PRIOR PRINTER'S NOS. 1083, 3393 PRINTER'S NO. 3471
No. 977 Session of 1997
INTRODUCED BY VANCE, DRUCE, MICOZZIE, COLAFELLA, SAYLOR, WAUGH,
CURRY, COLAIZZO, YOUNGBLOOD, SEMMEL, SCHRODER, HENNESSEY,
TIGUE, ALLEN, GORDNER, NICKOL, KENNEY, MUNDY, E. Z. TAYLOR,
TRICH, HARHART, D. W. SNYDER, MANDERINO, RUBLEY, CARONE,
BUNT, ITKIN, TRUE, PESCI, STEELMAN, DeLUCA, CLYMER, CORNELL,
JOSEPHS, BOSCOLA, STURLA, BARD, OLASZ, MILLER, L. I. COHEN,
SATHER, GEORGE, O'BRIEN, FLEAGLE, BUXTON, STRITTMATTER,
MICHLOVIC, STERN, TULLI, HALUSKA, BROWNE, OLIVER, McGILL,
THOMAS, BEBKO-JONES, TRELLO, BELFANTI, GRUPPO, BOYES, ROSS,
RAMOS, BARRAR, ZUG, ORIE, DENT, SEYFERT, BAKER, McNAUGHTON
AND SCRIMENTI, MARCH 19, 1997
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
APRIL 27, 1998
AN ACT
1 Providing for managed health care utilization review; imposing
2 duties on managed care entities; providing for disclosure,
3 civil immunity and penalties; and conferring powers and
4 duties on the Department of Health and the Insurance
5 Department.
6 TABLE OF CONTENTS
7 Section 1. Short title. <--
8 Section 2. Purpose.
9 Section 3. Definitions.
10 Section 4. Certification of utilization review entity.
11 Section 5. Utilization review operational standards.
12 Section 6. Initial utilization review decisions.
13 Section 7. Internal appeals.
14 Section 8. Independent external review process.
1 Section 9. Participating providers.
2 Section 10. Provider credentialing.
3 Section 11. Uniform disclosure.
4 Section 12. Prompt payment of clean claims.
5 Section 13. Investigations and penalties.
6 Section 14. Regulations.
7 Section 15. Exceptions.
8 Section 16. Applicability.
9 Section 17. Discrimination on moral or religious grounds
10 prohibited.
11 Section 18. Effective date.
12 SECTION 1. SHORT TITLE. <--
13 SECTION 2. PURPOSE.
14 SECTION 3. DEFINITIONS.
15 SECTION 4. CERTIFICATION OF UTILIZATION REVIEW ENTITY.
16 SECTION 5. UTILIZATION REVIEW OPERATIONAL STANDARDS.
17 SECTION 6. INITIAL UTILIZATION REVIEW DECISIONS.
18 SECTION 7. INTERNAL APPEALS.
19 SECTION 8. INDEPENDENT EXTERNAL REVIEW PROCESS.
20 SECTION 9. PARTICIPATING PROVIDERS.
21 SECTION 10. PROVIDER CREDENTIALING.
22 SECTION 11. UNIFORM DISCLOSURE.
23 SECTION 12. PROMPT PAYMENT OF CLEAN CLAIMS.
24 SECTION 13. CONSUMER INFORMATION.
25 SECTION 14. INVESTIGATIONS, PENALTIES AND SANCTIONS.
26 SECTION 15. REGULATIONS.
27 SECTION 16. EXCEPTIONS.
28 SECTION 17. APPLICABILITY.
29 SECTION 18. DISCRIMINATION ON MORAL OR RELIGIOUS GROUNDS
30 PROHIBITED.
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1 SECTION 19. EFFECTIVE DATE.
2 The General Assembly of the Commonwealth of Pennsylvania
3 hereby enacts as follows:
4 Section 1. Short title.
5 This act shall be known and may be cited as the Managed Care
6 Accountability Act.
7 Section 2. Purpose.
8 The purposes of this act are to:
9 (1) Promote the delivery of accessible, quality and
10 cost-effective health care in a timely fashion in this
11 Commonwealth.
12 (2) Promote cooperation among health care providers,
13 patients and health care insurers.
14 (3) Provide for the certification of and standards to be
15 used by utilization review entities.
16 (4) Establish a process for health care providers to
17 appeal denials based on medical necessity and
18 appropriateness.
19 (5) Require the establishment, use and disclosure of
20 provider credentialing standards.
21 (6) Require uniform format and disclosure of the terms
22 and conditions of health care insurer contracts.
23 Section 3. Definitions.
24 The following words and phrases when used in this act shall
25 have the meanings given to them in this section unless the
26 context clearly indicates otherwise:
27 "Active clinical practice." The practice of clinical
28 medicine by a health care practitioner for an average of not
29 less than 20 hours per week.
30 "Clean claim." As defined in section 1816(c)(2)(B)(i) of the
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1 Social Security Act (49 Stat. 648, 42 U.S.C. §
2 1395h(c)(2)(B)(i)) which has no defect or impropriety. A defect
3 or impropriety under this definition includes lack of required
4 substantiating documentation or a particular circumstance
5 requiring special treatment which prevents timely payments from
6 being made on the claim.
7 "Clinical review criteria." Written screening procedures,
8 decision abstracts, clinical protocols and practice guidelines
9 used by a utilization review entity to evaluate the medical
10 necessity and appropriateness of health care services delivered
11 or proposed to be delivered.
12 "Concurrent utilization review." A review by a utilization
13 review entity of all necessary supporting information which
14 occurs during an enrollee's hospital stay or course of treatment
15 and which results in a decision to approve or deny payment for a
16 health care service.
