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                                 HOUSE AMENDED
        PRIOR PRINTER'S NOS. 1488, 1491, 1510,        PRINTER'S NO. 1827
        1621

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 1137 Session of 2007


        INTRODUCED BY D. WHITE, RAFFERTY, PILEGGI, ORIE, SCARNATI,
           ROBBINS, ERICKSON, GORDNER, C. WILLIAMS, FONTANA, MADIGAN,
           ARMSTRONG, PIPPY, FERLO, WONDERLING, WAUGH, BAKER, REGOLA,
           BROWNE AND BOSCOLA, OCTOBER 23, 2007

        AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
           MARCH 12, 2008

                                     AN ACT

     1  Amending the act of March 20, 2002 (P.L.154, No.13), entitled
     2     "An act reforming the law on medical professional liability;
     3     providing for patient safety and reporting; establishing the
     4     Patient Safety Authority and the Patient Safety Trust Fund;
     5     abrogating regulations; providing for medical professional
     6     liability informed consent, damages, expert qualifications,
     7     limitations of actions and medical records; establishing the
     8     Interbranch Commission on Venue; providing for medical
     9     professional liability insurance; establishing the Medical
    10     Care Availability and Reduction of Error Fund; providing for
    11     medical professional liability claims; establishing the Joint
    12     Underwriting Association; regulating medical professional
    13     liability insurance; providing for medical licensure
    14     regulation; providing for administration; imposing penalties;
    15     and making repeals," further providing for medical             <--
    16     professional liability insurance, for the Medical Care
    17     Availability and Reduction of Error Fund and for actuarial
    18     data; providing for the Medical Care Availability and          <--
    19     Reduction of Error (Mcare) FOR PENNSYLVANIANS (MCAP) Reserve   <--
    20     Fund; and further providing for abatement program, for the     <--
    21     Health Care Provider Retention Account and for expiration;     <--
    22     AND PROVIDING FOR EXPIRATION OF CERTAIN SECTIONS. FURTHER      <--
    23     PROVIDING FOR MEDICAL PROFESSIONAL LIABILITY INSURANCE, FOR
    24     THE MEDICAL CARE AVAILABILITY AND REDUCTION OF ERROR FUND AND
    25     FOR ACTUARIAL DATA; ESTABLISHING THE PENNSYLVANIA ACCESS TO
    26     BASIC CARE (PA ABC) PROGRAM FUND AND THE CONTINUING ACCESS
    27     WITH RELIEF FOR EMPLOYERS (CARE) FUND; FURTHER DEFINING
    28     "HEALTH CARE PROVIDER"; FURTHER PROVIDING FOR THE HEALTH CARE
    29     PROVIDER RETENTION PROGRAM; ESTABLISHING THE SUPPLEMENTAL


     1     ASSISTANCE AND FUNDING ACCOUNT; FURTHER PROVIDING FOR
     2     EXPIRATION OF THE HEALTH CARE PROVIDER RETENTION PROGRAM;
     3     ESTABLISHING THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
     4     PROGRAM; PROVIDING FOR CONTINUING ACCESS WITH RELIEF FOR
     5     EMPLOYERS (CARE) GRANTS, FOR HEALTH CARE COVERAGE FOR CERTAIN
     6     ADULTS, INDIVIDUALS, EMPLOYEES AND EMPLOYERS AND FOR
     7     EXPIRATION OF CERTAIN SECTIONS; AND REPEALING PROVISIONS OF
     8     THE TOBACCO SETTLEMENT ACT.

     9     The General Assembly of the Commonwealth of Pennsylvania
    10  hereby enacts as follows:
    11     Section 1.  Sections 711, 712 and 745 of the act of March 20,  <--
    12  2002 (P.L.154, No.13), known as the Medical Care Availability
    13  and Reduction of Error (Mcare) Act, are amended to read:
    14  Section 711.  Medical professional liability insurance.
    15     (a)  Requirement.--A health care provider providing health
    16  care services in this Commonwealth shall:
    17         (1)  purchase medical professional liability insurance
    18     from an insurer which is licensed or approved by the
    19     department; or
    20         (2)  provide self-insurance.
    21     (b)  Proof of insurance.--A health care provider required by
    22  subsection (a) to purchase medical professional liability
    23  insurance or provide self-insurance shall submit proof of
    24  insurance or self-insurance to the department within 60 days of
    25  the policy being issued.
    26     (c)  Failure to provide proof of insurance.--If a health care
    27  provider fails to submit the proof of insurance or self-
    28  insurance required by subsection (b), the department shall,
    29  after providing the health care provider with notice, notify the
    30  health care provider's licensing authority. A health care
    31  provider's license shall be suspended or revoked by its
    32  licensure board or agency if the health care provider fails to
    33  comply with any of the provisions of this chapter.

    20070S1137B1827                  - 2 -     

     1     (d)  Basic coverage limits.--A health care provider shall
     2  insure or self-insure medical professional liability in
     3  accordance with the following:
     4         (1)  For policies issued or renewed in the calendar year
     5     2002, the basic insurance coverage shall be:
     6             (i)  $500,000 per occurrence or claim and $1,500,000
     7         per annual aggregate for a health care provider who
     8         conducts more than 50% of its health care business or
     9         practice within this Commonwealth and that is not a
    10         hospital.
    11             (ii)  $500,000 per occurrence or claim and $1,500,000
    12         per annual aggregate for a health care provider who
    13         conducts 50% or less of its health care business or
    14         practice within this Commonwealth.
    15             (iii)  $500,000 per occurrence or claim and
    16         $2,500,000 per annual aggregate for a hospital.
    17         (2)  For policies issued or renewed in the calendar years
    18     2003, 2004 and 2005, the basic insurance coverage shall be:
    19             (i)  $500,000 per occurrence or claim and $1,500,000
    20         per annual aggregate for a participating health care
    21         provider that is not a hospital.
    22             (ii)  $1,000,000 per occurrence or claim and
    23         $3,000,000 per annual aggregate for a nonparticipating
    24         health care provider.
    25             (iii)  $500,000 per occurrence or claim and
    26         $2,500,000 per annual aggregate for a hospital.
    27         (3)  Unless the commissioner finds pursuant to section
    28     745(a) that additional basic insurance coverage capacity is
    29     not available, for policies issued or renewed in calendar
    30     year 2006 and each year thereafter subject to paragraph (4),
    20070S1137B1827                  - 3 -     

     1     the basic insurance coverage shall be:
     2             (i)  Up to $750,000 per occurrence or claim and
     3         $2,250,000 per annual aggregate for a participating
     4         health care provider that is not a hospital.
     5             (ii)  Up to $1,000,000 per occurrence or claim and
     6         $3,000,000 per annual aggregate for a nonparticipating
     7         health care provider.
     8             (iii)  Up to $750,000 per occurrence or claim and
     9         $3,750,000 per annual aggregate for a hospital.
    10     If the commissioner finds pursuant to section 745(a) that
    11     additional basic insurance coverage capacity is not
    12     available, the basic insurance coverage requirements shall
    13     remain at the level required by paragraph (2); and the
    14     commissioner shall conduct a study every [two years] year
    15     until the commissioner finds that additional basic insurance
    16     coverage capacity is available, at which time the
    17     commissioner shall increase the required basic insurance
    18     coverage in accordance with this paragraph.
    19         (4)  Unless the commissioner finds pursuant to section
    20     745(b) that additional basic insurance coverage capacity is
    21     not available, for policies issued or renewed [three] two
    22     years after the increase in coverage limits required by
    23     paragraph (3) and for each year thereafter, the basic
    24     insurance coverage shall be:
    25             (i)  Up to $1,000,000 per occurrence or claim and
    26         $3,000,000 per annual aggregate for a participating
    27         health care provider that is not a hospital.
    28             (ii)  Up to $1,000,000 per occurrence or claim and
    29         $3,000,000 per annual aggregate for a nonparticipating
    30         health care provider.
    20070S1137B1827                  - 4 -     

     1             (iii)  Up to $1,000,000 per occurrence or claim and
     2         $4,500,000 per annual aggregate for a hospital.
     3     If the commissioner finds pursuant to section 745(b) that
     4     additional basic insurance coverage capacity is not
     5     available, the basic insurance coverage requirements shall
     6     remain at the level required by paragraph (3); and the
     7     commissioner shall conduct a study every [two years] year
     8     until the commissioner finds that additional basic insurance
     9     coverage capacity is available, at which time the
    10     commissioner shall increase the required basic insurance
    11     coverage in accordance with this paragraph.
    12         (5)  The amount of basic insurance coverage per
    13     occurrence or claim under paragraphs (3) and (4) shall be no
    14     less than $500,000 and shall be set in $50,000 increments.
    15         (6)  In no event shall the total coverage for basic
    16     primary insurance and the fund, per occurrence or claim, be
    17     less than $1,000,000 or less than $3,000,000 per annual
    18     aggregate for a participating or nonparticipating health care
    19     provider, except hospitals which have total coverage limits
    20     of not less than $1,000,000 per occurrence or less than
    21     $4,500,000 per annual aggregate.
    22     (e)  Fund participation.--A participating health care
    23  provider shall be required to participate in the fund.
    24     (f)  Self-insurance.--
    25         (1)  If a health care provider self-insures its medical
    26     professional liability, the health care provider shall submit
    27     its self-insurance plan, such additional information as the
    28     department may require and the examination fee to the
    29     department for approval.
    30         (2)  The department shall approve the plan if it
    20070S1137B1827                  - 5 -     

     1     determines that the plan constitutes protection equivalent to
     2     the insurance required of a health care provider under
     3     subsection (d).
     4     (g)  Basic insurance liability.--
     5         (1)  An insurer providing medical professional liability
     6     insurance shall not be liable for payment of a claim against
     7     a health care provider for any loss or damages awarded in a
     8     medical professional liability action in excess of the basic
     9     insurance coverage required by subsection (d) unless the
    10     health care provider's medical professional liability
    11     insurance policy or self-insurance plan provides for a higher
    12     limit.
    13         (2)  If a claim exceeds the limits of a participating
    14     health care provider's basic insurance coverage or self-
    15     insurance plan, the fund shall be responsible for payment of
    16     the claim against the participating health care provider up
    17     to the fund liability limits.
    18     (h)  Excess insurance.--
    19         (1)  No insurer providing medical professional liability
    20     insurance with liability limits in excess of the fund's
    21     liability limits to a participating health care provider
    22     shall be liable for payment of a claim against the
    23     participating health care provider for a loss or damages in a
    24     medical professional liability action except the losses and
    25     damages in excess of the fund coverage limits.
    26         (2)  No insurer providing medical professional liability
    27     insurance with liability limits in excess of the fund's
    28     liability limits to a participating health care provider
    29     shall be liable for any loss resulting from the insolvency or
    30     dissolution of the fund.
    20070S1137B1827                  - 6 -     

     1     (i)  Governmental entities.--A governmental entity may
     2  satisfy its obligations under this chapter, as well as the
     3  obligations of its employees to the extent of their employment,
     4  by either purchasing medical professional liability insurance or
     5  assuming an obligation as a self-insurer, and paying the
     6  assessments under this chapter.
     7     (j)  Exemptions.--The following participating health care
     8  providers shall be exempt from this chapter:
     9         (1)  A physician who exclusively practices the specialty
    10     of forensic pathology.
    11         (2)  A participating health care provider who is a member
    12     of the Pennsylvania military forces while in the performance
    13     of the member's assigned duty in the Pennsylvania military
    14     forces under orders.
    15         (3)  A retired licensed participating health care
    16     provider who provides care only to the provider or the
    17     provider's immediate family members.
    18  Section 712.  Medical Care Availability and Reduction of Error
    19                 Fund.
    20     (a)  Establishment.--There is hereby established within the
    21  State Treasury a special fund to be known as the Medical Care
    22  Availability and Reduction of Error Fund. Money in the fund
    23  shall be used to pay claims against participating health care
    24  providers for losses or damages awarded in medical professional
    25  liability actions against them in excess of the basic insurance
    26  coverage required by section 711(d), liabilities transferred in
    27  accordance with subsection (b) and for the administration of the
    28  fund.
    29     (b)  Transfer of assets and liabilities.--
    30         (1)  (i)  The money in the Medical Professional Liability
    20070S1137B1827                  - 7 -     

