2 detection and intervention in child developmental delays;
3 diabetes education; accident prevention; alcohol and drug
4 control or cessation for abusers; hemophelia treatment; expanded
5 ambulatory services; programs to aid elderly people in
6 independent living; weight control; cessation of smoking;
7 occupational disease detection and prevention; and environmental
8 disease detection and prevention. Augmented preventive services
9 may be targeted for different age, sex or other medically
10 relevant population groups.
11 Section 904. Special report.
12 (a) Special medical needs.--The commission shall study and
13 make a report, within 18 months from the effective date of this
14 act, on the special medical needs of:
15 (1) Senior citizens, particularly low-income senior
16 citizens, senior citizens who are members of minority groups
17 and senior citizens residing in low-income urban or rural
18 areas.
19 (2) Low-income rural and urban areas.
20 (3) Minority communities.
21 (4) Women.
22 (5) Children.
23 (6) Workers.
24 (7) Veterans.
25 (b) Content of report.--The report must include information
26 on the current availability of services to these targeted parts
27 of the population, and whether access to such services has
28 increased or decreased over the past ten years, and specific
29 recommendations for the improvement of their primary care and
30 health delivery systems, including disease prevention and
19850H1164B1370 - 17 -
1 comprehensive health care services. The commission shall also
2 study and report on the effects of using prepaid, capitated or
3 HMO health delivery systems as ways to promote the delivery of
4 primary health care services to the underserved segments of the
5 population enumerated in subsection (a).
6 CHAPTER 11
7 RESTRUCTURED STATE HEALTH PLAN
8 Section 1101. State Health Plan.
9 The commission shall develop a new and restructured State
10 Health Plan for this Commonwealth and publish the same by June
11 30, 1986. Thereafter, the commission shall publish revisions of
12 the State Health Plan on a triennial basis. The policies of the
13 Department of Health, Insurance Department, Department of Labor
14 and Industry and the Department of Public Welfare, to the extent
15 they impact on health care costs, shall be consistent with the
16 State Health Plan.
17 Section 1102. Alternative systems.
18 (a) Basis of systems.--The State Health Plan shall promote
19 and stimulate the development of alternative systems to hospital
20 care which can more effectively and more economically deliver
21 health care services without diminution in quality. Alternative
22 health care systems may be developed on a Statewide basis,
23 regional basis, subregional basis or individual hospital basis.
24 (b) Components of systems.--Alternative health care systems
25 shall include, but not be limited to, ambulatory surgical
26 facilities, day treatment facilities, improved home care
27 services, nursing home care, hospice care, community-based
28 treatment programs addressing the special needs of the elderly
29 and chronically ill (including the chronically mentally ill and
30 mentally retarded), group medical practices, capitated health
19850H1164B1370 - 18 -
1 programs, preferred provider organizations and health
2 maintenance organizations.
3 (c) Unified system.--The alternatives to hospital care shall
4 be integrated into a unified health care delivery system
5 directly linked to hospitals. The commission shall have the
6 power, and its duty shall be, to promulgate regulations
7 requiring hospitals to provide either directly, or through
8 established referral agreements, a full range of more cost-
9 effective alternatives to hospital care.
10 Section 1103. Expansion of services.
11 The State Health Plan shall also provide for the expansion of
12 health care services to the underserved. This expansion shall be
13 integrated into a unified health care delivery system directly
14 linked to hospitals. Expansion of services shall be accomplished
15 on a regional basis or subregional basis, utilizing as much as
16 possible, unused hospital capacity, labor and professional
17 resources. Whenever practical, the plan shall provide for the
18 conversion of the existing hospital units, or appropriate parts
19 thereof, to alternative health care facilities, such as nursing
20 homes, ambulatory care facilities, rehabilitation facilities,
21 hospices and psychiatric care facilities.
22 Section 1104. Additional health plan features.
23 The State Health Plan shall:
24 (1) Provide incentives for the development and expansion
25 of group practice model health maintenance organizations.
26 (2) Provide for regular periods of open enrollment in
27 all plans provided by health care insurers in this
28 Commonwealth.
29 (3) Provide incentives for maximum continuity of health
30 care for individuals during periods of substantial changes in
19850H1164B1370 - 19 -
1 financial status.
2 Section 1105. Preserving skilled work force.
3 To protect against losing invaluable skills and experience
4 gained from working in a hospital setting, and to avoid the
5 greater long-term costs of training people inexperienced in the
6 health care fields to work in the new alternatives delivery
7 systems, the State Health Plan shall provide that any health
8 care workers, including professionals, rendered unemployed by
9 implementation of the plan, shall be reemployed in new or
10 existing jobs in the health care delivery systems, at equal pay,
11 fringe benefits and seniority. Applicants for certificates of
12 need must agree to give preference in hiring to qualified
13 displaced health care workers. The plan shall provide for any
14 necessary job retraining of these displaced health care workers,
15 and any displaced health care worker enrolled in a job
16 retraining course shall not be deemed unavailable for suitable
17 work or disqualified for refusing suitable work for purposes of
18 the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1),
19 known as the Unemployment Compensation Law.
20 Section 1106. Professional services.
21 (a) Areas of need.--The State Health Plan shall promote
22 incentives to encourage physicians, nurses, psychologists and
23 medical technicians to provide their services in geographical
24 areas of high need and specialties of high need, as identified
25 by the plan. The plan shall also promote incentives for
26 physicians, nurses, psychologists and medical technicians to
27 enter into long term employment in alternative health care
28 delivery systems promoted by the plan.