17 "Credentialing criteria." The standards used by a managed
18 care entity to evaluate the qualifications of a health care
19 practitioner or health care facility to participate in the
20 managed care entity's provider networks.
21 "Denial." A determination by a managed care entity or
22 utilization review entity which is based upon the medical
23 necessity and appropriateness of health care services covered
24 under the terms and conditions of the contract which are
25 prescribed, provided or proposed to be provided and which:
26 (1) disapproves payment for a requested health care
27 service completely;
28 (2) approves the provision of a requested health care
29 service for a lesser scope or duration than requested by a
30 health care practitioner or health care facility; or
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1 (3) disapproves payment for the provision of a requested
2 health care service but approves payment for the provision of
3 an alternative health care service.
4 "Department." The Department of Health of the Commonwealth.
5 "Emergency medical condition." The sudden onset of a medical
6 or psychiatric condition which manifests itself by acute
7 symptoms of a sufficient severity or severe pain such that a
8 prudent layperson who possesses an average knowledge of health
9 and medicine could reasonably expect absence of immediate
10 medical attention to result in:
11 (1) placing the health of the individual or, with
12 respect to a pregnant woman, the health of the woman or her
13 unborn child in serious jeopardy;
14 (2) serious impairment to bodily functions; or
15 (3) serious dysfunction of a bodily organ or part.
16 "Emergency health care services." Health care services which
17 are furnished by a provider as a result of an emergency medical
18 condition.
19 "Enrollee." A policy holder, subscriber, covered person or
20 other individual, including a dependent, entitled to receive
21 health care coverage under a managed care entity's insurance
22 policy or contract issued in this Commonwealth.
23 "Health care facility." A facility providing clinically
24 related health care services. The term includes a general or
25 special hospital, a psychiatric hospital, a rehabilitation
26 hospital, an ambulatory surgical facility, a long-term NURSING <--
27 care facility, a cancer treatment center using radiation therapy
28 on an ambulatory basis, a birthing BIRTH center, an inpatient or <--
29 outpatient drug and alcohol treatment facility, a home health
30 care facility and a hospice facility.
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1 "Health care practitioner." An individual who is licensed,
2 certified or otherwise authorized to provide health care
3 services under the laws of this Commonwealth and whose license,
4 certificate or authorization is in good standing and without
5 restrictions from the appropriate professional licensing agency.
6 "Health care services." Any treatment, admission, procedure,
7 service, medical supplies and equipment, continuing treatment or
8 extension of a stay, which is prescribed, provided or proposed
9 to be provided by a health care practitioner or health care
10 facility. The term includes services covered under the terms and
11 conditions of a managed care plan contract.
12 "Integrated delivery system." Any partnership, association,
13 affiliation, corporation, limited liability corporation or other
14 legal entity which:
15 (1) enters into contractual, risk-sharing arrangements
16 with managed care entities to provide or arrange for the
17 provision of health care services;
18 (2) assumes some responsibility for quality assurance,
19 utilization review, provider credentialing and related
20 functions; and
21 (3) assumes to some extent, through capitation
22 reimbursement or other risk-sharing arrangement, the
23 financial risk for provision of health care services to
24 enrollees.
25 "Managed care entity." A comprehensive health care plan
26 which integrates the financing and delivery of health care
27 services, including behavioral health, to enrollees through a
28 network, with participating providers selected to participate on
29 the basis of specific standards and which provides financial
30 incentives for enrollees to use the network providers in
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1 accordance with the plan's procedures. The term does not include
2 a network which is primarily fee-for-service, indemnity
3 arrangement with no managed care component. The term includes <--
4 health care plans provided through a policy or contract
5 authorized under any of the following:
6 (1) Section 630 of the act of May 17, 1921 (P.L.682,
7 No.284), known as The Insurance Company Law of 1921.
8 (2) Act of December 29, 1972 (P.L.1701, No.364), known
9 as the Health Maintenance Organization Act.
10 (3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
11 corporations).
12 (4) 40 Pa.C.S. Ch. 63 (relating to professional health
13 services plan corporations).
14 (5) A fraternal benefit society charter.
15 (6) A contract with the Department of Public Welfare to
16 provide medical assistance on a capitated basis.
17 "MEDICAL NECESSITY." CLINICAL DETERMINATIONS TO ESTABLISH A <--
18 SERVICE OR BENEFIT WHICH WILL OR IS REASONABLY EXPECTED TO:
19 (1) PREVENT THE ONSET OF AN ILLNESS, CONDITION OR
20 DISABILITY;
21 (2) REDUCE OR AMELIORATE THE PHYSICAL, MENTAL,
22 BEHAVIORAL OR DEVELOPMENTAL EFFECTS OF AN ILLNESS, CONDITION,
23 INJURY OR DISABILITY; OR
24 (3) ASSIST THE INDIVIDUAL TO ACHIEVE OR MAINTAIN MAXIMUM
25 FUNCTIONAL CAPACITY IN PERFORMING DAILY ACTIVITIES, TAKING
26 INTO ACCOUNT BOTH THE FUNCTIONAL CAPACITY OF THE INDIVIDUAL
27 AND THOSE FUNCTIONAL CAPACITIES APPROPRIATE FOR INDIVIDUALS
28 OF THE SAME AGE.
29 "PRIMARY CARE PROVIDER" OR "PCP." A PROVIDER WHO SUPERVISES,
30 COORDINATES AND PROVIDES INITIAL AND BASIC CARE TO ENROLLEES,
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1 WHO INITIATES THEIR REFERRAL FOR SPECIALIST CARE AND WHO
2 MAINTAINS CONTINUITY OF PATIENT CARE. PROVIDERS MAY ONLY PROVIDE
3 CARE WITHIN THE SCOPE OF THEIR PRACTICE.
4 "Prospective utilization review." A review by a utilization
5 review entity of all reasonably necessary supporting information
6 which:
7 (1) results in a decision to approve or deny payment for
8 a health care service; and
9 (2) occurs prior to the delivery or provision of the
10 health care service.
