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                                 SENATE AMENDED
        PRIOR PRINTER'S NOS. 2965, 3231, 3450         PRINTER'S NO. 4346

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2098 Session of 2007


        INTRODUCED BY DeLUCA, BELFANTI, FRANKEL, HALUSKA, KOTIK, MOYER,
           SIPTROTH, WALKO, J. WHITE, WOJNAROSKI, PETRONE, YOUNGBLOOD,
           GIBBONS AND CALTAGIRONE, DECEMBER 6, 2007

        SENATOR D. WHITE, BANKING AND INSURANCE, IN SENATE, AS AMENDED,
           SEPTEMBER 17, 2008

                                     AN ACT

     1  Establishing a system for payment or reduction in payment for     <--
     2     preventable serious adverse events within Commonwealth
     3     programs; informing health insurers of payment policies used
     4     by Medicaid and Medicare; and providing for the powers and
     5     duties of the Department of Public Welfare, the Insurance
     6     Department, the Department of Health and the Department of
     7     State.
     8  ESTABLISHING A SYSTEM FOR PAYMENT OR REDUCTION IN PAYMENT FOR     <--
     9     PREVENTABLE SERIOUS ADVERSE EVENTS WITHIN THIS COMMONWEALTH;
    10     AND PROVIDING FOR THE POWERS AND DUTIES OF THE DEPARTMENT OF
    11     HEALTH AND THE DEPARTMENT OF STATE.

    12     The General Assembly of the Commonwealth of Pennsylvania
    13  hereby enacts as follows:
    14  Section 1.  Short title.                                          <--
    15     This act shall be known and may be cited as the Preventable
    16  Serious Adverse Events Act.
    17  Section 2.  Definitions.
    18     The following words and phrases when used in this act shall
    19  have the meanings given to them in this section unless the
    20  context clearly indicates otherwise:
    21     "Centers for Medicare and Medicaid Services" or "CMS."  The

     1  Centers for Medicare and Medicaid Services within the United
     2  States Department of Health and Human Services.
     3     "Department."  The Insurance Department of the Commonwealth.
     4     "Facility."  A health care facility as defined in section
     5  802.1 of the act of July 19, 1979 (P.L.130, No.48), known as the
     6  Health Care Facilities Act, or an entity licensed as a hospital
     7  under the act of June 13, 1967 (P.L.31, No.21), known as the
     8  Public Welfare Code.
     9     "Health care provider."  A health care facility or a person,
    10  including a corporation, university or other educational
    11  institution licensed or approved by the Commonwealth to provide
    12  health care or professional medical services as a physician, a
    13  certified nurse midwife, a podiatrist, a certified registered
    14  nurse practitioner, a physician assistant, a chiropractor, a
    15  hospital, an ambulatory surgery center, a nursing home and a
    16  birth center.
    17     "Health payor."  An individual or entity providing a group
    18  health, sickness or accident policy, subscriber contract or
    19  program issued or provided by an entity, including any one of
    20  the following:
    21         (1)  The act of June 2, 1915 (P.L.736, No.338), known as
    22     the Workers' Compensation Act.
    23         (2)  The act of May 17, 1921 (P.L.682, No.284), known as
    24     The Insurance Company Law of 1921.
    25         (3)  The act of December 29, 1972 (P.L.1701, No.364),
    26     known as the Health Maintenance Organization Act.
    27         (4)  The act of May 18, 1976 (P.L.123, No.54), known as
    28     the Individual Accident and Sickness Insurance Minimum
    29     Standards Act.
    30         (5)  40 Pa.C.S. Ch. 61 (relating to hospital plan
    20070H2098B4346                  - 2 -     

