PRINTER'S NO. 473
No. 20 Session of 1991
INTRODUCED BY KUKOVICH, RICHARDSON, PISTELLA, JOSEPHS, KOSINSKI,
STUBAN, VAN HORNE, STISH, GIGLIOTTI, LAUGHLIN, PESCI,
BELARDI, HARPER, McNALLY, FREEMAN, ROEBUCK, STURLA, RITTER,
HALUSKA, MARKOSEK, GEORGE, WAMBACH, DeLUCA, LaGROTTA,
KASUNIC, ROBINSON, CAPPABIANCA, HANNA, CARN, TIGUE, HERMAN,
BELFANTI, MIHALICH, DALEY, BUNT, JAMES, BISHOP, VEON, MAIALE,
TANGRETTI, TRELLO, HUGHES, MELIO, PRESTON, LEVDANSKY AND
TRICH, MARCH 11, 1991
REFERRED TO COMMITTEE ON HEALTH AND WELFARE, MARCH 11, 1991
AN ACT
1 Providing a comprehensive plan for health care for the indigent;
2 providing further duties of the Department of Health, the
3 Department of Public Welfare and the Department of Revenue;
4 providing for a hospital payment system and for certain
5 responsibilities under the Medicaid program; providing
6 primary health care programs for children and adults;
7 establishing the Pennsylvania Health Care Fund and the
8 Pennsylvania Health Insurance Partnership Trust Fund; making
9 certain assessments; imposing a tax; providing for certain
10 tax credits; providing for enforcement and civil penalties;
11 providing for certain health care studies; further providing
12 for eligibility for medical assistance; and making repeals.
13 TABLE OF CONTENTS
14 Chapter 1. General Provisions
15 Section 101. Short title.
16 Section 102. Legislative findings and intent.
17 Section 103. Definitions.
18 Chapter 3. Pennsylvania Hospital Fair Share Program
19 Section 301. Establishment and purpose.
20 Section 302. Computation.
1 Section 303. Disproportionate share hospital.
2 Section 304. Expenditures from fund.
3 Section 305. Provision of charity care by hospitals.
4 Section 306. Use of fund moneys to reduce costs shifted to
5 other health care payors.
6 Chapter 5. Medicaid Program
7 Section 501. Hospital responsibilities under Medicaid program.
8 Section 502. Medicaid outreach.
9 Section 503. Pennsylvania Children's Medical Assistance
10 program.
11 Chapter 7. Primary Health Care Programs
12 Section 701. Children's Health Care Plan.
13 Section 702. Uninsured workers and adults.
14 Section 703. Outreach and quality assurance.
15 Chapter 9. Pennsylvania Health Care Fund
16 Section 901. Establishment.
17 Section 902. Purpose.
18 Section 903. Administration.
19 Section 904. Assessment.
20 Section 905. Civil penalty.
21 Section 906. Financial provisions.
22 Chapter 11. Pennsylvania Health Insurance Partnership Trust
23 Fund
24 Section 1101. Establishment.
25 Section 1102. Purpose.
26 Section 1103. Administration.
27 Section 1104. Composition.
28 Section 1105. Trust for enrollees.
29 Section 1106. Miscellaneous provisions.
30 Chapter 13. Health Insurance Payroll Tax
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1 Section 1301. Imposition.
2 Section 1302. Rate.
3 Section 1303. Tax credits.
4 Chapter 15. Small Business Health Insurance Tax Credit
5 Section 1501. Eligibility.
6 Section 1502. Calculation of credit.
7 Section 1503. Rules and regulations.
8 Section 1504. Reports to General Assembly.
9 Chapter 17. Access to Health Care
10 Section 1701. Discrimination prohibited.
11 Section 1702. Health maintenance organizations.
12 Section 1703. Continuity on replacement of a group policy.
13 Section 1704. Continuity for individual who changes groups.
14 Section 1705. Limitations on exclusions and waiting periods.
15 Section 1706. Waiting period for preexisting conditions.
16 Section 1707. Enforcement.
17 Chapter 19. Studies and Hearings on Health Care
18 Section 1901. Hospital uncompensated charity care study.
19 Section 1902. Medicaid reimbursement.
20 Section 1903. Study of generic substitutes for brand name
21 prescriptions.
22 Section 1904. Cost of mandated health benefits.
23 Section 1905. Physician acceptance of medical assistance
24 patients.
25 Section 1906. Subsidies provided by health service
26 corporation and hospital plan corporations.
27 Chapter 31. Miscellaneous Provisions.
28 Section 3101. Persons eligible for medical assistance.
29 Section 3102. Mandated coverage.
30 Section 3103. Group accident and sickness insurance.
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1 Section 3104. Construction and application of Chapters 3 and 9.
2 Section 3105. Repeals.
3 Section 3106. Expiration of act.
4 Section 3107. Effective date.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 CHAPTER 1
8 GENERAL PROVISIONS
9 Section 101. Short title.
10 This act shall be known and may be cited as the Health Care
11 Partnership Act.
12 Section 102. Legislative findings and intent.
13 (a) Declaration.--The General Assembly finds and declares
14 that:
15 (1) All citizens of this Commonwealth have a right to
16 affordable and reasonably priced health care and to
17 nondiscriminatory treatment by health insurers and providers.
18 (2) The uninsured health care population of this
19 Commonwealth is over one million persons, and many thousands
20 more lack adequate insurance coverage. Approximately two-
21 thirds of the uninsured are employed or dependents of
22 employed persons.
23 (3) Over one-third of the uninsured health care
24 population are children. Uninsured children are of particular
25 concern because of their need for ongoing preventative and
26 primary care. Measures not taken to care for such children
27 now will result in higher human and financial costs later.
28 Access to timely and appropriate primary care is particularly
29 serious for women who receive late or no prenatal care which
30 increases the risk of low birth weights and infant mortality.
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1 (4) The uninsured and underinsured lack access to timely
2 and appropriate primary and preventative care. As a result,
3 they often delay or forego health care, with the resulting
4 increased risk of developing more severe conditions, which
5 are more expensive to treat. This tendency of the medically
6 indigent to delay care and to seek ambulatory care in
7 hospital-based settings also causes inefficiencies in the
8 health care system.
9 (5) Health markets have been distorted through cost
10 shifts for the uncompensated health care costs of uninsured
11 citizens of this Commonwealth which has caused decreased
12 competitive capacity on the part of those health care
13 providers who serve the poor, and increased costs of other
14 health care payors.
15 (6) Cost containment efforts and increased competition
16 have and will inhibit the traditional method of funding care
17 for uninsured citizens of this Commonwealth through cost
18 shifting. This will have an even greater negative impact on
19 the ability of uninsured citizens of this Commonwealth to
20 obtain needed health care.
21 (7) Not-for-profit hospitals which have been granted a
22 tax free status by the State vary greatly in the amount of
23 charitable uncompensated health care they provide and on
24 average provide less than the national average. There has
25 been no uniform definition to determine the amount of charity
26 care provided by these health care institutions.
27 (8) Although the proper implementation of spend-down
28 provisions under Medicaid should result in the provision of
29 the vast majority of all hospital care for the uninsured
30 through the Medicaid program, hospitals vary widely in their
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1 willingness to allow patients to incur expenses so they can
2 qualify for Medicaid, and Department of Welfare regulations
3 which required hospitals to do so have recently been
4 rescinded.
5 (9) The professional health service plan corporation and
6 the hospital plan corporations which are granted an exemption
7 from the premium tax have varied greatly in the amount of
8 health services they provide to low-income citizens of this
9 Commonwealth and the manner in which they have targeted their
10 subsidies.
11 (10) Many health maintenance organizations have been
12 unwilling to reach an agreement with the Department of Public
13 Welfare, to enroll as subscribers, individuals participating
14 in or eligible for Medicaid.
15 (11) No one sector can absorb the cost of providing
16 health care to all citizens of this Commonwealth who cannot
17 afford health care on their own. The cost is too large for
18 the public sector alone to bear and instead requires the
19 establishment of a public/private partnership to share the
20 costs in a manner economically feasible for all interests.
21 The magnitude of this need also requires that it be done on a
22 time-phased, cost-managed and planned basis.
23 (b) Intent.--It is the intent of the General Assembly and
24 the purpose of this act to:
25 (1) Ensure access to timely and appropriate health care
26 for all citizens of this Commonwealth by providing for a
27 cost-effective, comprehensive health coverage for low-income
28 citizens of this Commonwealth who are unable to afford
29 coverage or obtain it through their employment.
30 (2) Provide incentives for employers to provide health
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1 insurance coverage for their employees and their uninsured
2 dependents by providing for a more affordable group coverage.
3 (3) Promote the efficient use of health services by
4 assuring that care is provided in appropriate settings;
5 promoting care provided by efficient providers, consistent
6 with high quality care; and assuring that care is being
7 provided at an appropriate stage, soon enough to avert the
8 need for overly expensive treatment.
9 (4) Provide for a pooling of funds to finance the health
10 care by hospitals providing a disproportionate share of low-
11 income persons, which will insure continued access to needed
12 inpatient care by low-income, uninsured citizens of this
13 Commonwealth and permit disproportionate share hospitals to
14 compete fairly in the marketplace.