     1         Catastrophe Loss Fund established under section 701(d) of
     2         the former act of October 15, 1975 (P.L.390, No.111),
     3         known as the Health Care Services Malpractice Act, is
     4         transferred to the fund.
     5             (ii)  The rights of the Medical Professional
     6         Liability Catastrophe Loss Fund established under section
     7         701(d) of the former Health Care Services Malpractice Act
     8         are transferred to and assumed by the fund.
     9         (2)  The liabilities and obligations of the Medical
    10     Professional Liability Catastrophe Loss Fund established
    11     under section 701(d) of the former Health Care Services
    12     Malpractice Act are transferred to and assumed by the fund.
    13     (c)  Fund liability limits.--
    14         (1)  For calendar year 2002, the limit of liability of
    15     the fund created in section 701(d) of the former Health Care
    16     Services Malpractice Act for each health care provider that
    17     conducts more than 50% of its health care business or
    18     practice within this Commonwealth and for each hospital shall
    19     be $700,000 for each occurrence and $2,100,000 per annual
    20     aggregate.
    21         (2)  The limit of liability of the fund for each
    22     participating health care provider shall be as follows:
    23             (i)  For calendar year 2003 and each year thereafter,
    24         the limit of liability of the fund shall be $500,000 for
    25         each occurrence and $1,500,000 per annual aggregate.
    26             (ii)  If the basic insurance coverage requirement is
    27         increased in accordance with section 711(d)(3) or (4)
    28         and, notwithstanding subparagraph (i), for each calendar
    29         year following the increase in the basic insurance
    30         coverage requirement, the limit of liability of the fund
    20070S1137B1827                  - 8 -     

     1         shall be [$250,000 for each occurrence and $750,000 per
     2         annual aggregate.
     3             (iii)  If the basic insurance coverage requirement is
     4         increased in accordance with section 711(d)(4) and,
     5         notwithstanding subparagraphs (i) and (ii), for each
     6         calendar year following the increase in the basic
     7         insurance coverage requirement, the limit of liability of
     8         the fund shall be zero] $1,000,000 per occurrence and
     9         $3,000,000 per annual aggregate, except hospitals which
    10         shall be $1,000,000 per occurrence and $4,500,000 per
    11         annual aggregate, minus the amount the commissioner
    12         determines for basic insurance coverage under section
    13         711(d)(3) and (4).
    14     (d)  Assessments.--
    15         (1)  For calendar year 2003 and for each year thereafter,
    16     the fund shall be funded by an assessment on each
    17     participating health care provider. Assessments shall be
    18     levied by the department on or after January 1 of each year.
    19     The assessment shall be based on the prevailing primary
    20     premium for each participating health care provider and
    21     shall, in the aggregate, produce an amount sufficient to do
    22     all of the following:
    23             (i)  Reimburse the fund for the payment of reported
    24         claims which became final during the preceding claims
    25         period.
    26             (ii)  Pay expenses of the fund incurred during the
    27         preceding claims period.
    28             (iii)  Pay principal and interest on moneys
    29         transferred into the fund in accordance with section
    30         713(c).
    20070S1137B1827                  - 9 -     

     1             (iv)  Provide a reserve that shall be 10% of the sum
     2         of subparagraphs (i), (ii) and (iii).
     3         (2)  The department shall notify all basic insurance
     4     coverage insurers and self-insured participating health care
     5     providers of the assessment by November 1 for the succeeding
     6     calendar year. Beginning January 1, 2008, the department
     7     shall bill and collect the assessment from all participating
     8     health care providers.
     9         (3)  Any appeal of the assessment shall be filed with the
    10     department.
    11         (4)  FOR CALENDAR YEAR BEGINNING JANUARY 1, 2008, THE      <--
    12     DEPARTMENT MAY DELAY OR SUSPEND THE COLLECTION OF ASSESSMENTS
    13     UNTIL THE REQUIREMENTS UNDER SECTION 752(B) ARE MET.
    14     (e)  Discount on surcharges and assessments.--
    15         (1)  For calendar year 2002, the department shall
    16     discount the aggregate surcharge imposed under section
    17     701(e)(1) of the Health Care Services Malpractice Act by 5%
    18     of the aggregate surcharge imposed under that section for
    19     calendar year 2001 in accordance with the following:
    20             (i)  Fifty percent of the aggregate discount shall be
    21         granted equally to hospitals and to participating health
    22         care providers that were surcharged as members of one of
    23         the four highest rate classes of the prevailing primary
    24         premium.
    25             (ii)  Notwithstanding subparagraph (i), 50% of the
    26         aggregate discount shall be granted equally to all
    27         participating health care providers.
    28             (iii)  The department shall issue a credit to a
    29         participating health care provider who, prior to the
    30         effective date of this section, has paid the surcharge
    20070S1137B1827                 - 10 -     

     1         imposed under section 701(e)(1) of the former Health Care
     2         Services Malpractice Act for calendar year 2002 prior to
     3         the effective date of this section.
     4         (2)  For calendar years 2003 and 2004, the department
     5     shall discount the aggregate assessment imposed under
     6     subsection (d) for each calendar year by 10% of the aggregate
     7     surcharge imposed under section 701(e)(1) of the former
     8     Health Care Services Malpractice Act for calendar year 2001
     9     in accordance with the following:
    10             (i)  Fifty percent of the aggregate discount shall be
    11         granted equally to hospitals and to participating health
    12         care providers that were assessed as members of one of
    13         the four highest rate classes of the prevailing primary
    14         premium.
    15             (ii)  Notwithstanding subparagraph (i), 50% of the
    16         aggregate discount shall be granted equally to all
    17         participating health care providers.
    18         (3)  For calendar years 2005 and thereafter, if the basic
    19     insurance coverage requirement is increased in accordance
    20     with section 711(d)(3) or (4), the department may discount
    21     the aggregate assessment imposed under subsection (d) by an
    22     amount not to exceed the aggregate sum to be deposited in the
    23     fund in accordance with subsection (m).
    24     (f)  Updated rates.--The joint underwriting association shall
    25  file updated rates for all health care providers with the
    26  commissioner by May 1 of each year. The department shall review
    27  and may adjust the prevailing primary premium in line with any
    28  applicable changes which have been approved by the commissioner.
    29     (g)  Additional adjustments of the prevailing primary
    30  premium.--The department shall adjust the applicable prevailing
    20070S1137B1827                 - 11 -     

     1  primary premium of each participating health care provider in
     2  accordance with the following:
     3         (1)  The applicable prevailing primary premium of a
     4     participating health care provider which is not a hospital
     5     may be adjusted through an increase in the individual
     6     participating health care provider's prevailing primary
     7     premium not to exceed 20%. Any adjustment shall be based upon
     8     the frequency of claims paid by the fund on behalf of the
     9     individual participating health care provider during the past
    10     five most recent claims periods and shall be in accordance
    11     with the following:
    12             (i)  If three claims have been paid during the past
    13         five most recent claims periods by the fund, a 10%
    14         increase shall be charged.
    15             (ii)  If four or more claims have been paid during
    16         the past five most recent claims periods by the fund, a
    17         20% increase shall be charged.
    18         (2)  The applicable prevailing primary premium of a
    19     participating health care provider which is not a hospital
    20     and which has not had an adjustment under paragraph (1) may
    21     be adjusted through an increase in the individual
    22     participating health care provider's prevailing primary
    23     premium not to exceed 20%. Any adjustment shall be based upon
    24     the severity of at least two claims paid by the fund on
    25     behalf of the individual participating health care provider
    26     during the past five most recent claims periods.
    27         (3)  The applicable prevailing primary premium of a
    28     participating health care provider not engaged in direct
    29     clinical practice on a full-time basis may be adjusted
    30     through a decrease in the individual participating health
    20070S1137B1827                 - 12 -     

     1     care provider's prevailing primary premium not to exceed 10%.
     2     Any adjustment shall be based upon the lower risk associated
     3     with the less-than-full-time direct clinical practice.
     4         (4)  The applicable prevailing primary premium of a
     5     hospital may be adjusted through an increase or decrease in
     6     the individual hospital's prevailing primary premium not to
     7     exceed 20%. Any adjustment shall be based upon the frequency
     8     and severity of claims paid by the fund on behalf of other
     9     hospitals of similar class, size, risk and kind within the
    10     same defined region during the past five most recent claims
    11     periods.
    12     (h)  Self-insured health care providers.--A participating
    13  health care provider that has an approved self-insurance plan
    14  shall be assessed an amount equal to the assessment imposed on a
    15  participating health care provider of like class, size, risk and
    16  kind as determined by the department.
    17     (i)  Change in basic insurance coverage.--If a participating
    18  health care provider changes the term of its medical
    19  professional liability insurance coverage, the assessment shall
    20  be calculated on an annual basis and shall reflect the
    21  assessment percentages in effect for the period over which the
    22  policies are in effect.
    23     (j)  Payment of claims.--Claims which became final during the
    24  preceding claims period shall be paid on or before December 31
    25  following the August 31 on which they became final.
    26     (k)  Termination.--Upon satisfaction of all liabilities of
    27  the fund, the fund shall terminate. Any balance remaining in the
    28  fund upon such termination shall be returned by the department
    29  to the participating health care providers who participated in
    30  the fund in proportion to their assessments in the preceding
    20070S1137B1827                 - 13 -     

     1  calendar year.
     2     (l)  Sole and exclusive source of funding.--Except as
     3  provided in subsection (m), the surcharges imposed under section
     4  701(e)(1) of the Health Care Services Malpractice Act and
     5  assessments on participating health care providers and any
     6  income realized by investment or reinvestment shall constitute
     7  the sole and exclusive sources of funding for the fund. Nothing
     8  in this subsection shall prohibit the fund from accepting
     9  contributions from nongovernmental sources. A claim against or a
    10  liability of the fund shall not be deemed to constitute a debt
    11  or liability of the Commonwealth or a charge against the General
    12  Fund.
    13     (m)  Supplemental funding.--Notwithstanding the provisions of
    14  75 Pa.C.S. § 6506(b) (relating to surcharge) to the contrary,
    15  beginning January 1, 2004, and for a period of nine calendar
    16  years thereafter, all surcharges levied and collected under 75
    17  Pa.C.S. § 6506(a) by any division of the unified judicial system
    18  shall be remitted to the Commonwealth for deposit in the Medical
    19  Care Availability and Restriction of Error Fund. These funds
    20  shall be used to reduce surcharges and assessments in accordance
    21  with subsection (e). Beginning January 1, 2014, and each year
    22  thereafter, the surcharges levied and collected under 75 Pa.C.S.
    23  § 6506(a) shall be deposited into the General Fund.
    24     (n)  Waiver of right to consent to settlement.--A
    25  participating health care provider may maintain the right to
    26  consent to a settlement in a basic insurance coverage policy for
    27  medical professional liability insurance upon the payment of an
    28  additional premium amount.
    29  Section 745.  Actuarial data.
    30     (a)  Initial study.--The following shall apply:
    20070S1137B1827                 - 14 -     

     1         (1)  No later than April 1, 2005, each insurer providing
     2     medical professional liability insurance in this Commonwealth
     3     shall file loss data as required by the commissioner. For
     4     failure to comply, the commissioner shall impose an
     5     administrative penalty of $1,000 for every day that this data
     6     is not provided in accordance with this paragraph.
     7         (2)  By July 1, 2005, the commissioner shall conduct a
     8     study regarding the availability of additional basic
     9     insurance coverage capacity. The study shall include an
    10     estimate of the total change in medical professional
    11     liability insurance loss-cost resulting from implementation
    12     of this act prepared by an independent actuary. The fee for
    13     the independent actuary shall be borne by the fund. In
    14     developing the estimate, the independent actuary shall
    15     consider all of the following:
    16             (i)  The most recent accident year and ratemaking
    17         data available.
    18             (ii)  Any other relevant factors within or outside
    19         this Commonwealth in accordance with sound actuarial
    20         principles.
    21     (b)  Additional study.--The following shall apply:
    22         (1)  Three years following the increase of the basic
    23     insurance coverage requirement in accordance with section
    24     711(d)(3), each insurer providing medical professional
    25     liability insurance in this Commonwealth shall file loss data
    26     with the commissioner upon request. For failure to comply,
    27     the commissioner shall impose an administrative penalty of
    28     $1,000 for every day that this data is not provided in
    29     accordance with this paragraph.
    30         (2)  Three months following the request made under
    20070S1137B1827                 - 15 -     