     1     corporations).
     2         (6)  40 Pa.C.S. Ch. 63 (relating to professional health
     3     services plan corporations).
     4     "Medical assistance."  The Commonwealth's medical assistance
     5  program established under the act of June 13, 1967 (P.L.31,
     6  No.21), known as the Public Welfare Code.
     7     "Preventable serious adverse event."  A clearly defined
     8  condition or negative consequence of care that results in
     9  unintended injury or illness that could have been anticipated
    10  and prepared for, but that occurs because of an error or other
    11  system failure and results in a patient's death, loss of a body
    12  part, disability or loss of bodily function lasting more than
    13  seven days.
    14  Section 3.  Payment policy for preventable serious adverse
    15                 events.
    16     (a)  General rule.--The following criteria shall be used by
    17  health payors in determining when payment or partial payment to
    18  a health care provider will be withheld:
    19         (1)  A preventable serious adverse event must occur.
    20         (2)  The preventable serious adverse event must be within
    21     the control of the health care provider.
    22         (3)  The preventable serious adverse event must occur in
    23     a health care facility.
    24     (b)  Language addressing payment policy.--Payments can only
    25  be withheld by health payors for services related to a
    26  preventable serious adverse event or care made necessary by the
    27  preventable serious adverse event if the agreement or contract
    28  between the health payor and health care provider contains
    29  language addressing payment policy for preventable serious
    30  adverse events.
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     1     (c)  Restriction.--Health care providers shall not seek
     2  payment directly from patients or the responsible party of the
     3  patient for preventable serious adverse events.
     4  Section 4.  Duties of Department of Public Welfare.
     5     (a)  Department responsibilities.--The Department of Public
     6  Welfare is responsible for the following:
     7         (1)  Determining payment policy under medical assistance
     8     with respect to reduced reimbursements to health care
     9     providers for preventable serious adverse events. This
    10     payment policy includes the criteria and clearly stated
    11     payment policies affecting health care providers.
    12         (2)  Publishing the payment policy in the Pennsylvania
    13     Bulletin following a 30-day public comment period.
    14     (b)  Ongoing reviews.--Nothing in this section shall affect
    15  ongoing reviews of medical assistance services conducted by the
    16  Department of Public Welfare.
    17     (c)  Hospital payment policy.--Nothing in this section shall
    18  require the department to alter, amend or reissue any payment
    19  policy for inpatient hospitals relating to preventable serious
    20  adverse events that was promulgated prior to the enactment of
    21  this act.
    22  Section 5.  Duties of Insurance Department.
    23     (a)  Notice of preventable serious adverse events.--The
    24  department shall annually notify health payors of the list of
    25  preventable serious adverse events that CMS is using under the
    26  Medicare program and for which health payors may withhold
    27  reimbursement under section 3.
    28     (b)  Notice of CMS rule.--The department shall transmit
    29  notice of the effective date of the CMS Hospital-Acquired
    30  Conditions, Including Infections, Final Rule, to the Legislative
    20070H2098B4346                  - 4 -     

     1  Reference Bureau for publication in the Pennsylvania Bulletin.
     2  Section 6.  Duties of Department of Health.
     3     In accordance with the act of July 19, 1979 (P.L.130, No.48),
     4  known as the Health Care Facilities Act, the Department of
     5  Health shall be responsible for investigating patient complaints
     6  regarding a health care facility that is seeking payment
     7  directly from the patient for a preventable serious adverse
     8  event.
     9  Section 7.  Duties of Department of State.
    10     The Department of State shall be responsible for
    11  investigating complaints regarding a health care provider that
    12  is not a health care facility that is seeking or causing to be
    13  sought payment directly from the patient or responsible party of
    14  the patient for a preventable serious adverse event.
    15  Section 19.  Applicability.
    16     This act shall apply to preventable serious adverse events
    17  that occur after the later of the following:
    18         (1)  Publication of the notice under section 5(b).
    19         (2)  October 1, 2008.
    20  Section 20.  Effective date.
    21     This act shall take effect immediately.
    22  SECTION 1.  SHORT TITLE.                                          <--
    23     THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE PREVENTABLE
    24  SERIOUS ADVERSE EVENTS ACT.
    25  SECTION 2.  DEFINITIONS.
    26     THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL
    27  HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
    28  CONTEXT CLEARLY INDICATES OTHERWISE:
    29     "HEALTH CARE FACILITY."  A HEALTH CARE FACILITY AS DEFINED
    30  UNDER SECTION 802.1 OF THE ACT OF JULY 19, 1979 (P.L.130,
    20070H2098B4346                  - 5 -     