15 (5) Assure equity among health providers and payors by
16 providing a mechanism for providers, employers, the public
17 sector and patients to share in financing indigent health
18 care.
19 Section 103. Definitions.
20 The following words and phrases when used in this act shall
21 have the meanings given to them in this section unless the
22 context clearly indicates otherwise:
23 "Average annual occupancy rate." The occupancy rate of a
24 hospital derived by dividing the total number of inpatient beds
25 for which the hospital is licensed times the number of days
26 between July 1 and June 30 of each year for which the beds were
27 licensed into the total days of inpatient care provided by the
28 hospital during the same period as follows: Total days of care
29 divided by the product of total licensed beds times total days
30 beds are licensed.
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1 "Bad debt." The difference between the patient pay amount
2 due and the patient pay revenue received.
3 "Child." A person under 18 years of age.
4 "Council." The Health Care Cost Containment Council.
5 "Department." The Department of Public Welfare of the
6 Commonwealth.
7 "Disproportionate share hospital." Each hospital, including
8 distinct parts, providing a number or percentage of inpatient
9 services paid through the medical assistance program during the
10 previous fiscal year in excess of one of the means of the
11 numbers or percentages of all hospitals, as described in Chapter
12 3.
13 "EPSDT." Early periodic screening, diagnostic and testing.
14 "Fund" or "health care fund." The Pennsylvania Health Care
15 Fund established in Chapter 9.
16 "Group." Any group for which a health insurance policy is
17 written in the Commonwealth of Pennsylvania.
18 "Health maintenance organization" or "HMO." An entity
19 organized and regulated under the act of December 29, 1972
20 (P.L.1701, No.364), known as the Health Maintenance Organization
21 Act.
22 "Health service corporation." A professional health service
23 corporation as defined in 40 Pa.C.S. (relating to insurance).
24 "Hill-Burton program." The hospital survey and construction
25 program provided in the Hill-Burton Act (60 Stat. 1040, 42
26 U.S.C. § 291 et seq.).
27 "Hospital." An institution having an organized medical staff
28 which is engaged primarily in providing to inpatients, by or
29 under the supervision of physicians, diagnostic and therapeutic
30 services for the care of injured, disabled, pregnant, diseased
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1 or sick or mentally ill persons. The term includes facilities
2 for the diagnosis and treatment of disorders within the scope of
3 specific medical specialties, including facilities which provide
4 care and treatment exclusively for the mentally ill and drug or
5 alcohol inpatient detoxification or rehabilitative care. The
6 term does not include inpatient nonhospital activity as
7 described in 28 Pa. Code § 701.1 (relating to general
8 definitions), publicly owned inpatient facilities or skilled or
9 intermediate care nursing facilities. The term also does not
10 include a facility which is operated by a religious organization
11 for the purpose of providing health care services exclusively to
12 clergymen or other persons in a religious profession who are
13 members of a religious denomination or a facility providing
14 treatment solely on the basis of prayer or spiritual means.
15 "Hospital plan corporation." A hospital plan corporation as
16 defined in 40 Pa.C.S. (relating to insurance).
17 "MAAC." The Medical Assistance Advisory Committee.
18 "Medical assistance." The State program of medical
19 assistance established under the act of June 13, 1967 (P.L.31,
20 No.21), known as the Public Welfare Code.
21 "Medicaid." The Federal medical assistance program
22 established under Title XIX of the Social Security Act (Public
23 Law 74-271, 42 U.S.C. § 301 et seq.).
24 "Medically indigent." Families and individuals who lack
25 sufficient income or financial resources through insurance or
26 other means to pay for necessary health care services.
27 "MIC." The Federal Maternal, Infant and Child Care program.
28 "Net inpatient revenue." The difference between a hospital's
29 total inpatient revenue and a hospital's total medical
30 assistance inpatient revenue.
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1 "Nondisproportionate share hospital." A hospital, including
2 distinct parts, located within this Commonwealth which provided
3 a percentage of inpatient services paid through the medical
4 assistance program during the previous fiscal year below the
5 mean of the percentages of all hospitals, as described in
6 Chapter 3.
7 "Preexisting condition exclusion." An exclusion of benefits
8 for a specified or indefinite period of time on the basis of one
9 or more physical or mental conditions for which, before the
10 effective date of enrollment:
11 (1) a person experienced symptoms that would cause an
12 ordinarily prudent person to seek diagnosis, care or
13 treatment; or
14 (2) a provider of health care services recommended or
15 provided medical advice or treatment to the person.
16 "Specialty and supplemental health services." Services not
17 included as primary health services, such as hospital care, home
18 health services, rehabilitative services, mental health
19 services, drug and alcohol services and ambulatory surgical
20 services.
21 "Spend-down." The qualifying procedure for the Pennsylvania
22 Medical Assistance Program set forth in 55 Pa. Code, Chapter 181
23 (relating to income provisions for categorically needy nonmoney
24 payment (NMP-MA) and medically needy only (MNO-MA) medical
25 assistance (MA)).
26 "Subgroup." An employer covered under a contract issued to a
27 multiple employer trust or to an association.
28 "Title XIX." Title XIX of the Social Security Act (Public
29 Law 74-271, 42 U.S.C. § 301 et seq.).
30 "Title XIX medical assistance." Only those aspects of the
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1 medical assistance program established under Title XIX of the
2 Social Security Act (Public Law 74-271, 42 U.S.C. § 301 et
3 seq.), for which Federal financial participation is available.
4 "Waiting period." A period of time after the effective date
5 of enrollment during which a health insurance plan excludes
6 coverage for the diagnosis or treatment of one or more medical
7 conditions.
8 "WIC." The Federal Women, Infants and Children program.
9 CHAPTER 3
10 PENNSYLVANIA HOSPITAL FAIR SHARE PROGRAM
11 Section 301. Establishment and purpose.
12 (a) Establishment.--The General Assembly hereby establishes
13 the Pennsylvania Hospital Fair Share Program, to be administered
14 by the department.
15 (b) Purpose.--The purpose of the program shall be to
16 identify those hospitals in this Commonwealth which provide a
17 disproportionate share of care to the medically indigent and to
18 compensate those hospitals for their services.
19 Section 302. Computation.
20 On or before the last day of January 1992, and each year
21 thereafter, the department shall:
22 (1) Determine the total number of inpatient hospital
23 days of care provided during the previous fiscal year by each
24 hospital which has entered into a medical assistance provider
25 agreement.
26 (2) Determine the number of inpatient hospital days of
27 care provided by the hospital to all persons eligible for
28 medical assistance and paid through the medical assistance
29 program during the previous fiscal year.
30 (3) Determine the number of inpatient hospital days of
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1 care provided by the hospital to persons eligible for Title
2 XIX medical assistance and paid through the medical
3 assistance program during the previous fiscal year.
4 (4) Using the information from paragraphs (1) through
5 (3), calculate the following for each hospital:
6 (i) the ratio of Title XIX medical assistance days
7 to total days;
8 (ii) the ratio of total medical assistance days to
9 total days;
10 (iii) the total number of Title XIX medical
11 assistance days; and
12 (iv) the total number of all medical assistance
13 days.
14 (5) Using the information from paragraph (4), for all
15 hospitals, determine:
16 (i) the mean ratio of Title XIX medical assistance
17 days to total days;
18 (ii) the mean ratio of total medical assistance days
19 to total days;
20 (iii) the mean of the total number of Title XIX
21 medical assistance days; and
22 (iv) the mean of the total number of all medical
23 assistance days.
24 Section 303. Disproportionate share hospital.
25 A hospital is a disproportionate share hospital if any of its
26 hospital specific results determined under section 302(4) equals
27 or exceeds the corresponding mean Statewide result for all
28 hospitals determined under section 302(5). Disproportionate
29 share hospitals shall be ranked for payment purposes by the
30 ratio of Title XIX medical assistance days to total patient days
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1 provided during the reporting period. The hospital with the
2 highest ratio of Title XIX medical assistance days to total
3 patient days provided during the reporting period shall be
4 assigned a numerical rank equal to the total number of
5 disproportionate share hospitals. The hospital with the lowest
6 ratio of Title XIX medical assistance days to total patient days
7 provided during the reporting period shall be assigned a rank
8 number of one. Each hospital shall be assigned a
9 disproportionate share rank weight equal to one plus the
10 quotient of its numerical rank divided by the total number of
11 disproportionate share hospitals.
12 Section 304. Expenditures from fund.
13 (a) Purpose.--Moneys deposited in the Pennsylvania Health
14 Care Fund shall be expended on programs established under this
15 act to provide care for the medically indigent, to provide all
16 hospitals with a medical assistance payment rate subsidy, to
17 provide a disproportionate share payment to all hospitals which
18 qualify for such payment, to provide a hold harmless payment to
19 all hospitals eligible to receive such payment, and to provide
20 for Medicaid expansion as set forth in section 3101.
21 (b) Medical assistance payment rate.--Amounts paid into the
22 fund shall be used to adjust medical assistance payment rates to
23 hospitals to the most recent rebased figures established by the
24 department. The department shall rebase the medical assistance
25 payment rates at least every 24 months, to reflect current cost
26 data, but such rates shall not exceed the upper limits for
27 Medicaid payment rates established at 42 CFR 447.272 (relating
28 to application of upper payment limits).