     1     paragraph (1), the commissioner shall conduct a study
     2     regarding the availability of additional basic insurance
     3     coverage capacity. The study shall include an estimate of the
     4     total change in medical professional liability insurance
     5     loss-cost resulting from implementation of this act prepared
     6     by an independent actuary. The fee for the independent
     7     actuary shall be borne by the fund. In developing the
     8     estimate, the independent actuary shall consider all of the
     9     following:
    10             (i)  The most recent accident year and ratemaking
    11         data available.
    12             (ii)  Any other relevant factors including economic
    13         considerations within or outside this Commonwealth in
    14         accordance with sound actuarial principles.
    15     Section 2.  Chapter 7 of the act is amended by adding
    16  subchapters A SUBCHAPTER to read:                                 <--
    17                            SUBCHAPTER E                            <--
    18          MEDICAL CARE AVAILABILITY AND REDUCTION OF ERROR
    19                        (MCARE) RESERVE FUND
    20  Section 751.  Establishment.
    21     There is established within the State Treasury a special fund
    22  to be known as the Medical Care Availability and Reduction of
    23  Error (Mcare) Reserve Fund.
    24  Section 752.  Allocation.
    25     Money in the Medical Care Availability and Reduction of Error
    26  (Mcare) Reserve Fund shall be allocated annually as follows:
    27         (1)  Fifty percent of the total amount in the Medical
    28     Care Availability and Reduction of Error (Mcare) Reserve Fund
    29     shall remain in the Medical Care Availability and Reduction
    30     of Error (Mcare) Reserve Fund for the sole purpose of
    20070S1137B1827                 - 16 -     

     1     reducing the unfunded liability of the fund.
     2         (2)  Twenty-five percent of the total amount in the
     3     Medical Care Availability and Reduction of Error (Mcare)
     4     Reserve Fund shall be transferred to the Patient Safety Trust
     5     Fund for use by the Department of Public Welfare for
     6     implementing section 407.
     7         (3)  Twenty-five percent of the total amount in the
     8     Medical Care Availability and Reduction of Error (Mcare)
     9     Reserve Fund shall be transferred to the Medical Safety
    10     Automation Fund.
    11                            SUBCHAPTER F
    12                   MEDICAL SAFETY AUTOMATION FUND
    13  Section 762.  Medical Safety Automation Fund established.
    14     There is established within the State Treasury a special fund
    15  to be known as the Medical Safety Automation Fund. No money in
    16  the Medical Safety Automation Fund shall be used until
    17  legislation is enacted for the purpose of providing medical
    18  safety automation system grants to health care providers under
    19  the act of July 19, 1979 (P.L.130, No.48), known as the Health
    20  Care Facilities Act, a group practice or a community-based
    21  health care provider.
    22                            SUBCHAPTER E                            <--
    23            MEDICAL CARE AVAILABILITY FOR PENNSYLVANIANS
    24                        (MCAP) RESERVE FUND
    25  SECTION 751.  ESTABLISHMENT.
    26     THERE IS ESTABLISHED WITHIN THE STATE TREASURY A SPECIAL FUND
    27  TO BE KNOWN AS THE MEDICAL CARE AVAILABILITY FOR PENNSYLVANIANS
    28  (MCAP) RESERVE FUND.
    29  SECTION 752.  ALLOCATION.
    30     (A)  ANNUAL ALLOCATION.--MONEY IN THE MEDICAL CARE
    20070S1137B1827                 - 17 -     

     1  AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND SHALL BE
     2  ALLOCATED ANNUALLY AS FOLLOWS:
     3         (1)  FIFTY PERCENT OF THE TOTAL AMOUNT IN THE MEDICAL
     4     CARE AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND
     5     SHALL REMAIN IN THE MEDICAL CARE AVAILABILITY FOR
     6     PENNSYLVANIANS (MCAP) RESERVE FUND FOR THE SOLE PURPOSE OF
     7     REDUCING THE UNFUNDED LIABILITY OF THE FUND.
     8         (2)  FIFTY PERCENT OF THE TOTAL AMOUNT IN THE MEDICAL
     9     CARE AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND
    10     SHALL BE DEDICATED TO FUNDING THE PROGRAM ESTABLISHED UNDER
    11     SUBSECTION (B).
    12     (B)  ENACTMENT OF LEGISLATION.--NO MONEY IN THE MEDICAL CARE
    13  AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE FUND SHALL BE
    14  USED UNTIL LEGISLATION IS ENACTED THAT PROVIDES BOTH ASSISTANCE
    15  TO CERTAIN SMALL BUSINESS EMPLOYERS IN COVERING THEIR LOW WAGE
    16  UNINSURED AND ACCESS TO AFFORDABLE HEALTH INSURANCE COVERAGE FOR
    17  UNINSURED LOW-INCOME ADULT PENNSYLVANIANS.
    18     Section 3.  Section 1102 of the act, amended October 27, 2006
    19  (P.L.1198, No.128), is amended to read:
    20  Section 1102.  Abatement program.
    21     (a)  Establishment.--There is hereby established within the
    22  Insurance Department a program to be known as the Health Care
    23  Provider Retention Program. The Insurance Department, in
    24  conjunction with the Department of Public Welfare, shall
    25  administer the program. The program shall provide assistance in
    26  the form of assessment abatements to health care providers for
    27  calendar years 2003, 2004, 2005, 2006 [and], 2007 and 2008 AND    <--
    28  2007, except that licensed podiatrists shall not be eligible for
    29  calendar years 2003 and 2004, and nursing homes shall not be
    30  eligible for calendar years 2003, 2004 and 2005.
    20070S1137B1827                 - 18 -     

     1     (b)  Other [abatement.--] abatements.--
     2         (1)  Emergency physicians not employed full time by a
     3     trauma center or working under an exclusive contract with a
     4     trauma center shall retain eligibility for an abatement
     5     pursuant to section 1104(b)(2) for calendar years 2003, 2004,
     6     2005 and 2006. Commencing in calendar year 2007, these
     7     emergency physicians shall be eligible for an abatement
     8     pursuant to section 1104(b)(1).
     9         (2)  Birth centers shall retain eligibility for abatement
    10     pursuant to section 1104(b)(2) for calendar years 2003, 2004,
    11     2005, 2006 and 2007. Commencing in calendar year 2008, birth
    12     centers shall be eligible for an abatement pursuant to
    13     section 1104(b)(1).
    14     Section 4.  Section 1112 of the act, added December 22, 2005
    15  (P.L.458, No.88), is amended to read:
    16  Section 1112.  Health Care Provider Retention Account.
    17     (a)  Fund established.--There is established within the
    18  General Fund a special account to be known as the Health Care
    19  Provider Retention Account. Funds in the account shall be
    20  subject to an annual appropriation by the General Assembly to
    21  the Department of Public Welfare. The Department of Public
    22  Welfare shall administer funds appropriated under this section
    23  consistent with its duties under section 201(1) of the act of
    24  June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code.
    25     (b)  Transfers from Mcare Fund.--By December 31 of each year,
    26  the Secretary of the Budget may transfer from the Medical Care
    27  Availability and Reduction of Error (Mcare) Fund established in
    28  section 712(a) to the account an amount equal to the difference
    29  between the amount deposited under section 712(m) and the amount
    30  granted as discounts under section 712(e)(2) for that calendar
    20070S1137B1827                 - 19 -     

     1  year.
     2     (c)  Transfers from account.--The Secretary of the Budget may
     3  annually transfer from the account to the Medical Care
     4  Availability and Reduction of Error (MCARE) Fund an amount up to
     5  the aggregate amount of abatements granted by the Insurance
     6  Department under section 1104(b).
     7     (c.1)  Transfers to the Medical Care Availability and          <--
     8  Reduction of Error (Mcare) Reserve Fund.--If the Secretary of
     9  the Budget makes a transfer from the account under subsection
    10  (c), the remaining funds in the account shall be transferred to
    11  the Medical Care Availability and Reduction of Error (Mcare)
    12  Reserve Fund. If the Secretary of the Budget does not make a
    13  transfer from the account under subsection (c), all of the funds
    14  in the account shall be transferred to the Medical Care
    15  Availability and Reduction of Error (Mcare) Reserve Fund.
    16     (C.1)  TRANSFERS TO THE MEDICAL CARE AVAILABILITY FOR          <--
    17  PENNSYLVANIANS (MCAP) RESERVE FUND.--IF THE SECRETARY OF THE
    18  BUDGET MAKES A TRANSFER FROM THE ACCOUNT UNDER SUBSECTION (C),
    19  THE REMAINING FUNDS IN THE ACCOUNT SHALL BE TRANSFERRED TO THE
    20  MEDICAL CARE AVAILABILITY FOR PENNSYLVANIANS (MCAP) RESERVE
    21  FUND. IF THE SECRETARY OF THE BUDGET DOES NOT MAKE A TRANSFER
    22  FROM THE ACCOUNT UNDER SUBSECTION (C), ALL OF THE FUNDS IN THE
    23  ACCOUNT SHALL BE TRANSFERRED TO THE MEDICAL CARE AVAILABILITY
    24  FOR PENNSYLVANIANS (MCAP) RESERVE FUND.
    25     (d)  Other deposits.--The Department of Public Welfare may
    26  deposit any other funds received by the department which it
    27  deems appropriate in the account.
    28     (e)  Administration assistance.--The Insurance Department
    29  shall provide assistance to the Department of Public Welfare in
    30  administering the account.
    20070S1137B1827                 - 20 -     

     1     Section 5.  Section 1115 of the act, amended October 27, 2006
     2  (P.L.1198, No.128), is amended to read:
     3  Section 1115.  Expiration.
     4     The Health Care Provider Retention Program established under
     5  this chapter shall expire December 31, [2008] 2009 2011.          <--
     6     Section 6.  Section 5106 of the act is amended to read:
     7  Section 5106.  Expiration.
     8     Section 312 shall expire on December 31, [2007] 2008.
     9     SECTION 7.  IF THE REQUIREMENTS OF SECTION 752(B) OF THE ACT   <--
    10  ARE NOT SATISFIED WITHIN 90 DAYS AFTER ENACTMENT, SECTIONS 711,
    11  712(D), (E), (G), (H) AND (I) OF THE ACT SHALL EXPIRE JUNE 30,
    12  2008. IF THESE SECTIONS EXPIRE ON JUNE 30, 2008, THE FUND SHALL
    13  CONTINUE TO BE RESPONSIBLE FOR PAYMENT OF CLAIMS AGAINST
    14  PARTICIPATING HEALTH CARE PROVIDERS AS OF JUNE 30, 2008, UP TO
    15  THE FUND LIABILITY LIMITS AS OF JUNE 30, 2008, TO THE EXTENT THE
    16  FUND WOULD HAVE BEEN RESPONSIBLE FOR PAYMENT OF SUCH CLAIMS IF
    17  SECTIONS 711, 712(D), (E), (G), (H) AND (I) OF THE ACT DID NOT
    18  EXPIRE JUNE 30, 2008.
    19     Section 7 8.  This act shall take effect immediately.          <--
    20     SECTION 1.  SECTION 711(D) AND (G) OF THE ACT OF MARCH 20,     <--
    21  2002 (P.L.154, NO.13), KNOWN AS THE MEDICAL CARE AVAILABILITY
    22  AND REDUCTION OF ERROR (MCARE) ACT, ARE AMENDED TO READ:
    23  SECTION 711.  MEDICAL PROFESSIONAL LIABILITY INSURANCE.
    24     * * *
    25     (D)  BASIC COVERAGE LIMITS.--A HEALTH CARE PROVIDER SHALL
    26  INSURE OR SELF-INSURE MEDICAL PROFESSIONAL LIABILITY IN
    27  ACCORDANCE WITH THE FOLLOWING:
    28         (1)  FOR POLICIES ISSUED OR RENEWED IN THE CALENDAR YEAR
    29     2002, THE BASIC INSURANCE COVERAGE SHALL BE:
    30             (I)  $500,000 PER OCCURRENCE OR CLAIM AND $1,500,000
    20070S1137B1827                 - 21 -     