29 (b) Physicians.--The commission shall have the power, and
30 its duty shall be, to promulgate regulations increasing
19850H1164B1370 - 20 -
1 financial competition among physicians. A hospital shall not
2 have the right to limit arbitrarily the number of the physicians
3 to whom it grants staff privileges. Hospitals shall have the
4 right to establish their own fair and reasonable criteria for
5 hospital staff privileges, provided that these criteria shall be
6 submitted in writing to the commission.
7 (c) Appeal of denial of privileges.--Any board certified or
8 certifiable physician denied hospital privileges shall have the
9 right to appeal such denial, within 60 days thereof, to the
10 commission. If the hospital fails to show sufficient cause for
11 the denial, the commission shall order that the hospital accept
12 the physician on its staff. Nothing herein shall be construed to
13 limit the right and power of hospitals to monitor the actual
14 performance of its medical staff.
15 CHAPTER 13
16 LIMITATION OF DESTABILIZING HEALTH CARE PROVIDERS
17 Section 1301. For-profit conversions.
18 The conversion of nonprofit hospitals and nursing homes to
19 for-profit status, whether through purchase, merger or
20 otherwise, is prohibited unless the following are met:
21 (1) The new for-profit provider agrees to provide access
22 to 10% of its bed days, on an annual basis, to the medically
23 indigent.
24 (2) The new for-profit provider agrees to permit
25 unrestricted access to its services by a recipient of medical
26 assistance under the act of June 13, 1967 (P.L.31, No.21),
27 known as the Public Welfare Code, and is willing to accept
28 the level of compensation provided thereby as payment in
29 full.
30 (3) The new for-profit provider agrees to permit
19850H1164B1370 - 21 -
1 unrestricted access to its services for recipients of
2 Medicare benefits, and accept the level of compensation
3 provided thereby as payment in full.
4 (4) The new for-profit provider satisfies all the cost-
5 efficiency and cost-containment requirements of this act.
6 Section 1302. Profiteering.
7 Preferred provider organizations may not exclude from
8 participation, or otherwise penalize, any health care provider
9 in compliance with Chapter 5 unless the commission finds that
10 such exclusion would not lead to substantially diminished access
11 to health care in the appropriate region or subregion. The
12 commission shall promulgate regulations which will prohibit
13 market segmentation and unreasonable profiteering in the health
14 care industry. The commission shall study and report on the
15 short and long-term fiscal and programmatic impact on the health
16 care consumer of changes in ownership of hospitals from
17 nonprofit to profit, whether through purchase, merger or the
18 like.
19 Section 1303. Rate base.
20 Any amount for return on equity, or factor corresponding
21 thereto, may not be included in a hospital's or nursing home's
22 rate base for medical assistance and health care insurer
23 reimbursement.
24 CHAPTER 15
25 MANDATED HEALTH BENEFITS
26 Section 1501. Cost-benefit analysis.
27 The commission shall provide a cost-benefit analysis of each
28 health care benefit, as health care insurers may be required to
29 provide in the manner provided by law. In addition to providing
30 a report of the cost of each health care benefit as provided for
19850H1164B1370 - 22 -
1 in the insurance laws of this Commonwealth, the commission shall
2 update its cost-benefit analysis on a biannual basis. Upon
3 request in relation to current proposed legislation, the
4 commission shall provide the appropriate committee chairman in
5 the Senate and in the House of Representatives with a cost-
6 benefit analysis of the proposed mandated health benefit. As
7 part of the cost-benefit analysis of existing or proposed
8 mandated health benefits, the commission shall advise of the
9 existence of the least costly health delivery system for the
10 service in question.
11 CHAPTER 99
12 MISCELLANEOUS PROVISIONS
13 Section 9901. Initial appointments to commission.
14 Initial appointments to the commission shall be as follows:
15 (1) Of the members first appointed by the Governor, one
16 shall be appointed for a term expiring on June 30, 1988, one
17 shall be appointed for a term expiring on June 30, 1987, and
18 one shall be appointed for a term expiring on June 30, 1986.
19 (2) Of the members first appointed by the President pro
20 tempore of the Senate, one shall be appointed for a term
21 expiring on June 30, 1988, and one shall be appointed for a
22 term expiring on June 30, 1986.
23 (3) The member first appointed by the Minority Leader of
24 the Senate shall be appointed for a term expiring on June 30,
25 1987.
26 (4) Of the members first appointed by the Speaker of the
27 House of Representatives, one shall be appointed for a term
28 expiring on June 30, 1988, and one shall be appointed for a
29 term expiring on June 30, 1986.
30 (5) The member first appointed by the Minority Leader of
19850H1164B1370 - 23 -
1 the House of Representatives shall be appointed for a term
2 expiring on June 30, 1987.
3 Section 9902. Repeals.
4 All acts and parts of acts are repealed insofar as they are
5 inconsistent with this act.
6 Section 9903. Appropriation.
7 The sum of $925,000, or as much thereof as may be necessary,
8 is hereby appropriated to the Health Care Cost Reform Commission
9 for the fiscal year July 1, 1985, to June 30, 1986, to carry out
10 the provisions of this act.
11 Section 9904. Effective date.
12 This act shall take effect in 60 days.
D2L35DGS/19850H1164B1370 - 24 -