29 (c) Disproportionate share payments.--Amounts paid into the
30 fund shall also be used to provide disproportionate share
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1 payments to hospitals. Disproportionate share payments to
2 hospitals shall be in the form of a rate add-on. Hospitals which
3 qualify for disproportionate share payments shall receive the
4 payments at fixed intervals under the following formula:
5 (1) The department shall multiply each hospital's
6 assigned disproportionate share rank weight by its number of
7 medical assistance cases to obtain a weighted number of
8 medical assistance cases for each hospital.
9 (2) The department shall then divide the total amount of
10 money to be distributed through disproportionate share
11 payments by the total weighted number of medical assistance
12 cases for all hospitals to obtain a unit disproportionate
13 share payment weighted medical assistance case.
14 (3) The department shall then multiply each hospital's
15 weighted number of medical assistance cases by the unit
16 disproportionate share payment per weighted medical
17 assistance case to obtain a disproportionate share payment
18 for each qualifying hospital.
19 (d) Hold harmless payments.--Hold harmless payment shall be
20 made to each hospital which qualifies so that for any given
21 fiscal year no hospital receives payments from the Commonwealth
22 under subsections (b), (c) and (d) and payments of Federal funds
23 earned under this section totaling less than 1.05 times the
24 amount the hospital paid into the fund for that year, except as
25 provided in subsections (g) and (h).
26 (e) Funding for expansion of the Pennsylvania Medical
27 Assistance Program.--Payments from the fund may be made for the
28 additional costs due to the expansion of the Pennsylvania
29 Medical Assistance Program as is provided for in this act.
30 (f) Funding for medical education.--Payments from the fund
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1 may be made to hospitals for direct medical education programs.
2 (g) Total payments.--The amount to be paid to each hospital
3 under this section shall be set so that the total amounts paid
4 do not exceed the total amount deposited into the fund.
5 (h) Medical assistance program.--No payment from this fund
6 shall be made to any hospital that does not ensure that all
7 staff and admitting physicians that directly treat patients are
8 enrolled and actively participating in the Pennsylvania Medical
9 Assistance Program. As a condition of receiving payments from
10 the fund, each hospital must establish a physician referral
11 service to assist medical assistance recipients with referrals
12 to primary care and specialist physicians on an equitable,
13 rotating basis.
14 (i) Charity care.--Commencing with the calendar year
15 beginning January 1, 1993, no payment from this fund shall be
16 made to any hospital that does not provide for the year an
17 amount of uncompensated charity care, as described in section
18 1901, equal to at least 2% of their total revenue for that year.
19 Section 305. Provision of charity care by hospitals.
20 In meeting the charity care requirements under section
21 304(i), all hospitals shall:
22 (1) Spread charity care out over the entire year, if at
23 all possible.
24 (2) Maintain up-to-date records on the amount of charity
25 care provided. A copy of that record must be provided to any
26 person or group that so requests it within ten business days
27 of the request.
28 (3) Advertise the opportunity to apply for charity care
29 at the hospital in permanent, prominent displays in the
30 waiting rooms, reception areas, emergency rooms, lobbies and
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1 billing/payment areas of the hospital.
2 (4) Prominently display eligibility guideline pamphlets
3 in the same room or rooms as the announcements of the
4 presence of charity care, and readily accessible to the
5 public without requesting the assistance of any hospital
6 personnel.
7 (5) Advertise the opportunity to apply for charity care
8 in the local community in a manner designed to provide wide
9 exposure for the program.
10 Section 306. Use of fund moneys to reduce costs shifted to
11 other health care payors.
12 (a) Cost reduction.--Insofar as some hospitals have been
13 required to increase their hospital charges of other payors to
14 cover a shortfall in funding by the Medicaid program for its
15 costs, such hospitals receiving funding under this chapter shall
16 use their best efforts to proportionally reduce future charges
17 to those payors to whom those costs have been shifted to reflect
18 the increased Medicaid funding under this chapter and the
19 Medicaid program.
20 (b) Compliance report.--All hospitals receiving funds under
21 this chapter shall file reports required by the Health Care Cost
22 Containment Council which document the hospitals compliance with
23 sections 304(i) and 306(a).
24 (c) Annual report.--The council shall issue an annual report
25 to the General Assembly and the public at the beginning of the
26 calendar year on the following:
27 (1) Whether present Medicaid and Pennsylvania Hospital
28 Fair Share Program funding adequately reimburse efficient
29 hospitals which provide quality acute care for Pennsylvania's
30 Medicaid population.
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1 (2) Pennsylvania hospitals' compliance with sections
2 304(i) and 306(a) and the impact thereon to hospital charges
3 for other payors.
4 (3) Any recommendation for adjustments in the Medical or
5 Pennsylvania Fair Share Program to ensure that these programs
6 appropriately pay the costs for reimbursement to hospitals
7 for the care of Medicaid patients and adjustments that should
8 be made in sections 304(i) and 306(a).
9 CHAPTER 5
10 MEDICAID PROGRAM
11 Section 501. Hospital responsibilities under Medicaid program.
12 (a) Necessary care.--Each licensed acute care hospital shall
13 not deny necessary and timely health care due to a person's
14 inability to pay in advance from current income or resources for
15 all or part of that care.
16 (b) Installment agreements.--Hospitals shall enter into
17 reasonable installment agreements to cover the spend-down cost
18 of the care necessary for the person to qualify for medical
19 assistance coverage or insurance. Within six months of the
20 effective date of this act, the department shall issue
21 guidelines to ensure uniformity of this provision and compliance
22 with Federal and State requirements.
23 (c) Prohibitions.--It is unlawful for any hospital licensed
24 by the Commonwealth:
25 (1) to require, as a condition of admission or
26 treatment, assurance from the patient or any other person
27 that the patient is not eligible for or will not apply for
28 medical assistance;
29 (2) to deny or delay admission or treatment of a person
30 because of his current or possible future status as a medical
19910H0020B0473 - 17 -
1 assistance recipient;
2 (3) to transfer a patient to another health care
3 provider because of his current or possible status as a
4 medical assistance recipient;
5 (4) to discharge a patient from care because of his
6 current or possible future status as a medical assistance
7 recipient;
8 (5) to charge any amounts in excess of the medical
9 assistance rate for any services covered or which could have
10 been covered by the medical assistance program; or
11 (6) to discourage any person who would be eligible for
12 the medical assistance program from applying or seeking
13 needed health care or needed admission to a health care
14 facility because of his inability to pay for that care.
15 (d) Application for medical assistance.--Each hospital shall
16 provide to each prospective uninsured or underinsured patient,
17 assistance in completing an application for medical assistance,
18 within one business day of the prospective patient's first
19 request to be admitted to the hospital.
20 (e) Access to all services.--Each hospital shall ensure that
21 all Medicaid beneficiaries have full access to all available
22 services, physician specialists and any department of the
23 facility. If necessary, hospitals shall make enrollment and
24 participation in the Pennsylvania Medical Assistance Program a
25 condition of obtaining or renewing staff privileges.
26 Section 502. Medicaid outreach.
27 The department shall establish and administer an outreach
28 program to enroll people who are eligible for Medicaid but have
29 not enrolled. This shall include:
30 (1) Placing caseworkers in hospitals which serve a large
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1 Medicaid population to take on-site applications for
2 Medicaid.
3 (2) Providing Statewide training to hospital staff on
4 Medicaid spend-down and other eligibility procedures.
5 (3) Developing a program of public service announcements
6 to be aired on television and radio on a regular Statewide
7 basis, advising citizens of:
8 (i) expanded Medicaid eligibility for pregnant
9 women, infants, the elderly, the disabled, persons with
10 acquired immune deficiency syndrome (AIDS); and
11 (ii) general eligibility requirements, spend-down,
12 expedited issuance of medical assistance cards, and how
13 and where to apply.
14 (4) Developing pamphlets and informational services for
15 Medicaid providers to help providers inform patients about
16 medical assistance options and eligibility.
17 (5) Providing the General Assembly and the public an
18 annual report for each fiscal year, detailing the outreach
19 and enrollment efforts taken by each county assistance
20 office, and reporting by county on the number of citizens
21 enrolled in the Medicaid and the projected Medicaid eligible
22 population of each county.
23 Section 503. Pennsylvania Children's Medical Assistance
24 program.
25 (a) Card.--Every child in this Commonwealth eligible for
26 coverage under medical assistance shall be given a Pennsylvania
27 Children's Medical Assistance program card.
28 (b) Coverage.--
29 (1) The department shall amend its medical assistance
30 regulations to provide all medically necessary health care,
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1 diagnostic services, and treatment for which Federal
2 financial participation is available, to all children
3 enrolled under this section.
4 (2) Health care services shall be provided in sufficient
5 amount, duration and scope, required for each enrolled
6 child's medical condition.
7 (3) Children with chronic health care needs shall have
8 available targeted case management services to assist them
9 with accessing needed health care and services.