     1         PER ANNUAL AGGREGATE FOR A HEALTH CARE PROVIDER WHO
     2         CONDUCTS MORE THAN 50% OF ITS HEALTH CARE BUSINESS OR
     3         PRACTICE WITHIN THIS COMMONWEALTH AND THAT IS NOT A
     4         HOSPITAL.
     5             (II)  $500,000 PER OCCURRENCE OR CLAIM AND $1,500,000
     6         PER ANNUAL AGGREGATE FOR A HEALTH CARE PROVIDER WHO
     7         CONDUCTS 50% OR LESS OF ITS HEALTH CARE BUSINESS OR
     8         PRACTICE WITHIN THIS COMMONWEALTH.
     9             (III)  $500,000 PER OCCURRENCE OR CLAIM AND
    10         $2,500,000 PER ANNUAL AGGREGATE FOR A HOSPITAL.
    11         (2)  FOR POLICIES ISSUED OR RENEWED IN THE CALENDAR YEARS
    12     2003[, 2004 AND 2005] THROUGH 2008, THE BASIC INSURANCE
    13     COVERAGE SHALL BE:
    14             (I)  $500,000 PER OCCURRENCE OR CLAIM AND $1,500,000
    15         PER ANNUAL AGGREGATE FOR A PARTICIPATING HEALTH CARE
    16         PROVIDER THAT IS NOT A HOSPITAL.
    17             (II)  $1,000,000 PER OCCURRENCE OR CLAIM AND
    18         $3,000,000 PER ANNUAL AGGREGATE FOR A NONPARTICIPATING
    19         HEALTH CARE PROVIDER.
    20             (III)  $500,000 PER OCCURRENCE OR CLAIM AND
    21         $2,500,000 PER ANNUAL AGGREGATE FOR A HOSPITAL.
    22         [(3)  UNLESS THE COMMISSIONER FINDS PURSUANT TO SECTION
    23     745(A) THAT ADDITIONAL BASIC INSURANCE COVERAGE CAPACITY IS
    24     NOT AVAILABLE, FOR POLICIES ISSUED OR RENEWED IN CALENDAR
    25     YEAR 2006 AND EACH YEAR THEREAFTER SUBJECT TO PARAGRAPH (4),
    26     THE BASIC INSURANCE COVERAGE SHALL BE:
    27             (I)  $750,000 PER OCCURRENCE OR CLAIM AND $2,250,000
    28         PER ANNUAL AGGREGATE FOR A PARTICIPATING HEALTH CARE
    29         PROVIDER THAT IS NOT A HOSPITAL.
    30             (II)  $1,000,000 PER OCCURRENCE OR CLAIM AND
    20070S1137B1827                 - 22 -     

     1         $3,000,000 PER ANNUAL AGGREGATE FOR A NONPARTICIPATING
     2         HEALTH CARE PROVIDER.
     3             (III)  $750,000 PER OCCURRENCE OR CLAIM AND
     4         $3,750,000 PER ANNUAL AGGREGATE FOR A HOSPITAL.
     5     IF THE COMMISSIONER FINDS PURSUANT TO SECTION 745(A) THAT
     6     ADDITIONAL BASIC INSURANCE COVERAGE CAPACITY IS NOT
     7     AVAILABLE, THE BASIC INSURANCE COVERAGE REQUIREMENTS SHALL
     8     REMAIN AT THE LEVEL REQUIRED BY PARAGRAPH (2); AND THE
     9     COMMISSIONER SHALL CONDUCT A STUDY EVERY TWO YEARS UNTIL THE
    10     COMMISSIONER FINDS THAT ADDITIONAL BASIC INSURANCE COVERAGE
    11     CAPACITY IS AVAILABLE, AT WHICH TIME THE COMMISSIONER SHALL
    12     INCREASE THE REQUIRED BASIC INSURANCE COVERAGE IN ACCORDANCE
    13     WITH THIS PARAGRAPH.
    14         (4)  UNLESS THE COMMISSIONER FINDS PURSUANT TO SECTION
    15     745(B) THAT ADDITIONAL BASIC INSURANCE COVERAGE CAPACITY IS
    16     NOT AVAILABLE, FOR POLICIES ISSUED OR RENEWED THREE YEARS
    17     AFTER THE INCREASE IN COVERAGE LIMITS REQUIRED BY PARAGRAPH
    18     (3) AND FOR EACH YEAR THEREAFTER, THE BASIC INSURANCE
    19     COVERAGE SHALL BE:
    20             (I)  $1,000,000 PER OCCURRENCE OR CLAIM AND
    21         $3,000,000 PER ANNUAL AGGREGATE FOR A PARTICIPATING
    22         HEALTH CARE PROVIDER THAT IS NOT A HOSPITAL.
    23             (II)  $1,000,000 PER OCCURRENCE OR CLAIM AND
    24         $3,000,000 PER ANNUAL AGGREGATE FOR A NONPARTICIPATING
    25         HEALTH CARE PROVIDER.
    26             (III)  $1,000,000 PER OCCURRENCE OR CLAIM AND
    27         $4,500,000 PER ANNUAL AGGREGATE FOR A HOSPITAL.
    28     IF THE COMMISSIONER FINDS PURSUANT TO SECTION 745(B) THAT
    29     ADDITIONAL BASIC INSURANCE COVERAGE CAPACITY IS NOT
    30     AVAILABLE, THE BASIC INSURANCE COVERAGE REQUIREMENTS SHALL
    20070S1137B1827                 - 23 -     

     1     REMAIN AT THE LEVEL REQUIRED BY PARAGRAPH (3); AND THE
     2     COMMISSIONER SHALL CONDUCT A STUDY EVERY TWO YEARS UNTIL THE
     3     COMMISSIONER FINDS THAT ADDITIONAL BASIC INSURANCE COVERAGE
     4     CAPACITY IS AVAILABLE, AT WHICH TIME THE COMMISSIONER SHALL
     5     INCREASE THE REQUIRED BASIC INSURANCE COVERAGE IN ACCORDANCE
     6     WITH THIS PARAGRAPH.]
     7         (5)  FOR POLICIES ISSUED OR RENEWED IN CALENDAR YEAR
     8     2009, THE BASIC INSURANCE COVERAGE SHALL BE:
     9             (I)  $550,000 PER OCCURRENCE OR CLAIM AND $1,650,000
    10         PER ANNUAL AGGREGATE FOR A PARTICIPATING HEALTH CARE
    11         PROVIDER THAT IS NOT A HOSPITAL.
    12             (II)  $1,000,000 PER OCCURRENCE OR CLAIM AND
    13         $3,000,000 PER ANNUAL AGGREGATE FOR A NONPARTICIPATING
    14         HEALTH CARE PROVIDER.
    15             (III)  $550,000 PER OCCURRENCE OR CLAIM AND
    16         $2,700,000 PER ANNUAL AGGREGATE FOR A HOSPITAL.
    17         (6)  FOR POLICIES ISSUED OR RENEWED IN CALENDAR YEARS
    18     2010 AND THEREAFTER:
    19             (I)  THE BASIC INSURANCE COVERAGE FOR A PARTICIPATING
    20         HEALTH CARE PROVIDER THAT IS NOT A HOSPITAL SHALL
    21         INCREASE BY $50,000 PER OCCURRENCE OR CLAIM AND $150,000
    22         PER ANNUAL AGGREGATE PER YEAR UNTIL SUCH TIME AS THE
    23         BASIC INSURANCE COVERAGE REQUIRED SHALL BE $1,000,000 PER
    24         OCCURRENCE OR CLAIM AND $3,000,000 PER ANNUAL AGGREGATE.
    25             (II)  THE BASIC INSURANCE COVERAGE FOR A
    26         NONPARTICIPATING HEALTH CARE PROVIDER SHALL BE $1,000,000
    27         PER OCCURRENCE OR CLAIM AND $3,000,000 PER ANNUAL
    28         AGGREGATE.
    29             (III)  THE BASIC INSURANCE COVERAGE FOR A HOSPITAL
    30         SHALL INCREASE BY $50,000 PER OCCURRENCE OR CLAIM AND
    20070S1137B1827                 - 24 -     

     1         $200,000 PER ANNUAL AGGREGATE UNTIL SUCH TIME AS THE
     2         BASIC INSURANCE COVERAGE REQUIREMENT SHALL BE $1,000,000
     3         PER OCCURRENCE OR CLAIM AND $4,500,000 PER ANNUAL
     4         AGGREGATE PER YEAR.
     5         (7)  BASIC INSURANCE COVERAGE AMOUNTS SHALL BE EXCLUSIVE
     6     OF A DEDUCTIBLE OR ANY OTHER CONTRIBUTION FROM THE HEALTH
     7     CARE PROVIDER.
     8     * * *
     9     (G)  BASIC INSURANCE LIABILITY.--
    10         (1)  AN INSURER PROVIDING MEDICAL PROFESSIONAL LIABILITY
    11     INSURANCE SHALL NOT BE LIABLE FOR PAYMENT OF A CLAIM AGAINST
    12     A HEALTH CARE PROVIDER FOR ANY LOSS OR DAMAGES AWARDED IN A
    13     MEDICAL PROFESSIONAL LIABILITY ACTION IN EXCESS OF THE BASIC
    14     INSURANCE COVERAGE REQUIRED BY SUBSECTION (D) UNLESS THE
    15     HEALTH CARE PROVIDER'S MEDICAL PROFESSIONAL LIABILITY
    16     INSURANCE POLICY OR SELF-INSURANCE PLAN PROVIDES FOR A HIGHER
    17     LIMIT.
    18         (2)  IF A CLAIM EXCEEDS THE LIMITS OF A PARTICIPATING
    19     HEALTH CARE PROVIDER'S BASIC INSURANCE COVERAGE OR SELF-
    20     INSURANCE PLAN, THE FUND SHALL BE RESPONSIBLE FOR PAYMENT OF
    21     THE CLAIM AGAINST THE PARTICIPATING HEALTH CARE PROVIDER UP
    22     TO THE FUND LIABILITY LIMITS. THE FUND SHALL NOT BE
    23     RESPONSIBLE IF A CLAIMANT HAS WAIVED COLLECTION OF ANY
    24     PORTION OF THE APPLICABLE BASIC INSURANCE COVERAGE LIMIT.
    25         (3)  IF THE HEALTH CARE PROVIDER HAS MORE THAN ONE BASIC
    26     INSURANCE COVERAGE POLICY WITH MORE THAN ONE INSURER
    27     APPLICABLE TO A CLAIM, THE FUND SHALL BE LIABLE WHEN THE
    28     POLICY WITH THE HIGHEST LIMIT HAS BEEN TENDERED TO THE FUND.
    29     * * *
    30     SECTION 2.  SECTION 712(C), (D), (E), (I), (J) AND (M) OF THE
    20070S1137B1827                 - 25 -     

     1  ACT ARE AMENDED AND THE SECTION IS AMENDED BY ADDING A
     2  SUBSECTION TO READ:
     3  SECTION 712.  MEDICAL CARE AVAILABILITY AND REDUCTION OF ERROR
     4                 FUND.
     5     * * *
     6     (C)  FUND LIABILITY LIMITS.--
     7         (1)  FOR CALENDAR YEAR 2002, THE LIMIT OF LIABILITY OF
     8     THE FUND CREATED IN SECTION 701(D) OF THE FORMER HEALTH CARE
     9     SERVICES MALPRACTICE ACT FOR EACH HEALTH CARE PROVIDER THAT
    10     CONDUCTS MORE THAN 50% OF ITS HEALTH CARE BUSINESS OR
    11     PRACTICE WITHIN THIS COMMONWEALTH AND FOR EACH HOSPITAL SHALL
    12     BE $700,000 FOR EACH OCCURRENCE AND $2,100,000 PER ANNUAL
    13     AGGREGATE.
    14         (2)  THE LIMIT OF LIABILITY OF THE FUND FOR EACH
    15     PARTICIPATING HEALTH CARE PROVIDER SHALL BE [AS FOLLOWS:
    16             (I)  FOR] FOR CALENDAR YEAR 2003 AND EACH YEAR
    17         THEREAFTER, THE LIMIT OF LIABILITY OF THE FUND SHALL BE
    18         $500,000 FOR EACH OCCURRENCE AND $1,500,000 PER ANNUAL
    19         AGGREGATE.
    20             [(II)  IF THE BASIC INSURANCE COVERAGE REQUIREMENT IS
    21         INCREASED IN ACCORDANCE WITH SECTION 711(D)(3) AND,
    22         NOTWITHSTANDING SUBPARAGRAPH (I), FOR EACH CALENDAR YEAR
    23         FOLLOWING THE INCREASE IN THE BASIC INSURANCE COVERAGE
    24         REQUIREMENT, THE LIMIT OF LIABILITY OF THE FUND SHALL BE
    25         $250,000 FOR EACH OCCURRENCE AND $750,000 PER ANNUAL
    26         AGGREGATE.
    27             (III)  IF THE BASIC INSURANCE COVERAGE REQUIREMENT IS
    28         INCREASED IN ACCORDANCE WITH SECTION 711(D)(4) AND,
    29         NOTWITHSTANDING SUBPARAGRAPHS (I) AND (II), FOR EACH
    30         CALENDAR YEAR FOLLOWING THE INCREASE IN THE BASIC
    20070S1137B1827                 - 26 -     