11 "Provider network." The health care practitioners and health
12 care facilities designated by a managed care entity to provide
13 covered health care services to an enrollee.
14 "Provider." The health care practitioner or health care
15 facility that prescribes, provides or proposes to provide a
16 health care service to an enrollee.
17 "Retrospective utilization review." A review by a
18 utilization review entity of all necessary supporting
19 information which:
20 (1) results in a decision to approve or deny payment for
21 a health care service; and
22 (2) occurs following delivery or provision of the health
23 care service.
24 "Utilization review." A system of prospective, concurrent or
25 retrospective utilization review or case management performed by
26 a utilization review entity of the medical necessity and
27 appropriateness of covered health care services prescribed,
28 provided or proposed to be provided to an enrollee. The term
29 does not include any of the following:
30 (1) Requests for clarification of coverage, eligibility
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1 verification or benefits verification.
2 (2) An internal quality assurance or utilization review
3 process of a provider unless the review results in a denial.
4 "Utilization review entity." An entity that performs
5 utilization review on behalf of a managed care entity providing
6 coverage to residents of this Commonwealth.
7 Section 4. Certification of utilization review entity.
8 (a) Certification required.--
9 (1) Except as set forth in paragraph (2), a utilization
10 review entity may not conduct utilization review regarding
11 health care services delivered or proposed to be delivered in
12 this Commonwealth unless the entity is certified by the
13 department to perform a utilization review.
14 (2) Paragraph (1) shall not apply to a utilization
15 review entity operating in this Commonwealth on July 1, 1998,
16 for one year following the effective date of this section.
17 (b) Renewal.--Certification must be renewed every three
18 years unless otherwise suspended or revoked by the department.
19 (c) Accrediting bodies.--The department may utilize a
20 nationally recognized accrediting body's standards to certify
21 utilization review entities to the extent that the accrediting
22 body's standards meet or exceed the standards set forth in
23 section 5 if the entity agrees to do all of the following:
24 (1) Direct the accrediting body to provide a copy of its
25 findings to the department.
26 (2) Permit the department to verify compliance with
27 standards not addressed by the accrediting body.
28 (d) Standard.--The department shall grant certification to a
29 utilization review entity which meets the applicable
30 requirements of sections 5, 6, 7 and 8.
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1 (e) Fees.--The department may prescribe fees for application
2 for and renewal of certification. The fees shall reflect the
3 administrative costs of certification.
4 (f) Managed care entities and integrated delivery systems.--
5 (1) A managed care entity shall comply with the
6 standards and procedures of this act, but is not required to
7 be separately certified as a utilization review entity.
8 (2) An integrated delivery system under a contract which
9 has been approved by the department is not required to be
10 separately certified as a utilization review entity.
11 Section 5. Utilization review operational standards.
12 (a) Requirements.--Utilization review entities providing
13 services in this Commonwealth shall comply with all of the
14 following:
15 (1) Respond to inquiries relating to the entity's
16 utilization review determinations by:
17 (i) providing toll-free telephone access at least 40
18 hours per week during normal business hours;
19 (ii) maintaining a telephone call answering service
20 or recording system during hours other than normal
21 business hours; and
22 (iii) responding by mail or other means to each
23 telephone call regarding a review determination received
24 by the answering service or recording system within one
25 business day after the receipt of the call.
26 (2) Protect the confidentiality of individual medical
27 records by:
28 (i) complying with all applicable Federal and State
29 laws and professional ethical standards to ensure that an
30 enrollee's medical records and other confidential medical
19970H0977B3471 - 10 -
1 information obtained in the performance of utilization
2 review are not improperly disclosed or redisclosed;
3 (ii) only requesting medical records and other
4 information which are necessary to make a utilization
5 review determination for the health care services under
6 review;
7 (iii) adopting mechanisms to allow a provider of
8 record to verify that an individual requesting
9 information on behalf of the managed care entity is a
10 legitimate representative of the entity; and
11 (iv) deeming a Commonwealth official, who is acting
12 on behalf of a consumer and who requests in writing
13 specific information from the managed care entity or its
14 agents, to have the consent of the consumer to release
15 the information specific to the request.
16 (3) Render utilization review decisions based on the
17 medical necessity and appropriateness of the health care
18 service being reviewed.
19 (4) Provide an appeals process consistent with the
20 provisions of this act.
21 (5) Maintain and make available a written description of
22 all appeals and related procedures by which a provider may
23 seek review of a denial.
24 (6) Ensure that personnel conducting utilization review
25 have current licenses in good standing and without
26 restrictions from the appropriate professional licensing
27 agency.
28 (7) Comply with all time frames set forth in this act.
29 (8) Provide written denials to include:
30 (i) the specific clinical criteria and the principal
19970H0977B3471 - 11 -
1 reasons for the decision; and
2 (ii) a description of the procedure by which the
3 provider may appeal a denial, including the name and
4 telephone number of the person to contact in regard to an
5 appeal and the deadline for filing an appeal.
6 (9) Maintain for not less than three years a written
7 record of each utilization review denial, including a
8 detailed justification of the denial and the notification to
9 the provider and the enrollee.
10 (10) Notify the provider of record of the specific facts
11 or documents required to complete the utilization review
12 within 48 hours of receipt of the request for review if the
13 utilization review entity lacks necessary supporting
14 information.
15 (11) Provide a period of at least 24 hours following an
16 emergency health care service during which the provider,
17 enrollee or enrollee's designee may notify a managed care
18 entity and request the approval for continuation of health
19 care services for the condition under review.