10 (c) Enrollment.--
11 (1) Every child shall be immediately enrolled in the
12 EPSDT program upon application for medical assistance. Any
13 parent wishing not to participate in the EPSDT program must
14 sign a form detailing the health care benefits that are being
15 waived.
16 (2) At time of application for medical assistance for
17 any child, or the addition of a new child, the county
18 assistance worker shall assist the parent in making an
19 appointment for the child for a EPSDT screen with the
20 physician of the parent's choice.
21 (3) At each redetermination for eligibility, the county
22 assistance worker shall determine whether the children are
23 current in their screens and if they are in need of
24 assistance in arranging health, dental, mental health or
25 other treatment. Assistance shall be provided the parent, if
26 needed, in arranging for such care, screen or transportation
27 therefor.
28 (d) Audit.--Each county assistance office shall be audited
29 by the department annually and shall conduct a performance
30 analysis of the following:
19910H0020B0473 - 20 -
1 (1) Percentage of potentially eligible children in the
2 county actually enrolled in the medical assistance and EPSDT
3 program.
4 (2) The outreach efforts as schools, day-care
5 facilities, hospitals, etc., to enroll children in the
6 medical assistance and EPSDT program.
7 (3) Of those children enrolled in medical assistance,
8 the percentage of children current in their screens and for
9 whom needed treatment and services have been obtained.
10 (4) The ease of use, accuracy, completeness and
11 readability of county specific handbooks for parents of
12 children on Medicaid, detailing all child health and
13 nutrition services available in the county and transportation
14 for medical care.
15 (5) Coordination of MIC, WIC, EPSDT, mental health, drug
16 and alcohol and other services in the county available to
17 children on medical assistance.
18 (e) Noncompliance.--Any county assistance office found to be
19 in noncompliance with the provisions of this section or which
20 has failed to take sufficient outreach efforts to enroll that
21 county's eligible children under this section shall be required
22 by the department to immediately file a corrective action plan.
23 The department shall do quarterly on-site compliance reviews of
24 the noncompliant county assistance office until that office has
25 corrected the identified performance deficiencies.
26 (f) Publicity.--The department shall develop and widely
27 utilize a media campaign for use on television, radio and local
28 newspapers, advising Pennsylvania's citizens of the availability
29 of health care for low-income children under this section.
30 (g) Report to General Assembly.--The department shall
19910H0020B0473 - 21 -
1 provide a written annual report to the General Assembly
2 detailing on a county by county basis the findings of the county
3 performance audits set forth in this section and evaluating the
4 media campaign used by the department to inform citizens about
5 the availability of health coverage for low-income children
6 under this section.
7 (h) Advisory committee.--An advisory committee made up of
8 representatives from the Consumer Subcommittee of the MAAC; the
9 Pennsylvania Chapter of the American Academy of Pediatricians;
10 Pennsylvania Academy of Family Physicians; the Developmental
11 Disability Council; the Maternal and Infant Advisory Council and
12 other interested groups, shall meet quarterly to review county
13 assistance and departmental implementation of this section and
14 to advise the department on changes in policy needed to maximize
15 the availability of timely and cost effective health care to
16 Pennsylvania's low-income children who depend on medical
17 assistance for their health care.
18 (i) Reimbursement and Demonstration programs.--
19 (1) Reimbursement under the Pennsylvania Medical
20 Assistance Medical-Surgical Fee Schedule shall be at the Plan
21 C, Blue Shield rate or the present fee, whichever is greater
22 for:
23 (i) primary physician care for children; and
24 (ii) prenatal, delivery and postnatal care for
25 pregnant women.
26 (2) The department shall immediately develop a proposal
27 for a medical assistance management demonstration program
28 which provides a capitated primary care fee for primary
29 health care services and ambulatory referrals, with the
30 Commonwealth retaining fiscal responsibility for inpatient
19910H0020B0473 - 22 -
1 care with recipient enrollment on a voluntary basis. The
2 department shall seek a waiver from the Federal Government
3 pursuant to 42 U.S.C. § 1396n (c) to operate this primary
4 care case management program for children and families.
5 CHAPTER 7
6 PRIMARY HEALTH CARE PROGRAMS
7 Section 701. Children's Health Care Plan.
8 (a) Development.--The health service corporation and each
9 hospital plan corporation shall jointly develop for operation no
10 later than January 1, 1993, a Statewide primary health care
11 insurance plan for all children of this Commonwealth who are not
12 otherwise eligible for, or covered by, a health insurance plan,
13 a self-insurance health plan or the medical assistance program.
14 (b) Department of Health.--The Children's Health Care Plan
15 shall be regulated by the Department of Health as to quality of
16 care and scope of services, but at a minimum shall provide
17 preventive care, including routine physical examinations, eye
18 and ear examinations to determine the need for vision and
19 hearing correction, and immunizations, physician office visits
20 when a child is sick, emergency care, diagnostic tests,
21 outpatient surgery, availability of 24-hours-a-day, 7-days-a-
22 week-access, integration with EPSDT, WIC, MIC Programs,
23 specialist referral requirements and prescription drugs.
24 (c) Contracts with providers.--To the fullest extent
25 practicable, the Children's Health Care Plan shall contract with
26 providers to provide primary health care services for enrollees
27 on a basis best calculated to manage costs of the program,
28 including, but not limited to, purchasing health care services
29 on a capitated basis, using managed health care techniques,
30 using generic drugs where appropriate or other cost management
19910H0020B0473 - 23 -
1 methods.
2 (d) Eligibility for enrollment.--
3 (1) To the extent funds permit, any parent, guardian or
4 other legal representative of a child residing in this
5 Commonwealth who is not eligible for or covered by a health
6 insurance plan, a self-insurance health plan or the medical
7 assistance program shall be eligible for enrollment of their
8 child in the Children's Health Care Plan. However, the plan
9 may permit enrollment by children who are eligible for a
10 health insurance plan or self-insurance health plan or
11 medical assistance program but who refuse to accept such
12 coverage if:
13 (i) the premium payment required for such coverage
14 for the child is so expensive relative to the income of
15 that family that it would constitute a severe economic
16 hardship if the family accepted such coverage for the
17 child;
18 (ii) the refusal to accept such coverage was made in
19 good faith; and
20 (iii) providing coverage would be consistent with
21 the purposes of this section.
22 (2) Coverage shall not be denied on the basis of a
23 preexisting medical condition.
24 (e) Inpatient care.--Inpatient hospital care shall be
25 provided through the Medicaid program, with primary care
26 physicians making the necessary arrangements for admission to
27 the hospital and necessary specialty care.
28 (f) Uninsured children.--The plan shall be free to all
29 uninsured children whose family income is less than or up to
30 150% of the Federal poverty level, and shall be available on a
19910H0020B0473 - 24 -
1 sliding fee basis to children whose family income is more than
2 150% but less than 200% of the Federal poverty level. Those over
3 200% of the Federal poverty level may purchase coverage for
4 children under the plan at cost. There shall be no copayments or
5 deductibles.
6 (g) Children temporarily without coverage.--The plan shall
7 provide for participation in the program by children who are
8 temporarily without coverage by a health insurance plan, self-
9 insurance health plan or medical assistance.
10 (h) Contracts.--The plan shall have a contractual
11 arrangement with the Department of Public Welfare to receive
12 Federal and State funding under Title XIX for persons who are
13 eligible for medical assistance, and contract with providers who
14 agree to accept the fee established for provision of primary
15 health care to medical assistance recipients as payment in full.
16 (i) Funding.--The plan shall be financed by the health
17 service corporation and hospital plan corporations as defined in
18 40 Pa.C.S. (relating to insurance) in partial fulfillment of
19 their obligation to serve low-income subscribers. The expenses
20 of the plan shall be financed by the health service corporation
21 and hospital plan corporations in proportion to the percentage
22 of premiums of that health service corporation and hospital plan
23 corporations to the total premiums for the Commonwealth health
24 service corporation and hospital plan corporations premiums, but
25 shall not exceed 2% of any health service corporation or
26 hospital plan corporations total annual premiums, excluding
27 administrative costs. Administrative expenses of the plan shall
28 be donated by the respective health service corporation and
29 hospital plan corporations.
30 (j) Insurance cards.--The plan shall provide Blue Cross/Blue
19910H0020B0473 - 25 -
1 Shield cards to those children covered under the plan which
2 shall not specially identify them as low income.
3 (k) Physicians.--The plan shall ensure that there are
4 adequate primary care physicians throughout this Commonwealth to
5 ensure some choice of physicians, availability within a
6 reasonable and convenient travel distance and Statewide
7 coverage.
8 (l) Contracts with providers.--The plan shall contract with
9 any qualified, cost-effective provider, including hospital
10 outpatient departments, HMOs, clinics, group practices and
11 individual practitioners.
12 Section 702. Uninsured workers and adults.
13 (a) Development.--The health service corporation and the
14 hospital plan corporations shall concurrently develop a primary
15 health care insurance plan for adults, equivalent to the
16 Children's Primary Health Care Plan set forth in section 701 for
17 purchase at cost by January 1, 1993. The plan for adults shall
18 make affordable primary health care available to individual
19 Commonwealth residents whose income exceeds Medicaid eligibility
20 guidelines but who are without sufficient means to purchase
21 other health care insurance to cover the costs of health care.