     1         INSURANCE COVERAGE REQUIREMENT, THE LIMIT OF LIABILITY OF
     2         THE FUND SHALL BE ZERO.]
     3         (3)  THE LIMIT OF LIABILITY OF THE FUND FOR EACH
     4     PARTICIPATING HEALTH CARE PROVIDER SHALL BE:
     5             (I)  FOR CALENDAR YEARS 2003 THROUGH 2008, $500,000
     6         FOR EACH OCCURRENCE AND $1,500,000 PER ANNUAL AGGREGATE.
     7             (II)  FOR CALENDAR YEAR 2009, $450,000 PER OCCURRENCE
     8         OR CLAIM AND $1,350,000 PER ANNUAL AGGREGATE.
     9             (III)  FOR CALENDAR YEARS 2010 AND THEREAFTER, THE
    10         LIMIT OF LIABILITY SHALL DECREASE BY $50,000 PER
    11         OCCURRENCE OR CLAIM AND $150,000 PER ANNUAL AGGREGATE PER
    12         YEAR UNTIL SUCH TIME AS THE FUND LIMIT OF LIABILITY SHALL
    13         BE ZERO DOLLARS PER OCCURRENCE OR CLAIM AND ZERO DOLLARS
    14         PER ANNUAL AGGREGATE.
    15     (D)  ASSESSMENTS.--
    16         (1)  FOR CALENDAR [YEAR 2003 AND FOR EACH YEAR
    17     THEREAFTER,] YEARS 2003 THROUGH 2017, THE FUND SHALL BE
    18     FUNDED BY AN ASSESSMENT ON EACH PARTICIPATING HEALTH CARE
    19     PROVIDER. ASSESSMENTS SHALL BE LEVIED BY THE DEPARTMENT ON OR
    20     AFTER JANUARY 1 OF EACH YEAR. THE ASSESSMENT SHALL BE BASED
    21     ON THE PREVAILING PRIMARY PREMIUM FOR EACH PARTICIPATING
    22     HEALTH CARE PROVIDER AND SHALL, IN THE AGGREGATE, PRODUCE AN
    23     AMOUNT SUFFICIENT TO DO ALL OF THE FOLLOWING:
    24             (I)  REIMBURSE THE FUND FOR THE PAYMENT OF REPORTED
    25         CLAIMS WHICH BECAME FINAL DURING THE PRECEDING CLAIMS
    26         PERIOD.
    27             (II)  PAY EXPENSES OF THE FUND INCURRED DURING THE
    28         PRECEDING CLAIMS PERIOD.
    29             (III)  PAY PRINCIPAL AND INTEREST ON MONEYS
    30         TRANSFERRED INTO THE FUND IN ACCORDANCE WITH SECTION
    20070S1137B1827                 - 27 -     

     1         713(C).
     2             (IV)  PROVIDE A RESERVE THAT SHALL BE 10% OF THE SUM
     3         OF SUBPARAGRAPHS (I), (II) AND (III).
     4         (2)  THE DEPARTMENT SHALL NOTIFY ALL BASIC INSURANCE
     5     COVERAGE INSURERS AND SELF-INSURED PARTICIPATING HEALTH CARE
     6     PROVIDERS OF THE ASSESSMENT BY NOVEMBER 1 FOR THE SUCCEEDING
     7     CALENDAR YEAR.
     8         (3)  ANY APPEAL OF THE ASSESSMENT SHALL BE FILED WITH THE
     9     DEPARTMENT.
    10     [(E)  DISCOUNT ON SURCHARGES AND ASSESSMENTS.--
    11         (1)  FOR CALENDAR YEAR 2002, THE DEPARTMENT SHALL
    12     DISCOUNT THE AGGREGATE SURCHARGE IMPOSED UNDER SECTION
    13     701(E)(1) OF THE HEALTH CARE SERVICES MALPRACTICE ACT BY 5%
    14     OF THE AGGREGATE SURCHARGE IMPOSED UNDER THAT SECTION FOR
    15     CALENDAR YEAR 2001 IN ACCORDANCE WITH THE FOLLOWING:
    16             (I)  FIFTY PERCENT OF THE AGGREGATE DISCOUNT SHALL BE
    17         GRANTED EQUALLY TO HOSPITALS AND TO PARTICIPATING HEALTH
    18         CARE PROVIDERS THAT WERE SURCHARGED AS MEMBERS OF ONE OF
    19         THE FOUR HIGHEST RATE CLASSES OF THE PREVAILING PRIMARY
    20         PREMIUM.
    21             (II)  NOTWITHSTANDING SUBPARAGRAPH (I), 50% OF THE
    22         AGGREGATE DISCOUNT SHALL BE GRANTED EQUALLY TO ALL
    23         PARTICIPATING HEALTH CARE PROVIDERS.
    24             (III)  THE DEPARTMENT SHALL ISSUE A CREDIT TO A
    25         PARTICIPATING HEALTH CARE PROVIDER WHO, PRIOR TO THE
    26         EFFECTIVE DATE OF THIS SECTION, HAS PAID THE SURCHARGE
    27         IMPOSED UNDER SECTION 701(E)(1) OF THE FORMER HEALTH CARE
    28         SERVICES MALPRACTICE ACT FOR CALENDAR YEAR 2002 PRIOR TO
    29         THE EFFECTIVE DATE OF THIS SECTION.
    30         (2)  FOR CALENDAR YEARS 2003 AND 2004, THE DEPARTMENT
    20070S1137B1827                 - 28 -     

     1     SHALL DISCOUNT THE AGGREGATE ASSESSMENT IMPOSED UNDER
     2     SUBSECTION (D) FOR EACH CALENDAR YEAR BY 10% OF THE AGGREGATE
     3     SURCHARGE IMPOSED UNDER SECTION 701(E)(1) OF THE FORMER
     4     HEALTH CARE SERVICES MALPRACTICE ACT FOR CALENDAR YEAR 2001
     5     IN ACCORDANCE WITH THE FOLLOWING:
     6             (I)  FIFTY PERCENT OF THE AGGREGATE DISCOUNT SHALL BE
     7         GRANTED EQUALLY TO HOSPITALS AND TO PARTICIPATING HEALTH
     8         CARE PROVIDERS THAT WERE ASSESSED AS MEMBERS OF ONE OF
     9         THE FOUR HIGHEST RATE CLASSES OF THE PREVAILING PRIMARY
    10         PREMIUM.
    11             (II)  NOTWITHSTANDING SUBPARAGRAPH (I), 50% OF THE
    12         AGGREGATE DISCOUNT SHALL BE GRANTED EQUALLY TO ALL
    13         PARTICIPATING HEALTH CARE PROVIDERS.
    14         (3)  FOR CALENDAR YEARS 2005 AND THEREAFTER, IF THE BASIC
    15     INSURANCE COVERAGE REQUIREMENT IS INCREASED IN ACCORDANCE
    16     WITH SECTION 711(D)(3) OR (4), THE DEPARTMENT MAY DISCOUNT
    17     THE AGGREGATE ASSESSMENT IMPOSED UNDER SUBSECTION (D) BY AN
    18     AMOUNT NOT TO EXCEED THE AGGREGATE SUM TO BE DEPOSITED IN THE
    19     FUND IN ACCORDANCE WITH SUBSECTION (M).]
    20     * * *
    21     (I)  CHANGE IN BASIC INSURANCE COVERAGE.--IF A PARTICIPATING
    22  HEALTH CARE PROVIDER CHANGES THE TERM OF ITS MEDICAL
    23  PROFESSIONAL LIABILITY INSURANCE COVERAGE, THE ASSESSMENT SHALL
    24  BE CALCULATED ON AN ANNUAL BASIS AND SHALL REFLECT THE
    25  ASSESSMENT PERCENTAGES IN EFFECT FOR THE PERIOD OVER WHICH THE
    26  POLICIES ARE IN EFFECT. A POLICY PERIOD LESS THAN 12 MONTHS MAY
    27  RESULT IN A PRORATED REDUCTION IN THE MCARE ANNUAL AGGREGATE
    28  LIMIT.
    29     (J)  PAYMENT OF CLAIMS.--CLAIMS WHICH BECAME FINAL DURING THE
    30  PRECEDING CLAIMS PERIOD SHALL BE PAID ON [OR BEFORE] DECEMBER 31
    20070S1137B1827                 - 29 -     

     1  OR THE LAST BUSINESS DAY OF THE YEAR FOLLOWING THE AUGUST 31 ON
     2  WHICH THEY BECAME FINAL.
     3     * * *
     4     (M)  SUPPLEMENTAL FUNDING.--NOTWITHSTANDING THE PROVISIONS OF
     5  75 PA.C.S. § 6506(B) (RELATING TO SURCHARGE) TO THE CONTRARY,
     6  BEGINNING JANUARY 1, 2004, [AND FOR A PERIOD OF NINE CALENDAR
     7  YEARS THEREAFTER,] THROUGH JUNE 30, 2018, ALL SURCHARGES LEVIED
     8  AND COLLECTED UNDER 75 PA.C.S. § 6506(A) BY ANY DIVISION OF THE
     9  UNIFIED JUDICIAL SYSTEM SHALL BE REMITTED TO THE COMMONWEALTH
    10  FOR DEPOSIT IN THE MEDICAL CARE AVAILABILITY AND [RESTRICTION]
    11  REDUCTION OF ERROR FUND. THESE FUNDS SHALL BE USED TO REDUCE
    12  SURCHARGES AND ASSESSMENTS IN ACCORDANCE WITH SUBSECTION (E).
    13  BEGINNING [JANUARY 1, 2014] JULY 1, 2018, AND EACH YEAR
    14  THEREAFTER, THE SURCHARGES LEVIED AND COLLECTED UNDER 75 PA.C.S.
    15  § 6506(A) SHALL BE DEPOSITED INTO THE [GENERAL FUND.] HEALTH
    16  CARE PROVIDER RETENTION ACCOUNT.
    17     * * *
    18     (O)  COVERAGE OF CLAIMS IN RELATION TO PAYMENT OF CERTAIN
    19  LATE ASSESSMENTS.--
    20         (1)  ALL BASIC INSURANCE COVERAGE INSURERS, SELF-INSURED
    21     PARTICIPATING HEALTH CARE PROVIDERS AND RISK RETENTION GROUPS
    22     SHALL BILL, COLLECT AND REMIT THE ASSESSMENT TO THE
    23     DEPARTMENT WITHIN 60 DAYS OF THE INCEPTION OR RENEWAL DATE OF
    24     THE PRIMARY PROFESSIONAL LIABILITY POLICY.
    25         (2)  ALL BASIC INSURANCE COVERAGE INSURERS, SELF-INSURED
    26     PARTICIPATING HEALTH CARE PROVIDERS AND RISK RETENTION GROUPS
    27     SHALL BE SUBJECT TO THE FOLLOWING:
    28             (I)  FOR ASSESSMENTS REMITTED TO THE DEPARTMENT IN
    29         EXCESS OF 60 DAYS AFTER THE INCEPTION OR RENEWAL DATE OF
    30         THE PRIMARY POLICY, THE BASIC INSURANCE COVERAGE INSURER,
    20070S1137B1827                 - 30 -     

     1         SELF-INSURED PARTICIPATING HEALTH CARE PROVIDER OR RISK
     2         RETENTION GROUP SHALL PAY TO THE DEPARTMENT A PENALTY
     3         EQUAL TO 10% PER ANNUM OF EACH UNTIMELY ASSESSMENT
     4         ACCRUING FROM THE 61ST DAY AFTER THE INCEPTION OR RENEWAL
     5         DATE OF THE PRIMARY POLICY UNTIL THE REMITTANCE IS
     6         RECEIVED BY THE DEPARTMENT.
     7             (II)  IN ADDITION TO THE PROVISIONS OF SUBPARAGRAPH
     8         (I), IF THE DEPARTMENT FINDS THAT THERE HAS BEEN A
     9         PATTERN OR PRACTICE OF NOT COMPLYING WITH THIS SECTION,
    10         THE BASIC INSURANCE COVERAGE INSURER, SELF-INSURED
    11         PARTICIPATING HEALTH CARE PROVIDER OR RISK RETENTION
    12         GROUP SHALL BE SUBJECT TO THE PENALTIES AND PROCESS SET
    13         FORTH IN THE ACT OF JULY 22, 1974 (P.L.589, NO.205),
    14         KNOWN AS THE UNFAIR INSURANCE PRACTICES ACT.
    15             (III)  IF THE BASIC INSURANCE COVERAGE INSURER, SELF-
    16         INSURER OR RISK RETENTION GROUP RECEIVES THE ASSESSMENT
    17         FROM A HEALTH CARE PROVIDER, PROFESSIONAL CORPORATION OR
    18         PROFESSIONAL ASSOCIATION WITH LESS THAN 30 DAYS TO MAKE
    19         THE REMITTANCE TIMELY AS PROVIDED UNDER THIS SUBSECTION,
    20         THE BASIC INSURANCE COVERAGE INSURER, SELF-INSURER OR
    21         RISK RETENTION GROUP REMITTANCE PERIOD SHALL BE EXTENDED
    22         BY 30 DAYS FROM THE DATE OF RECEIPT UPON PROVIDING
    23         REASONABLE EVIDENCE TO THE DEPARTMENT REGARDING THE DATE
    24         OF RECEIPT AND SHALL NOT BE SUBJECT TO THE PENALTIES
    25         PROVIDED FOR UNDER THIS SECTION.
    26             (IV)  IF THE BASIC INSURANCE COVERAGE INSURER, SELF-
    27         INSURER OR RISK RETENTION GROUP RECEIVES AN ASSESSMENT
    28         AFTER 60 DAYS OF THE INCEPTION OR RENEWAL DATE OF THE
    29         PRIMARY PROFESSIONAL LIABILITY POLICY AND REMITS THE
    30         ASSESSMENT WITHIN 30 DAYS FROM THE DATE OF RECEIPT, THE
    20070S1137B1827                 - 31 -     