20 (b) Compensation.--Compensation to any person performing
21 utilization review activities may not contain incentives, direct
22 or indirect, for the person to approve or deny payment for the
23 delivery or coverage of health care services.
24 (c) Alternative resolution.--Managed care entities and
25 providers may establish by contract alternative utilization
26 review standards, practices and procedures which meet or exceed
27 the requirements of subsection (a) and are approved by the
28 department.
29 Section 6. Initial utilization review decisions.
30 (a) Review.--An initial utilization review which results in
19970H0977B3471 - 12 -
1 a denial must be made by a licensed physician.
2 (b) Notification.--Notification of an initial utilization
3 review decision shall be made within the following time frames:
4 (1) A prospective utilization review decision shall be
5 communicated to the provider and, in the case of a denial, to
6 the enrollee within 48 hours of the receipt of all supporting
7 information necessary to complete the review.
8 (2) A concurrent utilization review decision shall be
9 communicated to the provider and, in the case of a denial, to
10 the enrollee within 24 hours of the receipt of all supporting
11 information necessary to complete the review.
12 (3) A retrospective utilization review decision shall be
13 communicated to the provider and, in the case of a denial, to
14 the enrollee within 30 days of the receipt of all supporting
15 information necessary to complete the review.
16 Section 7. Internal appeals.
17 A denial may be appealed by the provider, with the consent of
18 the enrollee, to an internal appeals process under section
19 5(a)(4). The internal appeals process must do all of the
20 following:
21 (1) Include a time period of 45 days following receipt
22 of the written notification of denial within which an appeal
23 may be filed. The notification of denial must include the
24 name, address and telephone number of the entity to which the
25 provider may appeal the denial.
26 (2) Notify the provider and the enrollee of a decision
27 no later than 45 days from the date the appeal and all
28 necessary supporting information is filed.
29 (3) Ensure that a denial resulting from an internal
30 appeal under this section is made by a licensed physician in
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1 the same or similar specialty which typically manages or
2 consults on the health care services. The physician who
3 rendered an initial denial may not render a decision on an
4 appeal of that denial.
5 (4) Provide an expedited internal appeals process for a
6 situation in which the enrollee's life or health would be
7 seriously jeopardized or the enrollee's ability to regain
8 maximum function would be jeopardized. This paragraph
9 includes notification of the provider and enrollee within 48
10 hours of the time the appeal was filed.
11 (5) Maintain records of internal appeals and the
12 resulting determinations for not less than three years and
13 provide the records to the department upon request.
14 Section 8. Independent external review process.
15 (a) Requirements.--A managed care entity shall establish an
16 independent external review process to which a provider may
17 appeal a denial by the internal process. The independent
18 external review process must meet the following requirements:
19 (1) The provider may, WITH THE CONSENT OF THE ENROLLEE, <--
20 initiate the independent external review within 15 days of
21 receipt of a denial by the internal appeals process by:
22 (i) submitting a written notice, including any
23 material justification and all necessary supporting
24 information, to the managed care entity; and
25 (ii) notifying the enrollee and the department that
26 an independent external review has been requested.
27 (2) The utilization review entity which conducted the
28 internal appeal shall forward copies of all written
29 documentation associated with the denial, including all
30 necessary supporting information, a summary of applicable
19970H0977B3471 - 14 -
1 issues, a statement of the utilization review entity's
2 decision, the criteria used and the clinical reasons for the
3 decision, to the independent external review entity within 15
4 days of the receipt of the request for review. The managed
5 care entity shall notify the provider of the name, address
6 and telephone number of the selected independent review
7 entity.
8 (3) Independent external review decisions shall be made
9 by:
10 (i) one or more licensed physicians in active
11 clinical practice or in the same or similar specialty
12 which typically manages or recommends treatment for the
13 health care service under review; or
14 (ii) one or more physicians currently certified by
15 a board approved by the American Board of Medical
16 Specialties or the American Board of Osteopathic
17 Specialties, in the same or similar specialty which
18 typically manages or recommends treatment for the health
19 care service under review.
20 (4) The independent external review entity shall
21 evaluate and analyze the case and render a written decision
22 to the managed care entity and the provider within 30 days.
23 The standard of review shall be whether the denial by the
24 internal appeal was medically necessary and appropriate. <--
25 PROCESS SHOULD BE SUSTAINED BECAUSE THE PROPOSED COURSE OF <--
26 TREATMENT WAS NOT MEDICALLY NECESSARY AND APPROPRIATE. The
27 decision shall be subject to appeal to a court of competent
28 jurisdiction within 60 days of receipt of the external review
29 entity's written decision. There shall be a rebuttable
30 presumption in favor of the decision of the independent
19970H0977B3471 - 15 -
1 external review entity.
2 (5) The managed care entity shall authorize any covered <--
3 health care service or pay any claim determined to be
4 medically necessary and appropriate under paragraph (4),
5 whether or not an appeal to a court of competent jurisdiction
6 has been filed. If the managed care entity fails to authorize
7 the health care service or pay the claim within 15 days of
8 receipt of notice of approval by the independent external
9 review entity, interest shall be assessed at a rate of 10%
10 per year, notwithstanding the 45-day period in section 12.
11 (6) All fees and costs related to an independent
12 external review shall be paid by the nonprevailing party. The
13 provider and the utilization review entity or managed care
14 entity shall each place in escrow an amount equal to one-half
15 of the estimated costs of the independent external review.
16 The escrow shall be held by the independent external review
17 entity.
18 (b) Certified utilization review.--The department shall
19 compile and maintain a list of certified utilization review
20 entities that meet the requirements of this section and that are
21 qualified to perform independent external reviews. The
22 department may remove an independent external review entity from
23 the list if the department determines that the entity is
24 incapable of performing its responsibilities or violates this
25 act.