22 (b) Rates.--The Insurance Commissioner shall review the
23 rates for the Primary Health Care Plan for adults and shall
24 ensure that the premium covers all appropriate costs, reserves
25 and administrative costs of the health service corporation and
26 the hospital plan corporations.
27 (c) Cost data.--The health service corporation and the
28 hospital plan corporations shall keep detailed actuarial data on
29 the costs of the adult plan in preparation for its expansion in
30 1993 pursuant to Chapter 11.
19910H0020B0473 - 26 -
1 (d) Premiums.--The health service corporation and the
2 hospital plan corporations shall establish a premium structure
3 for enrollment effective January 1, 1994, which shall be
4 adjusted to reflect the incomes of persons seeking to become
5 enrollees in the program and shall be structured so that
6 individuals whose incomes are insufficient to pay the full
7 premium can participate in the program.
8 (e) Payment by Pennsylvania Health Insurance Partnership
9 Trust Fund.--Effective June 30, 1994, for uninsured employed
10 persons whose income is less than or equal to 200% of the
11 Federal poverty level, the premium shall be paid for qualified
12 persons by the Pennsylvania Health Insurance Partnership Trust
13 Fund, at no expense to the individual. The Insurance Department
14 shall, prior to the commencement of the program, determine a
15 sliding rate schedule for qualified persons whose income exceeds
16 200% of the Federal poverty level.
17 Section 703. Outreach and quality assurance.
18 (a) Public information.--The health service corporation and
19 the hospital plan corporations shall actively publicize both the
20 children's and adults' primary care health plans and shall
21 solicit the assistance of the Commonwealth, health care
22 providers and others in bringing the program to the attention of
23 prospective enrollees.
24 (b) Quality assurance.--The children's and adults' plans
25 shall have an ongoing quality assurance program for its
26 services, as required by the Department of Health and shall have
27 organizational arrangements for referral to supplemental health
28 care and acute hospital care, as required by the Department of
29 Health.
30 (c) Enrollment information.--Commencing January 1, 1994, all
19910H0020B0473 - 27 -
1 employers who do not provide qualifying health care insurance as
2 defined by this act shall provide their employees with
3 enrollment information concerning the Primary Health Care Plan
4 for Adults.
5 CHAPTER 9
6 PENNSYLVANIA HEALTH CARE FUND
7 Section 901. Establishment.
8 There is hereby established in the State Treasury a separate
9 account, to be known as the Pennsylvania Health Care Fund.
10 Section 902. Purpose.
11 Moneys deposited in the fund shall be expended for programs,
12 goods and services which support the provisions of this act for
13 which Federal matching funds are available through Title XIX.
14 Section 903. Administration.
15 The fund shall be administered by the Department of Revenue.
16 The Department of Revenue shall:
17 (1) Collect and distribute the moneys of the fund
18 pursuant to this act.
19 (2) Promulgate rules and regulations for the collection
20 of data and the determination of deposit amounts for the fund
21 and the distribution thereof, as set forth in Chapter 3.
22 Section 904. Assessment.
23 Effective January 1, 1992, every hospital is hereby assessed
24 an amount for the fund, payable at the rate provided in this
25 section. On the last day of September, December, March and June,
26 every hospital shall forward to the Department of Revenue for
27 deposit in the fund an amount equal to one-fourth of four
28 percent of the hospital's net inpatient revenue for the
29 preceding quarter.
30 Section 905. Civil penalty.
19910H0020B0473 - 28 -
1 Any hospital that fails to comply with section 904 shall be
2 liable for a civil penalty of $1,000 per day for each day after
3 the due date that the funds are not deposited. The Secretary of
4 Revenue may waive this penalty for a period not to exceed 30
5 days. In addition, no hospital shall be eligible to receive
6 funds under the Pennsylvania Hospital Fair Share Program until
7 the requirements of this section are met and penalties, if
8 applicable, are paid. Interest on the penalty and the amounts
9 due under section 904 may be applied in accordance with the
10 regulations of the Department of Revenue.
11 Section 906. Financial provisions.
12 (a) Appropriations.--All moneys in the fund are hereby
13 appropriated to the Department of Public Welfare on a continuing
14 basis to carry out the purposes of the fund as described in this
15 act. Federal funds earned as the result of payments under this
16 chapter are likewise appropriated to the Department of Public
17 Welfare on a continuing basis.
18 (b) Reconciliation of payments.--The Department of Public
19 Welfare shall reconcile payments to hospitals made under section
20 304(d), as are necessary on an annual basis. The department
21 shall also ensure that within five working days of the hospital
22 assessment in section 904 every hospital assessed shall receive
23 payments at least equal to the amount assessed that hospital
24 under section 904.
25 (c) Fund administration.--For the purpose of the orderly
26 administration of payments under this act, in any year in which
27 obligations exceed the balance in the fund, the payment of
28 obligations may be carried forward to the following fiscal year.
29 In addition, any funds not expended during a fiscal year shall
30 be retained in the fund and be made available for use during the
19910H0020B0473 - 29 -
1 following fiscal year.
2 CHAPTER 11
3 PENNSYLVANIA HEALTH INSURANCE
4 PARTNERSHIP TRUST FUND
5 Section 1101. Establishment.
6 There is hereby established in the State Treasury a separate
7 account to be known as the Pennsylvania Health Insurance
8 Partnership Trust Fund.
9 Section 1102. Purpose.
10 Moneys deposited in the fund shall be expended for the
11 primary health care program for adults set forth in Chapter 7
12 for uninsured workers and their spouses for whom their employers
13 have paid the tax specified in Chapter 13, but have not received
14 a tax credit pursuant to that chapter.
15 Section 1103. Administration.
16 The fund shall be administered by the Department of Health
17 without liability on the part of the Commonwealth beyond the
18 amounts appropriated or dedicated to the fund and amounts earned
19 by the fund.
20 Section 1104. Composition.
21 The fund shall consist of all taxes collected pursuant to
22 Chapter 13 and all premiums, fees, contributions and other
23 moneys paid into the State Treasury and credited to the fund as
24 is provided in this act; all property and securities acquired by
25 and through the use of moneys belonging to the fund and all
26 interest thereon; less withdrawals from the fund for payments to
27 health care providers for health care services, for
28 administrative expenses, for other expenses authorized under
29 this act and for deposits into the General Fund to reimburse the
30 fund for credits granted under Chapter 13.
19910H0020B0473 - 30 -
1 Section 1105. Trust for enrollees.
2 Moneys deposited in the fund are imposed with a trust for the
3 benefit of the enrollees of any insurance plan administered by
4 the Pennsylvania health insurance partnership and are not
5 subject to appropriation.
6 Section 1106. Miscellaneous provisions.
7 (a) Reserve.--A prudent level of reserve funds shall be
8 maintained to protect the solvency of the trust fund, as shall
9 be determined by the Insurance Commissioner.
10 (b) Separate accounts.--The Department of Health shall
11 maintain separate accounts and segregate funds for the trust.
12 (c) Payment of certain premiums.--Commencing on June 30,
13 1994, all uninsured workers and their spouses who qualify for
14 benefits under the primary health care plan for adults shall be
15 enrolled in the plan with premiums paid for by this fund.
16 (d) Certain Medicaid costs.--The fund shall also pay for all
17 State Medicaid acute hospital costs associated with payment for
18 any qualifying uninsured worker.
19 (e) Eligible employees.--Those uninsured workers who work 20
20 or more hours per week and who have worked for their employer
21 for at least six months shall qualify as well as their spouses
22 for the health care plan set forth in section 702 and the
23 payroll tax requirements in Chapter 13.
24 CHAPTER 13
25 HEALTH INSURANCE PAYROLL TAX
26 Section 1301. Imposition.
27 A payroll tax is imposed on wages in this Commonwealth paid
28 by an employer, other than a governmental unit, to each employee
29 for each taxable year commencing with 1994. A tax is imposed on
30 net earnings in this Commonwealth from self-employment for each
19910H0020B0473 - 31 -
1 taxable year commencing with 1994.
2 Section 1302. Rate.
3 The rate of the tax shall be based on the amount necessary to
4 finance the primary health care for adults in the primary health
5 care plan described in Chapter 11 and the State Medicaid costs
6 for inpatient hospital care for uninsured workers and their
7 spouses receiving primary health care under the plan.
8 Section 1303. Tax credits.
9 (a) Employers.--Commencing in 1994, an employer may take a
10 credit against the tax imposed by section 1301 for each employee
11 who is covered by a qualifying health insurance plan, a spouse's
12 qualifying health insurance plan, self-insurance plan or medical
13 assistance program as defined in this act. The credit shall be
14 equal to the tax paid under this chapter for wages paid by the
15 employer to that employee for any period during which the
16 employee has such qualifying alternative health insurance
17 coverage.
18 (b) Self-employed persons.--Commencing in 1994, a self-
19 employed person who throughout any taxable year is covered by a
20 qualifying health insurance plan, self-insurance health plan or
21 medical assistance program may take a credit in an amount equal
22 to the tax specified in this chapter for his net earnings from
23 self-employment against the tax imposed under section 1301.