     1         BASIC INSURANCE COVERAGE INSURER, SELF-INSURER OR RISK
     2         RETENTION GROUP SHALL NOT BE SUBJECT TO THE PENALTIES
     3         PROVIDED FOR UNDER THIS SECTION. REMITTANCES TO THE
     4         DEPARTMENT BEYOND THE 30-DAY PERIOD SHALL BE SUBJECT TO
     5         THE PENALTIES PROVIDED FOR UNDER THIS SECTION.
     6             (V)  (A)  A HEALTH CARE PROVIDER OR PROFESSIONAL
     7             CORPORATION, PROFESSIONAL ASSOCIATION OR PARTNERSHIP
     8             SHALL BE PROVIDED COVERAGE FROM THE INCEPTION OR
     9             RENEWAL DATE OF THE PRIMARY PROFESSIONAL LIABILITY
    10             POLICY IF THE BILLED ASSESSMENT IS PAID TO THE BASIC
    11             INSURANCE COVERAGE INSURER, SELF-INSURER OR RISK
    12             RETENTION GROUP WITHIN 60 DAYS OF THE INCEPTION OR
    13             RENEWAL DATE OF THE PRIMARY PROFESSIONAL LIABILITY
    14             POLICY.
    15                 (B)  A HEALTH CARE PROVIDER OR PROFESSIONAL
    16             CORPORATION, PROFESSIONAL ASSOCIATION OR PARTNERSHIP
    17             THAT FAILS TO PAY THE BILLED ASSESSMENT TO ITS BASIC
    18             INSURANCE COVERAGE INSURER, SELF-INSURER OR RISK
    19             RETENTION GROUP WITHIN 60 DAYS OF POLICY INCEPTION OR
    20             RENEWAL AND BEFORE RECEIVING NOTICE OF A CLAIM SHALL
    21             NOT HAVE COVERAGE FOR THAT CLAIM.
    22                 (C)  IF A HEALTH CARE PROVIDER OR PROFESSIONAL
    23             CORPORATION, PROFESSIONAL ASSOCIATION OR PARTNERSHIP
    24             IS BILLED BY THE BASIC INSURANCE COVERAGE INSURER,
    25             SELF-INSURER OR RISK RETENTION GROUP LATER THAN 30
    26             DAYS AFTER THE POLICY INCEPTION OR RENEWAL DATE AND
    27             THE HEALTH CARE PROVIDER OR PROFESSIONAL CORPORATION,
    28             PROFESSIONAL ASSOCIATION OR PARTNERSHIP PAYS THE
    29             BASIC INSURANCE COVERAGE INSURER, SELF-INSURER OR
    30             RISK RETENTION GROUP WITHIN 30 DAYS FROM THE DATE OF
    20070S1137B1827                 - 32 -     

     1             RECEIPT OF THE BILL AND THE BASIC INSURANCE COVERAGE
     2             INSURER, SELF-INSURER OR RISK RETENTION GROUP CARRIER
     3             REMITS THE ASSESSMENT TO THE DEPARTMENT WITHIN 30
     4             DAYS FROM THE DATE OF RECEIPT, THE HEALTH CARE
     5             PROVIDER SHALL BE PROVIDED COVERAGE AS OF THE
     6             INCEPTION OR RENEWAL DATE OF THE PRIMARY POLICY.
     7             COVERAGE SHALL ALSO BE PROVIDED TO THE HEALTH CARE
     8             PROVIDER OR PROFESSIONAL CORPORATION, PROFESSIONAL
     9             ASSOCIATION OR PARTNERSHIP FOR ALL PROFESSIONAL
    10             LIABILITY CLAIMS MADE AFTER PAYMENT OF THE
    11             ASSESSMENT.
    12             (VI)  EXCEPT AS TO PROVISIONS IN CONFLICT WITH THIS
    13         SECTION, NOTHING IN THIS SECTION SHALL BE CONSTRUED TO
    14         AFFECT EXISTING REGULATIONS SAVED BY SECTION 5107(A), AND
    15         ALL EXISTING REGULATIONS SHALL REMAIN IN FULL FORCE AND
    16         EFFECT.
    17     SECTION 3.  SECTION 745 OF THE ACT IS REPEALED:
    18  [SECTION 745.  ACTUARIAL DATA.
    19     (A)  INITIAL STUDY.--THE FOLLOWING SHALL APPLY:
    20         (1)  NO LATER THAN APRIL 1, 2005, EACH INSURER PROVIDING
    21     MEDICAL PROFESSIONAL LIABILITY INSURANCE IN THIS COMMONWEALTH
    22     SHALL FILE LOSS DATA AS REQUIRED BY THE COMMISSIONER. FOR
    23     FAILURE TO COMPLY, THE COMMISSIONER SHALL IMPOSE AN
    24     ADMINISTRATIVE PENALTY OF $1,000 FOR EVERY DAY THAT THIS DATA
    25     IS NOT PROVIDED IN ACCORDANCE WITH THIS PARAGRAPH.
    26         (2)  BY JULY 1, 2005, THE COMMISSIONER SHALL CONDUCT A
    27     STUDY REGARDING THE AVAILABILITY OF ADDITIONAL BASIC
    28     INSURANCE COVERAGE CAPACITY. THE STUDY SHALL INCLUDE AN
    29     ESTIMATE OF THE TOTAL CHANGE IN MEDICAL PROFESSIONAL
    30     LIABILITY INSURANCE LOSS-COST RESULTING FROM IMPLEMENTATION
    20070S1137B1827                 - 33 -     

     1     OF THIS ACT PREPARED BY AN INDEPENDENT ACTUARY. THE FEE FOR
     2     THE INDEPENDENT ACTUARY SHALL BE BORNE BY THE FUND. IN
     3     DEVELOPING THE ESTIMATE, THE INDEPENDENT ACTUARY SHALL
     4     CONSIDER ALL OF THE FOLLOWING:
     5             (I)  THE MOST RECENT ACCIDENT YEAR AND RATEMAKING
     6         DATA AVAILABLE.
     7             (II)  ANY OTHER RELEVANT FACTORS WITHIN OR OUTSIDE
     8         THIS COMMONWEALTH IN ACCORDANCE WITH SOUND ACTUARIAL
     9         PRINCIPLES.
    10     (B)  ADDITIONAL STUDY.--THE FOLLOWING SHALL APPLY:
    11         (1)  THREE YEARS FOLLOWING THE INCREASE OF THE BASIC
    12     INSURANCE COVERAGE REQUIREMENT IN ACCORDANCE WITH SECTION
    13     711(D)(3), EACH INSURER PROVIDING MEDICAL PROFESSIONAL
    14     LIABILITY INSURANCE IN THIS COMMONWEALTH SHALL FILE LOSS DATA
    15     WITH THE COMMISSIONER UPON REQUEST. FOR FAILURE TO COMPLY,
    16     THE COMMISSIONER SHALL IMPOSE AN ADMINISTRATIVE PENALTY OF
    17     $1,000 FOR EVERY DAY THAT THIS DATA IS NOT PROVIDED IN
    18     ACCORDANCE WITH THIS PARAGRAPH.
    19         (2)  THREE MONTHS FOLLOWING THE REQUEST MADE UNDER
    20     PARAGRAPH (1), THE COMMISSIONER SHALL CONDUCT A STUDY
    21     REGARDING THE AVAILABILITY OF ADDITIONAL BASIC INSURANCE
    22     COVERAGE CAPACITY. THE STUDY SHALL INCLUDE AN ESTIMATE OF THE
    23     TOTAL CHANGE IN MEDICAL PROFESSIONAL LIABILITY INSURANCE
    24     LOSS-COST RESULTING FROM IMPLEMENTATION OF THIS ACT PREPARED
    25     BY AN INDEPENDENT ACTUARY. THE FEE FOR THE INDEPENDENT
    26     ACTUARY SHALL BE BORNE BY THE FUND. IN DEVELOPING THE
    27     ESTIMATE, THE INDEPENDENT ACTUARY SHALL CONSIDER ALL OF THE
    28     FOLLOWING:
    29             (I)  THE MOST RECENT ACCIDENT YEAR AND RATEMAKING
    30         DATA AVAILABLE.
    20070S1137B1827                 - 34 -     

     1             (II)  ANY OTHER RELEVANT FACTORS WITHIN OR OUTSIDE
     2         THIS COMMONWEALTH IN ACCORDANCE WITH SOUND ACTUARIAL
     3         PRINCIPLES.]
     4     SECTION 4.  CHAPTER 7 OF THE ACT IS AMENDED BY ADDING
     5  SUBCHAPTERS TO READ:
     6                            SUBCHAPTER E
     7                 PENNSYLVANIA ACCESS TO BASIC CARE
     8                       (PA ABC) PROGRAM FUND
     9  SECTION 751.  ESTABLISHMENT.
    10     THERE IS ESTABLISHED WITHIN THE STATE TREASURY A SPECIAL FUND
    11  TO BE KNOWN AS THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
    12  PROGRAM FUND.
    13  SECTION 752.  ALLOCATION.
    14     MONEY IN THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
    15  PROGRAM FUND IS HEREBY APPROPRIATED UPON APPROVAL OF THE
    16  GOVERNOR FOR HEALTH CARE COVERAGE AND SERVICES UNDER CHAPTER 13.
    17                            SUBCHAPTER F
    18                 CONTINUING ACCESS WITH RELIEF FOR
    19                       EMPLOYERS (CARE) FUND
    20  SECTION 761.  ESTABLISHMENT.
    21     THERE IS ESTABLISHED WITHIN THE STATE TREASURY A SPECIAL FUND
    22  TO BE KNOWN AS THE CONTINUING ACCESS WITH RELIEF FOR EMPLOYERS
    23  (CARE) FUND.
    24  SECTION 762.  ALLOCATION.
    25     MONEY IN THE CONTINUING ACCESS WITH RELIEF FOR EMPLOYERS
    26  (CARE) FUND IS HEREBY APPROPRIATED ON A CONTINUING BASIS TO THE
    27  DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT AND SHALL BE
    28  DEDICATED TO ASSISTING CERTAIN EMPLOYERS THAT CURRENTLY OFFER
    29  AND MAINTAIN HEALTH CARE COVERAGE FOR THEIR EMPLOYEES IN
    30  COMPLIANCE WITH THE REQUIREMENTS UNDER SECTION 1308.
    20070S1137B1827                 - 35 -     

     1     SECTION 5.  THE DEFINITION OF "HEALTH CARE PROVIDER" IN
     2  SECTION 1101 OF THE ACT, ADDED DECEMBER 22, 2005 (P.L.458,
     3  NO.88), IS AMENDED TO READ:
     4  SECTION 1101.  DEFINITIONS.
     5     THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER
     6  SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
     7  CONTEXT CLEARLY INDICATES OTHERWISE:
     8     * * *
     9     "HEALTH CARE PROVIDER."  [AN INDIVIDUAL WHO IS ALL OF THE
    10  FOLLOWING:
    11         (1)  A PHYSICIAN, LICENSED PODIATRIST, CERTIFIED NURSE
    12     MIDWIFE OR NURSING HOME.
    13         (2)  A PARTICIPATING HEALTH CARE PROVIDER AS DEFINED IN
    14     SECTION 702.] ANY OF THE FOLLOWING:
    15         (1)  A NURSING HOME OR BIRTH CENTER THAT IS A
    16     PARTICIPATING HEALTH CARE PROVIDER AS DEFINED IN SECTION 702.
    17         (2)  AN INDIVIDUAL WHO IS A PHYSICIAN, LICENSED
    18     PODIATRIST OR CERTIFIED NURSE MIDWIFE.
    19     * * *
    20     SECTION 6.  SECTION 1102 OF THE ACT, AMENDED OCTOBER 27, 2006
    21  (P.L.1198, NO.128), IS AMENDED TO READ:
    22  SECTION 1102.  ABATEMENT PROGRAM.
    23     (A)  ESTABLISHMENT.--THERE IS HEREBY ESTABLISHED WITHIN THE
    24  INSURANCE DEPARTMENT A PROGRAM TO BE KNOWN AS THE HEALTH CARE
    25  PROVIDER RETENTION PROGRAM. THE INSURANCE DEPARTMENT, IN
    26  CONJUNCTION WITH THE DEPARTMENT OF PUBLIC WELFARE, SHALL
    27  ADMINISTER THE PROGRAM. THE PROGRAM SHALL PROVIDE ASSISTANCE IN
    28  THE FORM OF ASSESSMENT ABATEMENTS TO HEALTH CARE PROVIDERS FOR
    29  CALENDAR YEARS [2003, 2004, 2005, 2006 AND 2007] BEGINNING 2003
    30  AND ENDING 2017, EXCEPT THAT LICENSED PODIATRISTS SHALL NOT BE
    20070S1137B1827                 - 36 -     