26 (c) Assignment.--
27 (1) The department shall randomly assign requests for an
28 independent external review to those certified utilization
29 review entities listed in subsection (b) within one business
30 day of receiving a request pursuant to subsection (a)(1).
19970H0977B3471 - 16 -
1 (2) If the 8 hours during which the department is open
2 to the public expire and the department fails to select the
3 utilization review entity at random, the managed care entity
4 shall designate the utilization review entity certified under
5 section 4 and subsection (b) to conduct the independent
6 external review.
7 (3) The department shall report annually to the General
8 Assembly its findings based on information it receives
9 pursuant to subsection (d)(4). The report shall include a
10 summary of any complaints it has received concerning entities
11 listed under this section and any corrective actions it has
12 taken as a result of such complaints. The department shall <--
13 make its annual report available to the public.
14 (d) Procedure.--The independent external review entity shall
15 do all of the following:
16 (1) Mail written acknowledgment of the receipt of the
17 notice of appeal to the provider, the managed care entity and
18 the utilization review entity which performed the internal
19 appeal.
20 (2) Review the information considered by the entities
21 which conducted the initial utilization review and the
22 internal appeal to reach a decision to deny payment for
23 health care services and any other written submissions by the
24 provider.
25 (3) Mail to the provider, the utilization review entity
26 and the managed care entity a written notice describing
27 specific utilization review criteria and the principal
28 reasons for the denial of payment for health care services by
29 the independent external review entity. Notice of the
30 decision shall also be sent to the enrollee.
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1 (4) Report to the department the number, type and
2 disposition of each appeal every six months. The report shall
3 include the names of the providers, utilization review
4 entities and managed care entities involved and whether the
5 utilization review entity was selected at random or chosen by
6 the managed care entity.
7 (e) Fees.--Fees to file for an independent external review
8 may not exceed fees established by the Medicare program for
9 similar consultations, unless otherwise agreed by the parties to
10 the appeal and the independent external review entity.
11 (f) Alternative dispute resolution.--Written contracts
12 between managed care entities and providers may provide for an
13 alternative dispute resolution system to the independent
14 external review if the department approves the contract. The
15 alternative dispute resolution system must include specific time
16 limitations to initiate appeal, receive written information,
17 conduct a hearing and render a final decision; provide for
18 impartial reviewers that meet the requirements of section 5(a);
19 and require that reviewers be licensed consistent with
20 subsection (a)(3). A written decision pursuant to an alternative
21 dispute resolution system shall be final and binding on all
22 parties.
23 (g) Consumer grievances.--Nothing in this section shall
24 interfere with an enrollee's right to access a consumer
25 grievance process.
26 (h) Confidentiality.--The proceedings, deliberations and
27 records of a managed care entity regarding utilization review of
28 health care services shall be confidential and may not be
29 subject to discovery or entered into evidence in any civil
30 action with the exception of appeals under subsection (a)(4)
19970H0977B3471 - 18 -
1 against a managed care entity to the same degree that such
2 information is protected by the act of July 20, 1974 (P.L.564,
3 No.193), known as the Peer Review Protection Act. Individuals
4 supplying such information or participating in their use shall
5 be entitled to the same immunities as provided under that act.
6 Section 9. Participating providers.
7 (a) Requirements.--A managed care entity shall do all of the
8 following:
9 (1) Ensure that there are sufficient health care
10 practitioners and health care facilities within a provider
11 network to provide enrollees with access to quality health
12 care services in a timely fashion AND WITHIN A REASONABLE <--
13 DISTANCE. A MANAGED CARE ENTITY SHALL NOT SELL A HEALTH CARE
14 PLAN IN ANY COUNTY UNLESS THE PROVIDER NETWORK FOR THAT PLAN
15 INCLUDES AT LEAST ONE PRIMARY CARE PROVIDER WHO PRACTICES IN
16 THAT COUNTY.
17 (2) Consult with health care practitioners in active
18 clinical practice regarding the professional qualifications,
19 specialty and geographic composition of the provider network.
20 (3) Report the composition of its provider network,
21 including the extent to which providers in the network are
22 accepting new enrollees, to the department:
23 (i) every two years;
24 (ii) after significant changes in the provider
25 network; and
26 (iii) as often as required by the department.
27 (4) PERMIT ENROLLEES TO DO ALL OF THE FOLLOWING: <--
28 (I) RECEIVE CHIROPRACTIC CARE WITHOUT PRIOR APPROVAL
29 FROM A PRIMARY HEALTH CARE PRACTITIONER WHO IS
30 PARTICIPATING IN THE MANAGED CARE ENTITY'S PROVIDER
19970H0977B3471 - 19 -
1 NETWORK.
2 (II) RECEIVE COVERAGE FOR 80% OF THE COST OF
3 CHIROPRACTIC CARE FROM A HEALTH CARE PROVIDER WHO IS NOT
4 PARTICIPATING IN THE MANAGED CARE ENTITY'S PROVIDER
5 NETWORK.
6 (b) Prohibitions.--A managed care entity may not
7 discriminate against patients with expensive medical conditions
8 by excluding from its network health care practitioners with
9 practices which include a substantial number of such patients,
10 consistent with the criteria set forth in section 10.
11 Section 10. Provider credentialing.
12 (a) Process.--
13 (1) A managed care entity shall establish a formal
14 credentialing process to enroll the participating health care
15 practitioners and health care facilities for a provider
16 network. The process shall include written criteria and
17 processes for initial enrollment, renewal, restrictions and
18 termination. The managed care entity shall report on the
19 established credentialing criteria and procedures to the
20 department:
21 (i) every two years;
22 (ii) after significant changes in the criteria or
23 process; and
24 (iii) as often as required by the department.