24 (c) Regulations.--The Department of Health shall promulgate
25 regulations which define the requirements for a qualifying
26 health insurance plan for this section within six months of the
27 effective date of this act and after a full public hearing.
28 CHAPTER 15
29 SMALL BUSINESS HEALTH INSURANCE TAX CREDIT
30 Section 1501. Eligibility.
19910H0020B0473 - 32 -
1 An employer shall be eligible for a tax credit against any
2 tax due under Article II, III, IV, or VI of the act of March 4,
3 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, and
4 against any payment of estimated tax or payment of tentative tax
5 due on account of said taxes if all of the following conditions
6 are met:
7 (1) The employer has a payroll of nine or fewer
8 employees.
9 (2) When seeking credit for the cost of providing
10 employee health care coverage, the employer has not provided
11 at least 50% of the cost of a health insurance plan which
12 would have met standards established by the Insurance
13 Commissioner for any of the employees of the enterprise in
14 any of the preceding three years, or where seeking credit for
15 the cost of providing dependent coverage, the employer has
16 not provided at least 50% of the cost of a health insurance
17 plan for any of the employees' uninsured dependents in any of
18 the preceding three years.
19 (3) The employer provides health care insurance for the
20 employees, or the employees and their uninsured dependents or
21 the uninsured dependents of the employees.
22 (4) The employer provides a health care benefit plan
23 that meets minimum standards established by the Insurance
24 Commissioner.
25 (5) The employer's health insurance expenditure for the
26 coverage for which credit is sought equals at least 50% of
27 the total cost of the health insurance coverage.
28 (6) The health insurance plan is made available to all
29 of the employees specified by the Department of Health under
30 section 1106(e).
19910H0020B0473 - 33 -
1 Section 1502. Calculation of credit.
2 (a) Beneficiaries.--An eligible employer shall receive a tax
3 credit of a portion of the amount of employers' expenditure for
4 health insurance costs initiated or expanded coverage only for
5 the following beneficiaries:
6 (1) Employees whose average annualized wage is less than
7 150% of the Federal poverty level for a family of four, as
8 published by the United States Department of Health and Human
9 Services.
10 (2) Employees whose average annualized wage is less than
11 150% of the Federal poverty level and their uninsured
12 dependents.
13 (3) Uninsured dependents of employees whose average
14 annualized wage is less than 150% of the Federal poverty
15 level, when coverage previously included only the employees.
16 (b) Credit schedule.--The credit may be claimed in
17 accordance with the following schedule:
18 Percentage of amount Tax year in which
19 of employer's such expenditure was made,
20 expenditure for and for which the tax
21 health insurance credit is claimed
22 costs
23 40% The tax year commencing on
24 or after January 1, 1992.
25 30% The tax year commencing on
26 or after January 1, 1993.
27 20% The tax year commencing on
28 or after January 1, 1994.
29 (c) Availability of credit.--Tax credits shall be available
30 in years following the first year in which coverage is initiated
19910H0020B0473 - 34 -
1 or expanded, only if the employer continues to offer it in the
2 following two years. No employer shall be eligible for a tax
3 credit for more than the three tax years specified in subsection
4 (b).
5 Section 1503. Rules and regulations.
6 The Department of Revenue and the Insurance Department shall:
7 (1) Promulgate any rules and regulations which may be
8 required to implement this chapter.
9 (2) Publish as a notice in the Pennsylvania Bulletin, no
10 later than January 1, of the year following the effective
11 date of this act, forms upon which taxpayers may apply for
12 the tax credit authorized by this chapter.
13 Section 1504. Reports to General Assembly.
14 Within five months after the close of any tax year for which
15 tax credits granted pursuant to this chapter were used, the
16 Insurance Department and the Department of Revenue shall furnish
17 to the General Assembly a report providing the number of
18 employers who used credits during the preceding tax year, the
19 number of employees and dependents receiving new health care
20 coverage and the amount of tax credits granted.
21 CHAPTER 17
22 ACCESS TO HEALTH CARE
23 Section 1701. Discrimination prohibited.
24 (a) General rule.--No health care provider in this
25 Commonwealth shall discriminate against any person based on that
26 person's enrollment in or eligibility for medical assistance, or
27 otherwise based upon a person's source of payment for health
28 care.
29 (b) Definition.--For purposes of this section,
30 "discriminate" shall include, but not be limited to, the
19910H0020B0473 - 35 -
1 following actions:
2 (1) The refusal to provide health or medical care or
3 services, diagnosis or treatment which the health care
4 provider is qualified to provide.
5 (2) The segregation of medical assistance patients from
6 other patients with respect to office or health service
7 facilities.
8 (3) The rendering of inferior medical or health care
9 services.
10 Section 1702. Health maintenance organizations.
11 (a) Fair share of medical assistance subscribers.--Within
12 six months of the effective date of this act, each health
13 maintenance organization shall enter into an agreement with the
14 department to enroll as subscribers individuals who are eligible
15 to receive medical assistance benefits. A health maintenance
16 organization that receives its certificate of authority after
17 the effective date of this act shall enter into an agreement
18 with the department under this section before the end of the
19 health maintenance organization's second year of operation in
20 this Commonwealth. All health maintenance organizations shall
21 agree to accept as enrollees a fair share of medical assistance
22 recipients. A "fair share" of medical assistance subscribers for
23 purposes of this section shall be defined as the same ratio of
24 medical assistance recipients to general population in the
25 health maintenance organization's service area as enrolled
26 medical assistance subscribers to the total health maintenance
27 organization enrollment or 25%, whichever is less. Within three
28 years of the effective date of the contract between the
29 department and the health maintenance organization, the health
30 maintenance organization shall have enrolled or have attempted
19910H0020B0473 - 36 -
1 to enroll its fair share of medical assistance subscribers.
2 (b) County percentages.--The department shall publish
3 annually in the Pennsylvania Bulletin notice of the county
4 percentage of medical assistance recipients for each county and
5 shall assist health maintenance organizations in determining the
6 number of medical assistance subscribers necessary to constitute
7 its fair share.
8 (c) Approval of capitated rate.--The capitated rate
9 contained in the agreement between the health maintenance
10 organization and the department is subject to the approval of
11 the Insurance Commissioner in accordance with section 10 of the
12 act of December 29, 1972 (P.L.1701, No.364), known as the Health
13 Maintenance Organization Act. The rate shall not exceed 100% of
14 the fee-for-service medical assistance cost in each county
15 served by the health maintenance organization. In the event the
16 Insurance Commissioner finds that the proposed rate is
17 insufficient to meet the costs of the health maintenance
18 organization, the Secretary of Public Welfare shall waive the
19 limit on the capitation rate, renegotiate the agreement with the
20 health maintenance organization to address the concerns of the
21 Insurance Commissioner or grant an exception to the health
22 maintenance organization from the fair share requirements of
23 this act.
24 (d) Separate systems.--Unless authorized by the department,
25 after consultation with the Medical Assistance Advisory
26 Committee, a health maintenance organization shall not establish
27 separate systems of care for its medical assistance subscribers.
28 (e) Waiver of requirements.--The department may grant a
29 waiver of the requirements of this section if it finds that the
30 health maintenance organization has made and continues to make a
19910H0020B0473 - 37 -
1 good faith effort to obtain a fair share of medical assistance
2 subscribers, but is unable to reach or maintain that percentage.
3 Section 1703. Continuity on replacement of a group policy.
4 (a) Policies subject to this section.--This section applies
5 to all group health insurance policies, except group long-term
6 care policies or group long-term disability policies, issued by
7 insurers or health maintenance organizations doing business in
8 this Commonwealth to policyholders who are obtaining coverage to
9 replace coverage under a different contract or policy.
10 (b) Continuity of coverage.--The replacement policy issued
11 to replace the prior contract or policy shall provide continuity
12 of coverage to all persons who were covered under the replaced
13 contract or policy at any time during the 90 days before the
14 discontinuance of the replaced contract or policy.
15 (c) Prohibition against discontinuity.--In a replacement
16 policy subject to this section, an insurer or health maintenance
17 organization may not, for any person described in section 1704:
18 (1) request that the person provide or otherwise seek to
19 obtain evidence of insurability;
20 (2) decline to enroll the person on the basis of
21 evidence of insurability if the person is otherwise eligible
22 for coverage; or
23 (3) impose a preexisting condition exclusion period or
24 waiting period on that person, except as provided in the
25 section.
26 (d) Person covered for fewer than 90 continuous days.--
27 Notwithstanding subsection (c), a person who was covered under
28 the replaced contract or policy for fewer than 90 continuous
29 days may be subject to a preexisting condition exclusion or
30 waiting period in the replacement policy, provided the period is
19910H0020B0473 - 38 -
1 not longer than 90 days, and credit is given for satisfaction or
2 partial satisfaction of the same or similar provisions under the
3 replaced contract or policy.
4 (e) Liability after discontinuance.--The entity, insurer or
5 health maintenance organization that issued the replaced
6 contract or policy is liable after discontinuance of that
7 contract or policy only to the extent of its accrued liabilities
8 and extensions of benefits.
9 Section 1704. Continuity for individual who changes groups.
10 (a) Application.--This section applies to all group health
11 policies issued by insurers or health maintenance organizations,
12 except group long-term care policies and group disability
13 coverage.