     1  NO.48), KNOWN AS THE HEALTH CARE FACILITIES ACT, OR AN ENTITY
     2  LICENSED AS A HOSPITAL UNDER THE ACT OF JUNE 13, 1967 (P.L.31,
     3  NO.21), KNOWN AS THE PUBLIC WELFARE CODE.
     4     "HEALTH CARE PROVIDER."  A HEALTH CARE FACILITY OR A PERSON,
     5  INCLUDING A CORPORATION, UNIVERSITY OR OTHER EDUCATIONAL
     6  INSTITUTION, LICENSED OR APPROVED BY THE COMMONWEALTH TO PROVIDE
     7  HEALTH CARE OR PROFESSIONAL MEDICAL SERVICES. THE TERM SHALL
     8  INCLUDE, BUT NOT BE LIMITED TO, A PHYSICIAN, A CERTIFIED NURSE
     9  MIDWIFE, A PODIATRIST, A CERTIFIED REGISTERED NURSE
    10  PRACTITIONER, A PHYSICIAN ASSISTANT, A CHIROPRACTOR, A HOSPITAL,
    11  AN AMBULATORY SURGERY CENTER, A NURSING HOME OR A BIRTH CENTER.
    12     "HEALTH PAYOR."  AN INDIVIDUAL OR ENTITY PAYING FOR HEALTH
    13  SERVICES ON BEHALF OF ANOTHER.
    14     "MEDICAL ASSISTANCE."  THE COMMONWEALTH'S MEDICAL ASSISTANCE
    15  PROGRAM ESTABLISHED UNDER THE ACT OF JUNE 13, 1967 (P.L.31,
    16  NO.21), KNOWN AS THE PUBLIC WELFARE CODE.
    17     "NATIONAL QUALITY FORUM."  A NOT-FOR-PROFIT MEMBERSHIP
    18  ORGANIZATION CREATED TO DEVELOP AND IMPLEMENT A NATIONAL
    19  STRATEGY FOR HEALTH CARE QUALITY MEASUREMENT AND REPORTING.
    20     "PREVENTABLE SERIOUS ADVERSE EVENT."  AN EVENT THAT OCCURS IN
    21  A HEALTH CARE FACILITY THAT IS WITHIN THE HEALTH CARE PROVIDER'S
    22  CONTROL TO AVOID, BUT THAT OCCURS BECAUSE OF AN ERROR OR OTHER
    23  SYSTEM FAILURE AND RESULTS IN A PATIENT'S DEATH, LOSS OF BODY
    24  PART, DISFIGUREMENT, DISABILITY OR LOSS OF BODILY FUNCTION
    25  LASTING MORE THAN SEVEN DAYS OR STILL PRESENT AT THE TIME OF
    26  DISCHARGE FROM A HEALTH CARE FACILITY. SUCH EVENTS SHALL BE
    27  WITHIN THE LIST OF REPORTABLE SERIOUS EVENTS ADOPTED BY THE
    28  NATIONAL QUALITY FORUM.
    29  SECTION 3.  PAYMENT POLICY FOR PREVENTABLE SERIOUS ADVERSE
    30                 EVENTS.
    20070H2098B4346                  - 6 -     

     1     (A)  GENERAL RULE.--HEALTH CARE PROVIDERS MAY NOT KNOWINGLY
     2  SEEK PAYMENT FROM HEALTH PAYORS, PATIENTS OR THE RESPONSIBLE
     3  PARTY OF THE PATIENT FOR A PREVENTABLE SERIOUS ADVERSE EVENT OR
     4  SERVICES REQUIRED TO CORRECT OR TREAT THE PROBLEM CREATED BY
     5  SUCH AN EVENT WHEN SUCH AN EVENT OCCURRED UNDER THEIR CONTROL.
     6     (B)  REFUNDS.--A HEALTH CARE PROVIDER WHO DISCOVERS THAT
     7  PAYMENT HAS UNKNOWINGLY BEEN SOUGHT FOR A PREVENTABLE SERIOUS
     8  ADVERSE EVENT OR SERVICES REQUIRED TO CORRECT OR TREAT THE
     9  PROBLEM CREATED BY SUCH AN EVENT SHALL IMMEDIATELY NOTIFY THE
    10  HEALTH PAYOR, PATIENT OR THE RESPONSIBLE PARTY OF THE PATIENT
    11  AND SHALL REFUND ANY PAYMENT RECEIVED WITHIN 30 DAYS OF
    12  DISCOVERY OR RECEIPT OF PAYMENT, WHICHEVER IS LATER.
    13     (C)  NOTIFICATION.--A HEALTH CARE PAYOR WHO DISCOVERS THAT
    14  PAYMENT HAS BEEN SOUGHT FOR A PREVENTABLE SERIOUS ADVERSE EVENT
    15  OR SERVICES REQUIRED TO CORRECT OR TREAT A PROBLEM CREATED BY
    16  SUCH AN EVENT SHALL NOTIFY THE HEALTH CARE PROVIDER THAT PAYMENT
    17  MAY NOT BE SOUGHT FOR SUCH AN EVENT OR SERVICES AND THAT PAYMENT
    18  SHALL NOT BE MADE FOR SUCH EVENTS OR SERVICES.
    19     (D)  LIABILITY.--ANY INFORMATION PROVIDED TO ANY HEALTH CARE
    20  PAYOR OR HEALTH CARE PROVIDER, IN COMPLIANCE WITH SUBSECTIONS
    21  (B) AND (C), SHALL NOT BE DISCOVERABLE OR ADMISSIBLE IN ANY
    22  CIVIL OR ADMINISTRATIVE ACTION RELATED TO THE ACT OF MARCH 20,
    23  2002 (P.L.154, NO.13), KNOWN AS THE MEDICAL CARE AVAILABILITY
    24  AND REDUCTION OF ERROR (MCARE) ACT.
    25  SECTION 4.  DUTIES OF DEPARTMENT OF HEALTH.
    26     (A)  PUBLISHING OF UPDATES.--THE DEPARTMENT SHALL PUBLISH IN
    27  THE PENNSYLVANIA BULLETIN ANY UPDATES TO THE LIST OF REPORTABLE
    28  SERIOUS ADVERSE EVENTS ADOPTED BY THE NATIONAL QUALITY FORUM
    29  WITHIN 30 DAYS OF THE UPDATE ISSUED BY THE NATIONAL QUALITY
    30  FORUM.
    20070H2098B4346                  - 7 -     