25 (2) The criteria and procedures must be approved by the
26 department. The department may utilize a nationally
27 recognized accrediting body's standards for provider
28 credentialing.
29 (3) The managed care entity's compliance with the
30 purposes of section 2 shall be monitored by the department to
19970H0977B3471 - 20 -
1 ensure compliance.
2 (b) Disclosure.--A managed care entity shall disclose all
3 credentialing criteria and procedures to health care
4 practitioners and health care facilities that apply to
5 participate or are participating in its network. The
6 proceedings, deliberations and records of a managed care entity
7 regarding the credentialing of health care providers shall be
8 confidential, may not be subject to discovery and may not be
9 entered into evidence in a civil action against a managed care
10 entity, to the same degree that such information is protected by
11 the Peer Review Protection Act. THE ACT OF JULY 20, 1974 <--
12 (P.L.564, NO.193), KNOWN AS THE PEER REVIEW PROTECTION ACT.
13 Individuals supplying such information or participating in their <--
14 ITS use shall be entitled TO the same immunities as provided <--
15 under that act.
16 (c) Exclusion prohibited.--A managed care entity may not
17 exclude or terminate a health care practitioner or health care
18 facility from its provider network because the practitioner or
19 facility advocated for medically appropriate health care;
20 advocated on behalf of a patient or health care service in any
21 utilization review, appeal or other dispute regarding the
22 provision of health care services; or protested a decision,
23 policy or practice of a managed care entity or other health
24 insurer.
25 (d) Provider conscience clause.--A managed care entity may
26 not exclude, discriminate against or penalize any provider for
27 its refusal to allow, perform, participate in or refer for
28 health care services, when such refusal of the provider is by
29 reason of moral or religious grounds provided that provider
30 makes available such information to enrollees or, if applicable,
19970H0977B3471 - 21 -
1 prospective enrollees.
2 (e) Written decisions.--If a managed care entity denies
3 credentialing or recredentialing to an applicant, the managed
4 care entity shall provide the health care practitioner or health <--
5 care facility APPLICANT with written notice of the decision to <--
6 deny credentialing. The notice must include a clear explanation
7 of the basis for the decision.
8 Section 11. Uniform disclosure.
9 (a) Format.--The Insurance Department shall adopt a uniform
10 format for the disclosure to enrollees of the terms and
11 conditions of health insurance plans and contracts to provide
12 health care services.
13 (b) Contents.--The uniform format shall include, at a
14 minimum, the following provisions written in terms
15 understandable to the general public:
16 (1) The benefits and any and all exclusions.
17 (2) All enrollee coinsurance, copayments and
18 deductibles.
19 (3) All maximum benefit limitations.
20 (4) All requirements or limitations regarding the choice
21 of provider AND AN ANNUALLY UPDATED LIST OF THE PROVIDERS <--
22 WHICH A COVERED INDIVIDUAL MAY CHOOSE.
23 (5) Description of any and all restrictions or
24 limitations on prescription drugs and biologicals, including
25 any prior authorization or other review requirements.
26 (6) Disclosure of provider incentive plans.
27 (7) Enrollee satisfaction statistics.
28 (c) Mandatory use.--Managed care entities shall use the
29 format adopted by the Insurance Department to make the required
30 information available to purchasers and potential enrollees.
19970H0977B3471 - 22 -
1 Section 12. Prompt payment of clean claims.
2 (a) Requirements.--A managed care entity shall pay a clean <--
3 claim submitted by a provider within 45 days of a receipt of the
4 claim. The entity shall be deemed to have received the claim and
5 documentation three business days after being mailed by the
6 provider to the appropriate department within the entity.
7 Contractual agreements between entities and providers shall meet
8 or exceed the requirements set forth in this section. MAKE <--
9 REQUIRED PAYMENTS TO A PROVIDER WITHIN 45 DAYS. IF PAYMENT
10 CANNOT BE MADE WITHIN 45 DAYS OF RECEIPT OF A CLAIM, THE MANAGED
11 CARE ENTITY SHALL NOTIFY THE PROVIDER IN WRITING WITHIN THE 45-
12 DAY PERIOD OF THE REASON FOR THE DELAY AND WHEN PAYMENT IS
13 EXPECTED TO BE MADE. CONTRACTUAL AGREEMENTS BETWEEN MANAGED CARE
14 ENTITIES AND PROVIDERS SHALL MEET OR EXCEED THE REQUIREMENTS OF
15 THIS SECTION.
16 (b) Failure to pay.--If an A MANAGED CARE entity fails to <--
17 make payment under subsection (a), interest at 10% per annum
18 shall be added to the amount of the claim, beginning on the day
19 after the required payment date and ending on the date on which
20 payment of the claim is made. Interest imposed for failure to
21 comply with subsection (a) which remains unpaid at the end of
22 any 30-day period shall be added to the principal; and,
23 thereafter, interest shall accrue on the added amount.
24 (c) Administrative remedy.--The Insurance Commissioner shall <--
25 investigate a written complaint from a health care provider
26 concerning a managed care entity's compliance with this section.
27 A violation of this section shall be considered an unfair
28 insurance practice and be subject to the procedures and
29 penalties under the act of July 22, 1974 (P.L.589, No.205),
30 known as the Unfair Insurance Practices Act.