     1  ELIGIBLE FOR CALENDAR YEARS 2003 AND 2004, AND NURSING HOMES
     2  SHALL NOT BE ELIGIBLE FOR CALENDAR YEARS 2003, 2004 AND 2005.
     3     (B)  OTHER [ABATEMENT.--] ABATEMENTS.--
     4         (1)  EMERGENCY PHYSICIANS NOT EMPLOYED FULL TIME BY A
     5     TRAUMA CENTER OR WORKING UNDER AN EXCLUSIVE CONTRACT WITH A
     6     TRAUMA CENTER SHALL RETAIN ELIGIBILITY FOR AN ABATEMENT
     7     PURSUANT TO SECTION 1104(B)(2) FOR CALENDAR YEARS 2003, 2004,
     8     2005 AND 2006. COMMENCING IN CALENDAR YEAR 2007, THESE
     9     EMERGENCY PHYSICIANS SHALL BE ELIGIBLE FOR AN ABATEMENT
    10     PURSUANT TO SECTION 1104(B)(1).
    11         (2)  BIRTH CENTERS SHALL RETAIN ELIGIBILITY FOR ABATEMENT
    12     PURSUANT TO SECTION 1104(B)(2) FOR CALENDAR YEARS 2003, 2004,
    13     2005, 2006 AND 2007. COMMENCING IN CALENDAR YEAR 2008, BIRTH
    14     CENTERS SHALL BE ELIGIBLE FOR ABATEMENT PURSUANT TO SECTION
    15     1104(B)(1).
    16     SECTION 7.  SECTION 1103 OF THE ACT, ADDED DECEMBER 22, 2005
    17  (P.L.458, NO.88), IS AMENDED BY ADDING PARAGRAPHS TO READ:
    18  SECTION 1103.  ELIGIBILITY.
    19     A HEALTH CARE PROVIDER SHALL NOT BE ELIGIBLE FOR [ASSESSMENT]
    20  ABATEMENT UNDER THE PROGRAM IF ANY OF THE FOLLOWING APPLY:
    21         * * *
    22         (6)  THE HEALTH CARE PROVIDER HAS REFUSED TO BE AN ACTIVE
    23     PROVIDER IN THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
    24     PROGRAM IN THE HEALTH CARE PROVIDER'S SERVICE AREA.
    25         (7)  THE ACTIVE HEALTH CARE PROVIDER IS AN ACTIVE
    26     PROVIDER IN THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
    27     PROGRAM AND PLACES RESTRICTIONS ON BENEFITS FOR PATIENTS
    28     ENROLLED IN THAT PROGRAM.
    29         (8)  THE HEALTH CARE PROVIDER HAS REFUSED TO BE AN ACTIVE
    30     PROVIDER IN THE CHILDREN'S HEALTH INSURANCE PROGRAM
    20070S1137B1827                 - 37 -     

     1     ESTABLISHED UNDER ARTICLE XXIII OF THE ACT OF MAY 17, 1921
     2     (P.L.682, NO.284), KNOWN AS THE INSURANCE COMPANY LAW OF
     3     1921.
     4         (9)  THE ACTIVE HEALTH CARE PROVIDER IS AN ACTIVE
     5     PROVIDER IN THE CHILDREN'S HEALTH INSURANCE PROGRAM AND
     6     PLACES RESTRICTIONS ON BENEFITS FOR PATIENTS ENROLLED IN THE
     7     CHILDREN'S HEALTH INSURANCE PROGRAM.
     8         (10)  THE DEPARTMENT OF REVENUE HAS DETERMINED THAT THE
     9     HEALTH CARE PROVIDER HAS NOT FILED ALL REQUIRED STATE TAX
    10     REPORTS AND RETURNS FOR ALL APPLICABLE TAXABLE YEARS OR HAS
    11     NOT PAID ANY BALANCE OF STATE TAX DUE AS DETERMINED AT
    12     SETTLEMENT, ASSESSMENT OR DETERMINATION BY THE DEPARTMENT OF
    13     REVENUE THAT ARE NOT SUBJECT TO A TIMELY PERFECTED
    14     ADMINISTRATIVE OR JUDICIAL APPEAL OR SUBJECT TO A DULY
    15     AUTHORIZED DEFERRED PAYMENT PLAN AS OF THE DATE OF
    16     APPLICATION. NOTWITHSTANDING THE PROVISIONS OF SECTION 353(F)
    17     OF THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX
    18     REFORM CODE OF 1971, THE DEPARTMENT OF REVENUE SHALL SUPPLY
    19     THE INSURANCE DEPARTMENT WITH INFORMATION CONCERNING THE
    20     STATUS OF DELINQUENT TAXES OWED BY A HEALTH CARE PROVIDER FOR
    21     PURPOSES OF THIS PARAGRAPH.
    22         (11)  (I)  THE HEALTH CARE PROVIDER HAS NOT ATTENDED AT
    23         LEAST ONE COMMONWEALTH-SPONSORED INDEPENDENT DRUG
    24         INFORMATION SERVICE SESSION, EITHER IN PERSON OR BY
    25         VIDEOCONFERENCE.
    26             (II)  THIS PARAGRAPH DOES NOT APPLY IF THE
    27         COMMONWEALTH HAS NOT MADE A COMMONWEALTH-SPONSORED
    28         INDEPENDENT DRUG INFORMATION SERVICE SESSION AVAILABLE TO
    29         THE HEALTH CARE PROVIDER PRIOR TO THE DATE THAT THE
    30         HEALTH CARE PROVIDER'S APPLICATION IS SUBMITTED UNDER
    20070S1137B1827                 - 38 -     

     1         SECTION 1104.
     2     SECTION 8.  SECTION 1104(B) OF THE ACT, AMENDED DECEMBER 22,
     3  2005 (P.L.458, NO.88), IS AMENDED TO READ:
     4  SECTION 1104.  PROCEDURE.
     5     * * *
     6     (B)  REVIEW.--UPON RECEIPT OF A COMPLETED APPLICATION, THE
     7  INSURANCE DEPARTMENT SHALL REVIEW THE APPLICANT'S INFORMATION
     8  AND GRANT THE APPLICABLE ABATEMENT OF THE ASSESSMENT FOR THE
     9  PREVIOUS CALENDAR YEAR SPECIFIED ON THE APPLICATION IN
    10  ACCORDANCE WITH ALL OF THE FOLLOWING:
    11         (1)  THE INSURANCE DEPARTMENT SHALL NOTIFY THE DEPARTMENT
    12     OF PUBLIC WELFARE THAT THE APPLICANT HAS SELF-CERTIFIED AS
    13     ELIGIBLE AND WAS NOT DISQUALIFIED FOR AN ABATEMENT UNDER
    14     SECTION 1103(6), (7), (8), (9), (10) AND (11) FOR A 100%
    15     ABATEMENT OF THE IMPOSED ASSESSMENT IF THE HEALTH CARE
    16     PROVIDER WAS ASSESSED UNDER SECTION 712(D) AS:
    17             (I)  A PHYSICIAN WHO IS ASSESSED AS A MEMBER OF ONE
    18         OF THE FOUR HIGHEST RATE CLASSES OF THE PREVAILING
    19         PRIMARY PREMIUM;
    20             (II)  AN EMERGENCY PHYSICIAN;
    21             (III)  A PHYSICIAN WHO ROUTINELY PROVIDES OBSTETRICAL
    22         SERVICES IN RURAL AREAS AS DESIGNATED BY THE INSURANCE
    23         DEPARTMENT; [OR]
    24             (IV)  A CERTIFIED NURSE MIDWIFE[.]; OR
    25             (V)  A BIRTH CENTER.
    26         (2)  THE INSURANCE DEPARTMENT SHALL NOTIFY THE DEPARTMENT
    27     OF PUBLIC WELFARE THAT THE APPLICANT HAS SELF-CERTIFIED AS
    28     ELIGIBLE AND WAS NOT DISQUALIFIED FOR AN ABATEMENT UNDER
    29     SECTION 1103(6), (7), (8), (9), (10) AND (11) FOR A 50%
    30     ABATEMENT OF THE IMPOSED ASSESSMENT IN CALENDAR YEARS 2008
    20070S1137B1827                 - 39 -     

     1     THROUGH 2012, A 56.5% ABATEMENT IN CALENDAR YEAR 2013, A
     2     63.5% ABATEMENT IN CALENDAR YEAR 2014, A 70% ABATEMENT IN
     3     CALENDAR YEAR 2015, A 78% ABATEMENT IN CALENDAR YEAR 2016, AN
     4     88% ABATEMENT IN CALENDAR YEAR 2017 AND A 100% ABATEMENT IN
     5     CALENDAR YEAR 2018 IF THE HEALTH CARE PROVIDER WAS ASSESSED
     6     UNDER SECTION 712(D) AS:
     7             (I)  A PHYSICIAN BUT IS A PHYSICIAN WHO DOES NOT
     8         QUALIFY FOR ABATEMENT UNDER PARAGRAPH (1);
     9             (II)  A LICENSED PODIATRIST; [OR]
    10             (III)  A NURSING HOME[.]; OR
    11             (IV)  A BIRTH CENTER.
    12     * * *
    13     SECTION 9.  SECTION 1112(C) AND (E) OF THE ACT, ADDED
    14  DECEMBER 22, 2005 (P.L.458, NO.88), ARE AMENDED AND THE SECTION
    15  IS AMENDED BY ADDING SUBSECTIONS TO READ:
    16  SECTION 1112.  HEALTH CARE PROVIDER RETENTION ACCOUNT.
    17     * * *
    18     (A.1)  SUPPLEMENTAL ASSISTANCE AND FUNDING ACCOUNT.--THERE IS
    19  ESTABLISHED WITHIN THE HEALTH CARE PROVIDER RETENTION ACCOUNT A
    20  SPECIAL ACCOUNT TO BE KNOWN AS THE SUPPLEMENTAL ASSISTANCE AND
    21  FUNDING ACCOUNT. FUNDS IN THIS ACCOUNT SHALL BE USED ANNUALLY TO
    22  SUPPLEMENT THE FUNDING OF THE PENNSYLVANIA ACCESS TO BASIC CARE
    23  (PA ABC) PROGRAM.
    24     * * *
    25     (C)  TRANSFERS FROM ACCOUNT.--
    26         (1)  THE SECRETARY OF THE BUDGET MAY ANNUALLY TRANSFER
    27     FROM THE ACCOUNT TO THE MEDICAL CARE AVAILABILITY AND
    28     REDUCTION OF ERROR (MCARE) FUND AN AMOUNT UP TO THE AGGREGATE
    29     AMOUNT OF ABATEMENTS GRANTED BY THE INSURANCE DEPARTMENT
    30     UNDER SECTION 1104(B).
    20070S1137B1827                 - 40 -     