14 (b) Persons provided continuity of coverage.--This section
15 provides continuity of coverage for a person who seeks coverage
16 under a group insurance or health maintenance organization
17 policy if:
18 (1) That person was covered under an individual or group
19 contract or policy issued by an insurer, health maintenance
20 organization, or governmental program such as Medicaid or
21 Medicare.
22 (2) Coverage under the prior contract or policy
23 terminated within three months before the date the person
24 enrolls or is eligible to enroll in the succeeding policy. A
25 period of ineligibility for any health plan imposed by terms
26 of employment may not be considered in determining whether
27 the coverage ended within three months of the date the person
28 enrolls or would otherwise be eligible to enroll.
29 (c) Prohibition against discontinuity.--Except as provided
30 in this section, in a group policy subject to this section, an
19910H0020B0473 - 39 -
1 insurer or health maintenance organization must, for any person
2 described in subsection (b), waive any medical underwriting or
3 preexisting conditions exclusion to the extent that benefits
4 would have been payable under a prior contract or policy if the
5 prior contract or policy were still in effect. The succeeding
6 policy is not required to duplicate any benefits covered by the
7 prior contract or policy.
8 (d) Determination of benefits.--When a determination of
9 benefit under the prior contract or policy is required, the
10 issuer of the prior contract or policy shall, at the request of
11 the issuer of the succeeding policy, furnish a statement of
12 benefits available or pertinent information sufficient to permit
13 verification of the benefit determination or the determination
14 itself by the issuer of the succeeding policy. For purposes of
15 this section, benefits of the prior contract or policy are
16 determined in accordance with the definitions, conditions and
17 covered expense provisions of that contract or policy rather
18 than those of the succeeding policy. The benefit determination
19 must be made as if coverage had not been replaced.
20 Section 1705. Limitations on exclusions and waiting periods.
21 (a) Application.--This section applies to any individual or
22 group health insurance policy or contract either with an insurer
23 or health maintenance organization, except long-term care
24 policies or long-term disability policies.
25 (b) Exclusions for certain factors.--No group or individual
26 health insurance policy written in this Commonwealth may exclude
27 or use waivers or riders of any kind to exclude, limit or reduce
28 coverage or benefits for a specifically named or described
29 preexisting disease or physical condition, beyond the waiting
30 period defined in this act.
19910H0020B0473 - 40 -
1 (c) Preexisting conditions.--No group health policy,
2 contract or certificate shall exclude a member of that group who
3 has applied for coverage, except that coverage can be denied for
4 a preexisting condition within the waiting period for new
5 enrollees, as is defined in section 1706, for those not
6 qualifying for continuity of benefits under this act.
7 (d) Permitted exclusion.--An individual policy issued by an
8 insurer may not impose a preexisting condition exclusion or
9 waiting period except as defined in section 1706.
10 Section 1706. Waiting period for preexisting conditions.
11 No group or individual health policy, certificate or contract
12 may deny coverage for an enrollee for a preexisting condition
13 except as follows:
14 (1) Preexisting medical conditions occurring within
15 three months of the effective date of coverage or enrollment
16 in the group.
17 (2) Preexisting medical conditions for which the
18 enrollee has received treatment within three months of the
19 effective date of coverage on the enrollee or enrollment in
20 the group.
21 (3) In no event may there be an exclusion of coverage
22 for a group or individual enrollee for any condition or
23 disease covered by the policy, certificate or contract after
24 that enrollee or insured has been enrolled or insured for 12
25 continuous months.
26 Section 1707. Enforcement.
27 (a) Authority of department.--The department shall exercise
28 all powers necessary and appropriate to enforce this chapter,
29 including, but not limited to, the following powers:
30 (1) To require health care providers to enter into
19910H0020B0473 - 41 -
1 provider agreements with the department.
2 (2) To monitor and enforce health care provider
3 participation in the medical assistance program.
4 (3) To recommend to the appropriate licensing authority
5 the suspension or revocation of a health care provider's
6 license for violations of this act.
7 (b) Penalties.--
8 (1) Any individual alleging discrimination under this
9 chapter may file a civil cause of action in a court of
10 competent jurisdiction against a health care provider alleged
11 to be in violation of this chapter. If the health care
12 provider is found to have violated this chapter the court may
13 assess attorney fees, cost and penalties against the health
14 care provider in addition to any monetary compensation to the
15 plaintiff. A judgment against a health care provider shall be
16 referred by the court to the appropriate professional
17 licensing authority or regulatory agency.
18 (2) (i) Any health maintenance organization that
19 violates the provisions of this chapter shall be subject
20 to a civil penalty equal to 2% of the annual premiums of
21 the HMO or the HMO's average rate per member multiplied
22 by the number of individuals that the HMO has failed to
23 enroll under the fair share provisions of this chapter,
24 whichever is greater. This penalty shall be deposited in
25 the Pennsylvania Health Care Fund. The penalty shall be
26 levied by the department, annually, when it concludes
27 that the HMO did not make a good faith effort to enroll
28 the minimum number of medical assistance subscribers
29 required by this chapter.
30 (ii) Any HMO found to have violated the provisions
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1 of this chapter shall have the right to appeal such a
2 determination to the Secretary of Public Welfare in the
3 manner provided in Title 2 of the Pennsylvania
4 Consolidated Statutes (relating to administrative law and
5 procedure).
6 (3) Any individual alleging discrimination under this
7 chapter may file a civil cause of action in a court of
8 competent jurisdiction against a health maintenance
9 organization or group insurers alleged to be in violation of
10 this chapter. If the health maintenance organization or group
11 insurers is found to have violated this chapter the court may
12 assess attorney fees, cost and penalties against the health
13 maintenance organization or group insurers in addition to any
14 monetary compensation to the plaintiff. A judgment against a
15 health maintenance organization or group insurers shall be
16 referred by the court to the appropriate professional
17 licensing authority or regulatory agency.
18 CHAPTER 19
19 STUDIES AND HEARINGS ON HEALTH CARE
20 Section 1901. Hospital uncompensated charity care study.
21 (a) Charity care data.--The Health Care Cost Containment
22 Council shall collect each year commencing with the calendar
23 year beginning January 1, 1992, the following charity care data
24 from all acute care hospitals licensed in this Commonwealth:
25 (1) Catastrophic inpatient and outpatient costs which
26 are defined as the allowable audited costs of services
27 provided to persons above 150% of the poverty level, with an
28 unpaid personal liability greater than annual family income,
29 less an amount equivalent to 150% of the Federal poverty
30 level. Such amount must be net, following reasonable
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1 collection procedures, consistently applied, and may not
2 include any costs or services for which reimbursement could
3 have been secured from the medical assistance or Medicare
4 program or other third-party payor, nor any costs or services
5 rendered by a hospital in fulfillment of any charity care
6 obligation funding from foundations or Federal or State
7 sources including funding under the Hill-Burton program.
8 (2) Medical assistance which is defined as the inpatient
9 and outpatient patient-pay amount for medical assistance
10 recipients which has been unable to be collected following
11 reasonable collection procedures, consistently applied.
12 (3) Underinsured inpatient charity care which is defined
13 as the allowable audited cost of services provided to
14 uninsured persons below 150% of the Federal poverty level,
15 following reasonable collection procedures, consistently
16 applied. Such amount may not include payment for goods or
17 services which could have been reimbursed under the Medicaid
18 or Medicare program or other third-party payor, nor any costs
19 or services rendered by a hospital in fulfillment of any
20 charity care obligation funding from foundations or Federal
21 or State sources including funding under the Hill-Burton
22 program.
23 (4) Uninsured inpatient charity care which is defined as
24 the allowable audited cost of services provided to persons
25 without public or private insurance coverage, with income
26 below 150% of the poverty level, following reasonable
27 collection procedures, consistently applied. Such amount may
28 not include payment for goods or services which could have
29 been reimbursed under the Medicaid or Medicare program or
30 other third-party payor, nor any costs or services rendered
19910H0020B0473 - 44 -
1 by a hospital in fulfillment of any charity care obligation
2 funding from foundations or Federal or State sources
3 including funding under the Hill-Burton program.
4 (b) Recommendations to General Assembly.--Commencing March
5 1, 1993, and every March 1 thereafter, the council shall submit
6 recommendations to the Governor and the General Assembly as to
7 whether a source of funding is required for uncompensated
8 charity care provided by acute care hospitals in this
9 Commonwealth. These recommendations shall be based on data
10 collection for uncompensated charity care as defined in this
11 section for the preceding calendar year.
12 (c) Annual hearings of the General Assembly.--The Health and
13 Welfare Committee of the House of Representatives and the Public
14 Health and Welfare Committee of the Senate shall hold annual
15 joint public hearings in each region to review the council's
16 recommendations for the level of funding required for charity
17 care.
18 Section 1902. Medicaid reimbursement.
19 (a) Joint hearings.--The Health and Welfare Committee of the
20 House of Representatives and the Public Health and Welfare
21 Committee of the Senate shall hold joint public hearings in each
22 region of this Commonwealth to review the adequacy of payments
23 to providers under the medical assistance program.