19970H0977B3471 - 23 -
1 (C) VIOLATIONS.--EACH VIOLATION OF THIS SECTION SHALL <--
2 CONSTITUTE A VIOLATION OF THE ACT OF JULY 22, 1974 (P.L.589,
3 NO.205), KNOWN AS THE UNFAIR INSURANCE PRACTICES ACT, AND SHALL
4 BE SUBJECT TO THE PROCEDURES AND PENALTIES CONTAINED IN THAT
5 ACT.
6 SECTION 13. CONSUMER INFORMATION.
7 (A) DEVELOPMENT OF STANDARDS.--NOT LATER THAN DECEMBER 31,
8 1999, THE PHYSICIAN GENERAL SHALL DEVELOP A HEALTH INSURANCE
9 PLAN REPORT CARD TO AID CONSUMERS OF THIS COMMONWEALTH IN
10 CHOOSING A HEALTH INSURANCE PLAN. THE REPORT CARD SHALL INCLUDE
11 SUFFICIENT COMPARATIVE INFORMATION TO PERMIT CONSUMERS TO
12 COMPARE AND EVALUATE HEALTH INSURANCE PLANS.
13 (B) DUTIES OF PHYSICIAN GENERAL.--IN DEVELOPING A HEALTH
14 INSURANCE PLAN REPORT CARD, THE PHYSICIAN GENERAL SHALL:
15 (1) SELECT FROM EXISTING COMPARATIVE HEALTH CARE
16 MEASURES, WHERE SUCH MEASURES EXIST, OR DEVELOP ADDITIONAL
17 COMPARATIVE HEALTH CARE MEASURES TO GUIDE CONSUMER CHOICE. IN
18 SELECTING SUCH MEASURES, THE PHYSICIAN GENERAL MAY USE ANY
19 MEASURES FROM THE NATIONAL COMMITTEE ON QUALITY ASSURANCE'S
20 HEDIS.3 SYSTEM, THE FOUNDATION FOR ACCOUNTABILITY (FACCT)
21 MEASUREMENT SETS, THE AGENCY FOR HEALTH CARE POLICY AND
22 RESEARCH'S CAHPS SYSTEM, THE OREGON CONSUMER SCORECARD
23 PROJECT, THE NEW JERSEY HMO REPORT CARD PROJECT OR PUBLIC
24 HEALTH DATA BASES.
25 (2) ENSURE THAT COMPARATIVE INFORMATION IS TAILORED TO
26 CONSIDER THE NEEDS OF INDIVIDUAL HEALTH CARE CONSUMERS,
27 INCLUDING CONSUMERS WITH SPECIAL OR EXTRAORDINARY HEALTH CARE
28 NEEDS.
29 (3) ENSURE THAT COMPARATIVE INFORMATION IS
30 GEOGRAPHICALLY SENSITIVE TO REFLECT THE HEALTH PLAN
19970H0977B3471 - 24 -
1 EXPERIENCES OF RURAL CONSUMERS.
2 (4) DEVELOP PROCEDURES TO CONSOLIDATE AND REDUCE THE
3 DATA BURDEN ON HEALTH INSURANCE PLANS THROUGH THE DEVELOPMENT
4 OF UNIFORM DATA SPECIFICATIONS AND SHARING OF HEALTH CARE
5 INFORMATION WHERE APPROPRIATE.
6 (5) IMPLEMENT A PROGRAM TO PROVIDE CONSUMERS WITH ACCESS
7 TO APPROPRIATE COMPARATIVE INFORMATION IN A MANNER WHICH WILL
8 ENABLE CONSUMERS TO MAKE INFORMED HEALTH CARE DECISIONS BY
9 COMPARING THE VARIOUS HEALTH INSURANCE PLANS IN WHICH
10 CONSUMERS ARE ELIGIBLE TO ENROLL.
11 (6) ENSURE THAT COMPARATIVE INFORMATION IS IN A
12 STANDARDIZED FORM AND UNDERSTANDABLE TO A REASONABLE
13 LAYPERSON.
14 (7) ENSURE THAT COMPARATIVE INFORMATION INCLUDES
15 CONSUMER AND PROVIDER SATISFACTION DATA. SUCH DATA SHALL BE
16 DERIVED FROM ANNUAL SURVEYS OF CONSUMERS ENROLLED IN A
17 PARTICULAR HEALTH INSURANCE PLAN AND THOSE CONSUMERS WHO HAVE
18 WITHDRAWN FROM SUCH PLAN DURING THE PRECEDING 12-MONTH
19 PERIOD. THE SURVEY SHALL BE CONDUCTED BY AN ORGANIZATION
20 INDEPENDENT OF THE HEALTH PLAN.
21 (C) DUTIES OF SECRETARY AND COMMISSIONER.--THE SECRETARY AND
22 COMMISSIONER SHALL SUPPLY ALL NECESSARY ASSISTANCE TO THE
23 PHYSICIAN GENERAL IN CARRYING OUT THE PROVISIONS OF THIS
24 SECTION.
25 (D) DEFINITIONS.--AS USED IN THIS SECTION, THE FOLLOWING
26 WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
27 SUBSECTION:
28 "COMPARATIVE INFORMATION." INFORMATION ON ACCESS TO CARE,
29 COST OF CARE, USE OF HEALTH SERVICES, SATISFACTION WITH CARE AND
30 SERVICES, MANAGEMENT PRACTICES OF HEALTH PLANS AND ANY OTHER
19970H0977B3471 - 25 -
1 ASPECT OF HEALTH CARE DELIVERY WHICH MAY BE USED BY CONSUMERS TO
2 JUDGE THE OVERALL QUALITY OF CARE AND TO DISTINGUISH BETWEEN THE
3 CARE PROVIDED BY HEALTH PLANS.
4 "CAHPS." THE FEDERAL AGENCY FOR HEALTH CARE POLICY AND
5 RESEARCH'S "CONSUMER ASSESSMENT OF HEALTH PLANS STUDY" DESIGNED
6 TO PROVIDE AN INTEGRATED SET OF STANDARDIZED SURVEY
7 QUESTIONNAIRES AND REPORT FORMATS WHICH CAN BE USED TO COLLECT
8 AND REPORT INFORMATION FROM HEALTH PLAN ENROLLEES ABOUT THEIR
9 HEALTH CARE EXPERIENCES WITH A PARTICULAR HEALTH PLAN.
10 "FACCT." THE FOUNDATION FOR ACCOUNTABILITY'S CONSUMER
11 INFORMATION FRAMEWORK DESIGNED TO GIVE CONSUMERS CLEAR, CONCISE
12 AND UNDERSTANDABLE PERFORMANCE MEASURES FOR COMPARING THE
13 CLINICAL QUALITY OF HEALTH PLANS.
14 "HEALTH INSURANCE PLAN." A HEALTH INSURANCE PLAN WHICH USES
15 A GATEKEEPER TO MANAGE THE UTILIZATION OF HEALTH CARE SERVICES
