PRINTER'S NO. 3959
No. 2849 Session of 1996
INTRODUCED BY GANNON, HENNESSEY, KING, CHADWICK, TRELLO, BELARDI
AND KUKOVICH, JULY 1, 1996
REFERRED TO COMMITTEE ON JUDICIARY, JULY 1, 1996
AN ACT
1 Amending Title 42 (Judiciary and Judicial Procedure) of the
2 Pennsylvania Consolidated Statutes, providing for wrongful
3 denial of reimbursement for medically necessary treatment.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Title 42 of the Pennsylvania Consolidated
7 Statutes is amended by adding a section to read:
8 § 8371.1. Wrongful denial of reimbursement for medically
9 necessary treatment.
10 (a) Elements of the action.--Any insurer who issues a health
11 insurance policy or network that fails to provide coverage and
12 reimbursement for medically necessary treatment, care and
13 services based upon the standards in this section shall be
14 liable to a licensed health care provider for wrongful denial of
15 reimbursement for medically necessary treatment. Notwithstanding
16 any provision of law to the contrary, any health insurance
17 policy which is delivered, issued for delivery, renewed,
18 extended or modified in this Commonwealth by any health care
1 insurer, automobile insurer, workers' compensation insurer,
2 health maintenance organization, preferred provider
3 organization, managed care organization or self-insured employer
4 and any person that establishes, operates or maintains a network
5 of participating providers shall provide that the benefits
6 applicable under the policy or network include coverage for and
7 reimbursement to licensed health care providers for medically
8 necessary treatment, care and services. Nothing in this section
9 shall, however, require an insurance company to pay for any
10 treatment expressly and lawfully excluded by a health insurance
11 policy.
12 (b) Damages.--When the elements of an action for wrongful
13 denial of reimbursement for medically necessary treatment have
14 been established as provided in this section, the adversely
15 affected licensed health care provider shall be entitled to
16 compensation for the cost of the treatment plus 12% interest and
17 to payment of treble damages, as well as the costs of the
18 challenge and all attorney fees.
19 (c) Definitions.--
20 The following words and phrases when used in this section
21 shall have the meanings given to them in this subsection unless
22 the context clearly indicates otherwise:
23 "Health insurance policy." Any group health insurance
24 policy, contract or plan which provides medical or health care
25 coverage by any health care facility or licensed health care
26 provider on an expense-incurred, service or prepaid basis and
27 which is offered by or is governed under any of the following:
28 Act of June 2, 1915 (P.L.736, No.338), known as the
29 Workers' Compensation Act.
30 Act of May 17, 1921 (P.L.682, No.284), known as The
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1 Insurance Company Law of 1921.
2 Article X of the act of May 17, 1921 (P.L.789, No.285),
3 known as The Insurance Department Act of 1921.
4 Subarticle (f) of Article IV of the act of June 13, 1967
5 (P.L.31, No.21) known as the Public Welfare Code.
6 Act of December 29, 1972 (P.L.1701, No.364), known as the
7 Health Maintenance Organization Act.
8 Act of May 18, 1976 (P.L.123, No.54), known as the
9 Individual Accident and Sickness Insurance Minimum Standards
10 Act.
11 Act of December 14, 1992 (P.L.835, No.134), known as the
12 Fraternal Benefit Societies Code.
13 A nonprofit corporation subject to 40 Pa.C.S. Chs. 61
14 (relating to hospital plan corporations) and 63 (relating to
15 professional health services plan corporations).
16 75 Pa.C.S. Ch. 17 (relating to financial responsibility).
17 An employee welfare benefit plan as defined in section 3
18 of the Employee Retirement Income Security Act of 1974
19 (Public Law 93-406, 88 Stat. 829) or an agreement by a self-
20 insured employer or self-insured multiple employer trust to
21 provide health care benefits to employees and their
22 dependents.
23 Any other applicable law.
24 "Licensed health care provider." A physician or other person
25 appropriately licensed by the Bureau of Professional and
26 Occupational Affairs in the Department of State to provide
27 health care services. The term includes a licensed health care
28 facility.
29 "Medical necessity" or "medically necessary." Diagnostic
30 services needed to clarify or confirm a diagnosis or therapeutic
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1 treatment, care or services reasonably expected to improve,
2 restore or prevent the worsening of any illness, injury,
3 disease, disability, defect or condition or the functioning of
4 any body member. Such care, services or treatment must be all of
5 the following:
6 (1) Consistent with the individual patient's condition
7 or conditions.
8 (2) Furnished in a setting appropriate to the patient's
9 medical need and condition.
10 (3) Provided by or under the supervision of a licensed
11 health care provider.
12 (4) Documented in the patient's record in a reasonable
13 manner, including the relationship of the diagnosis to the
14 treatment.
15 (5) Not solely for purposes of experiment, research or
16 education.
17 A determination of medical necessity pursuant to any peer review
18 or utilization review must take into consideration all relevant
19 clinical data pertaining to the patient's condition as a whole
20 which has been provided to the reviewer prior to the
21 determination. A final determination of medical necessity shall
22 be made only by a health care provider licensed by the
23 Commonwealth in the same profession and having the same
24 specialty as the provider whose treatment, care or service is
25 subject to review.
26 Section 2. The addition of 42 Pa.C.S. § 8371.1 shall apply
27 to all health insurance policies, subscriber contracts and group
28 insurance certificates issued under any group master policy,
29 delivered or issued for delivery on or after the effective date
30 of this act. Section 8371.1 shall also apply to all renewals of
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1 contracts or any renewal date which is on or after the effective
2 date of this act and to any network of participating providers
3 which provide health care services.
4 Section 3. This act shall take effect in 60 days.
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