     1     (B)  HEALTH DEPARTMENT RESPONSIBILITY.--IN ACCORDANCE WITH
     2  THE ACT OF JULY 19, 1979 (P.L.130, NO.48), KNOWN AS THE HEALTH
     3  CARE FACILITIES ACT, THE DEPARTMENT OF HEALTH SHALL BE
     4  RESPONSIBLE FOR INVESTIGATING PATIENT COMPLAINTS REGARDING A
     5  HEALTH CARE FACILITY THAT IS SEEKING PAYMENT DIRECTLY FROM THE
     6  PATIENT OR HEALTH CARE PAYOR FOR A PREVENTABLE SERIOUS ADVERSE
     7  EVENT.
     8  SECTION 5.  DUTIES OF DEPARTMENT OF STATE.
     9     THE DEPARTMENT OF STATE SHALL BE RESPONSIBLE FOR
    10  INVESTIGATING PATIENT COMPLAINTS REGARDING A HEALTH CARE
    11  PROVIDER THAT IS NOT A HEALTH CARE FACILITY THAT IS SEEKING OR
    12  CAUSING TO BE SOUGHT PAYMENT DIRECTLY FROM THE PATIENT OR HEALTH
    13  CARE PAYOR FOR A PREVENTABLE SERIOUS ADVERSE EVENT.
    14  SECTION 6.  APPLICABILITY.
    15     (A)  HOSPITAL MEDICAL ASSISTANCE PAYMENT POLICY.--NOTHING IN
    16  THIS ACT SHALL REQUIRE THE DEPARTMENT OF PUBLIC WELFARE TO
    17  ALTER, AMEND OR REISSUE ANY PAYMENT POLICY FOR INPATIENT
    18  HOSPITALS RELATING TO PREVENTABLE SERIOUS ADVERSE EVENTS THAT
    19  WAS PROMULGATED PRIOR TO THE ENACTMENT OF THIS ACT. ANY
    20  MODIFICATIONS TO THE DEPARTMENT OF PUBLIC WELFARE PAYMENT POLICY
    21  PROMULGATED ON OR AFTER THE DATE OF ENACTMENT OF THIS ACT FOR A
    22  HEALTH CARE PROVIDER FOR A PREVENTABLE SERIOUS ADVERSE EVENT
    23  SHALL REQUIRE A 30-DAY PUBLIC COMMENT PERIOD.
    24     (B)  CONTRACTS.--NOTHING IN THIS ACT SHALL PROHIBIT A HEALTH
    25  CARE PROVIDER AND PAYOR FROM ESTABLISHING BY CONTRACT ANY
    26  POLICIES AND PROCEDURES ASSOCIATED WITH SERIOUS PREVENTABLE
    27  ADVERSE EVENTS NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS
    28  ACT.
    29     (C)  REPORTING.--
    30         (1)  HEALTH CARE PROVIDERS SHALL INCLUDE ALL APPLICABLE
    20070H2098B4346                  - 8 -     

     1     MEDICAL CODES IN MAKING REPORTS IN COMPLIANCE WITH THE ACT OF
     2     JULY 8, 1986 (P.L.408, NO.89), KNOWN AS THE HEALTH CARE COST
     3     CONTAINMENT ACT.
     4         (2)  A PREVENTABLE SERIOUS ADVERSE EVENT SHALL BE
     5     REPORTED PURSUANT TO THE REQUIREMENTS OF THE ACT OF MARCH 20,
     6     2002 (P.L.154, NO.13), KNOWN AS THE MEDICAL CARE AVAILABILITY
     7     AND REDUCTION OF ERROR (MCARE) ACT.
     8  SECTION 7.  EFFECTIVE DATE.
     9     THIS ACT SHALL TAKE EFFECT IN 180 DAYS.














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