16 BY ENROLLEES INCLUDING ANY SUCH PLAN PROVIDED BY OR ARRANGED
17 THROUGH AN ENTITY OPERATING UNDER ANY OF THE FOLLOWING:
18 (1) SECTION 630 OF THE ACT OF MAY 17, 1921 (P.L.682,
19 NO.284), KNOWN AS THE INSURANCE COMPANY LAW OF 1921.
20 (2) THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364),
21 KNOWN AS THE HEALTH MAINTENANCE ORGANIZATION ACT.
22 (3) THE ACT OF DECEMBER 14, 1992 (P.L.835, NO.134),
23 KNOWN AS THE FRATERNAL BENEFIT SOCIETIES CODE.
24 (4) 40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN
25 CORPORATIONS).
26 (5) 40 PA.C.S. CH. 63 (RELATING TO PROFESSIONAL HEALTH
27 SERVICES PLAN CORPORATIONS).
28 (6) A CONTRACT WITH THE DEPARTMENT OF PUBLIC WELFARE TO
29 PROVIDE MEDICAL ASSISTANCE BENEFITS THROUGH A CAPITATION
30 PLAN.
19970H0977B3471 - 26 -
1 "HEDIS." THE "HEALTH PLAN EMPLOYER DATA AND INFORMATION SET"
2 DEVELOPED BY THE NATIONAL COMMITTEE ON QUALITY ASSURANCE (NCQA)
3 AS A SET OF STANDARDIZED PERFORMANCE MEASURES DESIGNED TO ENSURE
4 THAT CONSUMERS HAVE THE INFORMATION NECESSARY TO COMPARE THE
5 PERFORMANCE OF HEALTH PLANS.
6 "PERFORMANCE MEASURES." A SET OF MEASURES, SUCH AS A
7 STANDARD OR INDICATOR, USED TO ASSESS THE PERFORMANCE OF A
8 HEALTH PLAN.
9 Section 13 14. Investigations and, penalties AND SANCTIONS. <--
10 (a) Investigation.--Except as set forth in section 12, the
11 department shall investigate a managed care entity's compliance <--
12 with this act in response to a written complaint by a health
13 care provider. DEPARTMENT SHALL ENFORCE COMPLIANCE WITH THIS <--
14 ACT, ENFORCEMENT TO INCLUDE THE INVESTIGATION OF ALL COMPLAINTS.
15 (b) Penalties.--The department may impose an administrative
16 penalty of up to $10,000 for each violation of this act. In <--
17 addition, the
18 (C) SANCTIONS.--THE department may deny, suspend, revoke or <--
19 refuse to renew the certification of a utilization review entity
20 that fails to comply with the provisions of this act. This
21 subsection is subject to 2 Pa.C.S. Ch. 5 Subch. A (relating to
22 practice and procedure of Commonwealth agencies) and Ch. 7
23 Subch. A (relating to judicial review of Commonwealth agency
24 action).
25 Section 14 15. Regulations. <--
26 The department and Insurance Department shall promulgate
27 regulations necessary to implement the provisions of this act.
28 Section 15 16. Exceptions. <--
29 This act shall not apply to any of the following:
30 (1) Peer review or utilization review performed under
19970H0977B3471 - 27 -
1 the act of June 2, 1915 (P.L.736, No.338), known as the
2 Workers' Compensation Act.
3 (2) The act of July 1, 1937 (P.L.2532, No.470), known as
4 the Workers' Compensation Security Fund Act.
5 (3) Peer review, utilization review or mental or
6 physical examinations performed under 75 Pa.C.S. Ch. 17
7 (relating to financial responsibility).
8 (4) The fee-for-service programs operated by the
9 Department of Public Welfare under Title XIX of the Social
10 Security Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.).
11 Section 16 17. Applicability. <--
12 Nothing in this act shall regulate or authorize regulation
13 which would be ineffective by reason of the State law preemption
14 provisions of the Employee Retirement Income Security Act of
15 1974 (Public Law 93-406, 88 Stat. 829).
16 Section 17 18. Discrimination on moral or religious grounds <--
17 prohibited.
18 No public institution, public official or public agency may
19 impose penalties, take disciplinary action against, or deny or
20 limit public funds, licenses, authorizations, or other approvals
21 or documents of qualification to any person, association, or
22 corporation:
23 (1) attempting to establish a plan; or
24 (2) operating, expanding or improving an existing plan,
25 because the person, association or corporation refuses to pay
26 for or arrange for the payment of any particular form of
27 health care services or other services or supplies covered by
28 other plans when such refusal is by reason of objection
29 thereto on moral or religious grounds.
30 Section 18 19. Effective date. <--
19970H0977B3471 - 28 -
1 This act shall take effect in 180 days.
C11L40JS/19970H0977B3471 - 29 -