24 (b) Joint Select Committee on Medicaid Reimbursement
25 Procedures.--The President pro tempore of the Senate and the
26 Speaker of the House of Representatives shall appoint members to
27 a Joint Select Committee to study the feasibility of
28 implementing material improvements in the processing of claims
29 for medical assistance reimbursements to providers, and in the
30 use of Pennsylvania Medical Assistance by it's low-income
19910H0020B0473 - 45 -
1 citizens. The study shall include, but not be limited to, the
2 following:
3 (1) The cost-effectiveness of contracting the entire
4 Medicaid reimbursement process to a fiscal intermediary, such
5 as Blue Cross/Blue Shield.
6 (2) Explanation sections in all claim forms so that they
7 contain a clear description in English of the applicable
8 codes and messages in order that providers and recipient's
9 can respond to or complete the form.
10 (3) Additional staffing of the 800 telephone number so
11 that providers and beneficiaries can verify eligibility to
12 receive benefits, inquire as to applicable eligibility
13 requirements and coverage restrictions, and receive a
14 verification number as to preclude denial for reasons
15 inconsistent with the information received by telephone.
16 (4) Development of a special training for providers,
17 identifying those parts of the claim forms with the greatest
18 incidence of error and explaining how to avoid such errors.
19 (5) Submission of claims by providers on floppy disks,
20 tape to tape billing or telecommunications.
21 (6) Development of computer software that will
22 automatically identify errors by validity edit which verifies
23 that the data entered into any field or claim line on a claim
24 is appropriate for that field or claim line.
25 (7) Rewriting the provider handbook and reorganizing
26 provider bulletins on a regular basis to make these documents
27 more understandable and usable.
28 (c) Reports.--Each committee shall issue a report by
29 December 31, 1992, and the General Assembly shall enact
30 legislation, if necessary, to adjust medical assistance provider
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1 reimbursement to comply with Federal requirements and to
2 implement changes in Medicaid reimbursement procedures.
3 Section 1903. Study of generic substitutes for brand name
4 prescriptions.
5 The Department of Health shall study the cost and
6 effectiveness of generic substitutes for brand name
7 prescriptions and determine what legislative, administrative and
8 regulatory measures can be taken to increase the appropriate use
9 of those substitutes. The Department of Health shall file the
10 report of this study with the General Assembly and the Governor
11 no later than 180 days after the effective date of this act.
12 Section 1904. Cost of mandated health benefits.
13 (a) Content of study.--The Health Care Cost Containment
14 Council, through its Mandated Benefits Review Panel, is directed
15 to study the costs and effectiveness of existing mandated health
16 benefits to businesses. For each of the existing mandated health
17 benefits, the review panel shall determine the financial impact
18 and health care effectiveness of the existing benefit, including
19 at least:
20 (1) The number of persons utilizing the existing
21 benefit.
22 (2) The extent to which elimination of the existing
23 benefit as a mandated health benefit would result in
24 inadequate health care for the population of this
25 Commonwealth.
26 (3) The cost-effectiveness of the existing benefit in
27 reducing further more costly medical procedures.
28 (4) The impact of the existing benefit on the total cost
29 of health care within this Commonwealth.
30 (5) The impact of the existing benefit on health
19910H0020B0473 - 47 -
1 insurance costs of health care purchasers.
2 (6) The impact of the existing benefit on administrative
3 expenses of health care insurers.
4 (7) The extent to which elimination of the existing
5 benefit as a mandated health benefit would result in
6 increased medical assistance expenditures and charity care.
7 (8) The extent to which elimination of the existing
8 benefit as a mandated health benefit could be paid for by the
9 person receiving the existing benefit.
10 (9) The impact of the existing benefit on the ability of
11 small businesses to purchase health insurance for their
12 employees and on the ability of self-employed persons to
13 purchase health insurance.
14 (b) Findings and recommendations.--The review panel shall
15 issue a report to the council by June 30, 1992, outlining their
16 findings on the costs and effectiveness of the existing mandated
17 health benefits. After review of the panel's report, the council
18 shall submit a final report to the Governor and the General
19 Assembly by December 31, 1992, outlining their findings on the
20 costs and effectiveness of the existing mandated health benefits
21 and recommendations as to whether any or all existing mandated
22 health benefits should be eliminated.
23 Section 1905. Physician acceptance of medical assistance
24 patients.
25 The council shall, for all providers within this Commonwealth
26 and within the appropriate regions and subregions within this
27 Commonwealth, prepare and issue quarterly reports that provide
28 information on the number of physicians, by speciality, on the
29 staff of each hospital or ambulatory service facility and the
30 number and names of those physicians, by specialty, on the staff
19910H0020B0473 - 48 -
1 that accept medical assistance patients.
2 Section 1906. Subsidies provided by health service corporation
3 and hospital plan corporations.
4 The health service corporation and hospital plan corporations
5 presently are exempt from paying the 2% premium tax. In lieu of
6 this exemption, and as part of their obligation to serve low-
7 income subscribers, the health service corporation and hospital
8 plan corporations shall submit annually, commencing on January
9 31, 1992, to the Department of Health and the Department of
10 Insurance data documenting their subsidies to health care
11 purchasers that they provide in lieu of their exemption from the
12 2% premium tax. In submitting this data, the health service
13 corporation and hospital plan corporations shall indicate which
14 subsidies are based on the income of the health care purchaser
15 or beneficiary.
16 CHAPTER 31
17 MISCELLANEOUS PROVISIONS
18 Section 3101. Persons eligible for medical assistance.
19 (a) General rule.--In addition to those persons described in
20 section 441.1(1) and (2) of the act of June 13, 1967 (P.L.31,
21 No.21), known as the Public Welfare Code, the following persons
22 shall also be eligible for medical assistance under that act:
23 (1) Medically needy persons, whose income eligibility
24 levels shall be no lower than 133.3% of the highest Aid To
25 Families with Dependent Children grant paid in the State.
26 (2) Pregnant women and infants whose family income is at
27 or less than 185% of the Federal determined poverty level.
28 (3) Children under eight years of age whose family
29 income is less than 100% of the Federally-determined poverty
30 level.
19910H0020B0473 - 49 -
1 (b) Additional eligibility.--For purposes of this section
2 and section 441.1 of the Public Welfare Code, all recipients
3 (including medically needy recipients) and recipients of the
4 State blind pension shall be entitled to all the medical
5 assistance benefits available to persons deemed categorically
6 needy as provided for in section 441.1(1) of the Public Welfare
7 Code except dental care. The Healthy Horizon resource level
8 shall be increased to the maximum permitted under Federal law.
9 Section 3102. Mandated coverage.
10 (a) Health care providers.--All insurance companies writing
11 group accident and sickness insurance in this Commonwealth shall
12 by January 1, 1993, offer in every area in which they write such
13 insurance, a policy or policies meeting all State mandated
14 coverage, but which utilize only those health care providers in
15 that area which are the most cost effective and provide good
16 quality health care. In selecting the health care providers, the
17 insurance companies shall utilize the date produced by the
18 council and other relevant data to design the insurance
19 products.
20 (b) Approval.--All such policies shall be approved by the
21 Department of Health and the Insurance Department to assure that
22 the policies provide for adequate urgent and emergency care from
23 other health providers, should that be needed and to ensure
24 sufficient numbers and types of health care providers.
25 Section 3103. Group accident and sickness insurance.
26 In addition to the provisions of section 621.2(a)(3) of the
27 act of May 17, 1921 (P.L.682, No.284), known as The Insurance
28 Company Law of 1921, group accident and sickness insurance shall
29 also include insurance under policies issued to the trustees of
30 a fund established by any two or more employers or by an insurer
19910H0020B0473 - 50 -
1 licensed in this Commonwealth.
2 Section 3104. Construction and application of Chapters 3 and 9.
3 (a) Construction of chapters.--
4 (1) Chapters 3 and 9 shall not be construed to create
5 any legally enforceable right or entitlement to payment for
6 services on the part of any medically indigent person or any
7 right of entitlement to payment of any particular rate by any
8 hospital, other provider of medical services or other person.
9 (2) Chapters 3 and 9 shall not be construed to relieve
10 any hospital of its obligations under the Hill-Burton Act (60
11 Stat. 1040, 42 U.S.C. § 291 et seq.) or under any other
12 similar Federal or State law or agreement to provide
13 unreimbursed care to medically indigent persons.
14 (b) Application of chapters.--Chapters 3 and 9 shall apply
15 only upon publication of notice in the Pennsylvania Bulletin by
16 the Secretary of Public Welfare that the United States
17 Department of Health and Human Services has approved the
18 amendment of Pennsylvania's State Plan for Medical Assistance as
19 set forth by the provisions of this act.
20 Section 3105. Repeals.
21 (a) Specific.--Section 441.1(3) of the act of June 13, 1967
22 (P.L.31, No.21), known as the Public Welfare Code, is repealed.
23 (b) General.--All other acts and parts of acts are repealed
24 insofar as they are inconsistent with this act.
25 Section 3106. Expiration of act.
26 This act shall expire December 31, 1999, unless reenacted by
27 the General Assembly.
28 Section 3107. Effective date.
29 This act shall take effect in 60 days.
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