     1         (2)  IN ADDITION TO THE TRANSFERS SPECIFIED IN PARAGRAPH
     2     (1), THE SECRETARY OF THE BUDGET MAY ALSO TRANSFER FUNDS FROM
     3     THE ACCOUNT TO THE MEDICAL CARE AVAILABILITY AND REDUCTION OF
     4     ERROR (MCARE) FUND FOR THE PURPOSE OF PAYING CLAIMS AND
     5     OPERATING EXPENSES COMING DUE AFTER JANUARY 1, 2018.
     6         (3)  THE SECRETARY OF THE BUDGET MAY TRANSFER FUNDS FROM
     7     THE ACCOUNT TO THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
     8     PROGRAM FUND.
     9         (4)  THE SECRETARY OF THE BUDGET SHALL ANNUALLY TRANSFER
    10     FROM THE ACCOUNT TO THE CONTINUING ACCESS RELIEF FOR
    11     EMPLOYERS (CARE) FUND AN AMOUNT AT LEAST EQUAL TO THE AMOUNT
    12     DEPOSITED UNDER SECTION 712(M).
    13     (C.1)  TRANSFERS FROM THE SUPPLEMENTAL ASSISTANCE AND FUNDING
    14  ACCOUNT.--THE SECRETARY OF THE BUDGET SHALL ANNUALLY TRANSFER
    15  FUNDS FROM THE SUPPLEMENTAL ASSISTANCE AND FUNDING ACCOUNT
    16  ESTABLISHED UNDER SUBSECTION (A.1) TO THE PENNSYLVANIA ACCESS TO
    17  BASIC CARE (PA ABC) PROGRAM FUND.
    18     * * *
    19     [(E)  ADMINISTRATION ASSISTANCE.--THE INSURANCE DEPARTMENT
    20  SHALL PROVIDE ASSISTANCE TO THE DEPARTMENT OF PUBLIC WELFARE IN
    21  ADMINISTERING THE ACCOUNT.]
    22     SECTION 10.  SECTION 1115 OF THE ACT, AMENDED OCTOBER 27,
    23  2006 (P.L.1198, NO.128), IS AMENDED TO READ:
    24  SECTION 1115.  EXPIRATION.
    25     THE HEALTH CARE PROVIDER RETENTION PROGRAM ESTABLISHED UNDER
    26  THIS CHAPTER SHALL EXPIRE DECEMBER 31, [2008] 2018.
    27     SECTION 11.  THE ACT IS AMENDED BY ADDING A CHAPTER TO READ:
    28                             CHAPTER 13
    29         PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC) PROGRAM
    30  SECTION 1301.  SCOPE.
    20070S1137B1827                 - 41 -     

     1     THIS CHAPTER RELATES TO OFFERING HEALTH CARE COVERAGE TO
     2  ELIGIBLE ADULTS, INDIVIDUALS, EMPLOYEES AND EMPLOYERS.
     3  SECTION 1302.  DEFINITIONS.
     4     THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER
     5  SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
     6  CONTEXT CLEARLY INDICATES OTHERWISE:
     7     "ADULTBASIC PROGRAM."  THE ADULT BASIC COVERAGE INSURANCE
     8  PROGRAM ESTABLISHED UNDER SECTION 1303 OF THE ACT OF JUNE 26,
     9  2001 (P.L.755, NO.77), KNOWN AS THE TOBACCO SETTLEMENT ACT.
    10     "AVERAGE ANNUAL WAGE."  THE TOTAL ANNUAL WAGES PAID BY AN
    11  EMPLOYER DIVIDED BY THE NUMBER OF THE EMPLOYER'S FULL-TIME
    12  EQUIVALENT EMPLOYEES.
    13     "BEHAVIORAL HEALTH SERVICES."  MENTAL HEALTH OR SUBSTANCE
    14  ABUSE SERVICES.
    15     "CHILDREN'S HEALTH INSURANCE PROGRAM."  THE CHILDREN'S HEALTH
    16  CARE PROGRAM ESTABLISHED UNDER ARTICLE XXIII OF THE ACT OF MAY
    17  17, 1921 (P.L.682, NO.284), KNOWN AS THE INSURANCE COMPANY LAW
    18  OF 1921.
    19     "CHRONIC DISEASE MANAGEMENT PROGRAM."  A PROGRAM THAT ALLOWS
    20  A PATIENT, WITH THE SUPPORT OF A HEALTH CARE TEAM, TO PLAY AN
    21  ACTIVE ROLE IN THE PATIENT'S CARE AND ASSURES THAT THERE IS AN
    22  INFRASTRUCTURE TO ENSURE COMPLIANCE WITH ESTABLISHED PRACTICE
    23  GUIDELINES.
    24     "COMMUNITY HEALTH REINVESTMENT AGREEMENT."  THE AGREEMENT ON
    25  COMMUNITY HEALTH REINVESTMENT ENTERED INTO FEBRUARY 2, 2005, BY
    26  THE INSURANCE DEPARTMENT AND CAPITAL BLUE CROSS, HIGHMARK INC.,
    27  HOSPITAL SERVICE ASSOCIATION OF NORTHEASTERN PENNSYLVANIA AND
    28  INDEPENDENCE BLUE CROSS AND PUBLISHED IN THE PENNSYLVANIA
    29  BULLETIN AT 35 PA.B. 4155.
    30     "CONTRACTOR."  AN INSURER AWARDED A CONTRACT TO PROVIDE
    20070S1137B1827                 - 42 -     

     1  HEALTH CARE SERVICES UNDER THIS CHAPTER. THE TERM INCLUDES AN
     2  ENTITY AND ITS SUBSIDIARY WHICH IS ESTABLISHED UNDER 40 PA.C.S.
     3  CH. 61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR 63 (RELATING
     4  TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS), THE ACT OF
     5  MAY 17, 1921 (P.L.682, NO.284), KNOWN AS THE INSURANCE COMPANY
     6  LAW OF 1921, OR THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364),
     7  KNOWN AS THE HEALTH MAINTENANCE ORGANIZATION ACT.
     8     "DEPARTMENT."  THE INSURANCE DEPARTMENT OF THE COMMONWEALTH.
     9     "ELIGIBLE ADULT."  AN INDIVIDUAL WHO MEETS ALL OF THE
    10  FOLLOWING:
    11         (1)  IS AT LEAST 19 YEARS OF AGE BUT NOT MORE THAN 64
    12     YEARS OF AGE.
    13         (2)  LEGALLY RESIDES WITHIN THE UNITED STATES.
    14         (3)  HAS BEEN DOMICILED IN THIS COMMONWEALTH FOR AT LEAST
    15     90 DAYS PRIOR TO APPLICATION TO THE PROGRAM.
    16         (4)  IS INELIGIBLE TO RECEIVE CONTINUOUS ELIGIBILITY
    17     COVERAGE UNDER TITLE XIX OR XXI OF THE SOCIAL SECURITY ACT
    18     (49 STAT. 620, 42 U.S.C. § 301 ET SEQ.), EXCEPT FOR BENEFITS
    19     AUTHORIZED UNDER A WAIVER GRANTED BY THE UNITED STATES
    20     DEPARTMENT OF HEALTH AND HUMAN SERVICES TO IMPLEMENT THE
    21     PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC) PROGRAM.
    22         (5)  IS INELIGIBLE FOR MEDICAL ASSISTANCE OR MEDICARE.
    23         (6)  MAY CURRENTLY BE ENROLLED IN THE ADULTBASIC PROGRAM
    24     OR IS ON THE WAITING LIST FOR THAT PROGRAM ON THE EFFECTIVE
    25     DATE OF THIS SECTION.
    26         (7)  SUBJECT TO THE PROVISIONS OF SECTION 1305, HAS A
    27     HOUSEHOLD INCOME THAT IS NO GREATER THAN 300% OF THE FEDERAL
    28     POVERTY LEVEL AT THE TIME OF APPLICATION.
    29         (8)  HAS NOT BEEN COVERED BY ANY HEALTH INSURANCE PLAN OR
    30     PROGRAM FOR AT LEAST 180 DAYS IMMEDIATELY PRECEDING THE DATE
    20070S1137B1827                 - 43 -     

     1     OF APPLICATION, EXCEPT THAT THE 180-DAY PERIOD SHALL NOT
     2     APPLY TO AN ELIGIBLE ADULT WHO MEETS ONE OF THE FOLLOWING:
     3             (I)  IS ELIGIBLE TO RECEIVE BENEFITS UNDER THE ACT OF
     4         DECEMBER 5, 1936 (2ND SP.SESS., 1937 P.L.2897, NO.1),
     5         KNOWN AS THE UNEMPLOYMENT COMPENSATION LAW;
     6             (II)  WAS COVERED UNDER A HEALTH INSURANCE PLAN OR
     7         PROGRAM PROVIDED BY AN EMPLOYER, BUT AT THE TIME OF
     8         APPLICATION IS NO LONGER COVERED BECAUSE OF A CHANGE IN
     9         THE INDIVIDUAL'S EMPLOYMENT STATUS AND IS INELIGIBLE TO
    10         RECEIVE BENEFITS UNDER THE UNEMPLOYMENT COMPENSATION LAW;
    11             (III)  LOST COVERAGE AS A RESULT OF DIVORCE OR
    12         SEPARATION FROM A COVERED INDIVIDUAL, THE DEATH OF A
    13         COVERED INDIVIDUAL OR A CHANGE IN EMPLOYMENT STATUS OF A
    14         COVERED INDIVIDUAL; OR
    15             (IV)  IS TRANSFERRING FROM ANOTHER GOVERNMENT-
    16         SUBSIDIZED HEALTH INSURANCE PROGRAM, INCLUDING A TRANSFER
    17         THAT OCCURS AS A RESULT OF FAILURE TO MEET INCOME
    18         ELIGIBILITY REQUIREMENTS.
    19     "ELIGIBLE EMPLOYEE."  AN ELIGIBLE ADULT OR AN EMPLOYEE WHO
    20  MEETS ALL THE REQUIREMENTS OF AN ELIGIBLE ADULT OR EMPLOYEE AT
    21  THE TIME THE ELIGIBLE EMPLOYER MAKES APPLICATION TO THE PROGRAM.
    22     "ELIGIBLE EMPLOYER."  AN EMPLOYER THAT MEETS ALL OF THE
    23  FOLLOWING:
    24         (1)  HAS AT LEAST TWO BUT NOT MORE THAN 50 FULL-TIME
    25     EQUIVALENT EMPLOYEES.
    26         (2)  HAS NOT OFFERED HEALTH CARE COVERAGE THROUGH ANY
    27     PLAN OR PROGRAM DURING THE 180 DAYS IMMEDIATELY PRECEDING THE
    28     DATE OF APPLICATION FOR PARTICIPATION IN THE PENNSYLVANIA
    29     ACCESS TO BASIC CARE (PA ABC) PROGRAM.
    30         (3)  HAS NOT PROVIDED REMUNERATION IN ANY FORM TO AN
    20070S1137B1827                 - 44 -     

     1     EMPLOYEE ON PAYROLL FOR THE PURCHASE OF HEALTH CARE COVERAGE
     2     DURING THE 180 DAYS IMMEDIATELY PRECEDING THE DATE ON WHICH
     3     THE EMPLOYER APPLIES FOR PARTICIPATION IN THE PROGRAM.
     4         (4)  PAYS AN AVERAGE ANNUAL WAGE THAT IS LESS THAN 300%
     5     OF THE FEDERAL POVERTY LEVEL FOR AN INDIVIDUAL.
     6     "EMPLOYEE."  AN INDIVIDUAL WHO IS EMPLOYED FOR MORE THAN 20
     7  HOURS IN A SINGLE WEEK AND FROM WHOSE WAGES AN EMPLOYER IS
     8  REQUIRED UNDER THE INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-
     9  514, 26 U.S.C. § 1 ET SEQ.) TO WITHHOLD FEDERAL INCOME TAX.
    10     "EMPLOYER."  THE TERM SHALL INCLUDE:
    11         (1)  ANY OF THE FOLLOWING WHO OR WHICH EMPLOYS TWO BUT
    12     NOT MORE THAN 50 EMPLOYEES TO PERFORM SERVICES FOR
    13     REMUNERATION:
    14             (I)  AN INDIVIDUAL, PARTNERSHIP, ASSOCIATION,
    15         DOMESTIC OR FOREIGN CORPORATION OR OTHER ENTITY;
    16             (II)  THE LEGAL REPRESENTATIVE, TRUSTEE IN
    17         BANKRUPTCY, RECEIVER OR TRUSTEE OF ANY INDIVIDUAL,
    18         PARTNERSHIP, ASSOCIATION OR CORPORATION OR OTHER ENTITY;
    19         OR
    20             (III)  THE LEGAL REPRESENTATIVE OF A DECEASED
    21         INDIVIDUAL.
    22         (2)  AN INDIVIDUAL WHO IS SELF-EMPLOYED.
    23         (3)  THE EXECUTIVE, LEGISLATIVE AND JUDICIAL BRANCHES OF
    24     THE COMMONWEALTH AND ANY ONE OF ITS POLITICAL SUBDIVISIONS.
    25     "FUND."  THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
    26  PROGRAM FUND.
    27     "HEALTH BENEFIT PLAN."  AN INSURANCE COVERAGE PLAN THAT
    28  PROVIDES THE BENEFITS SET FORTH UNDER SECTION 1313. THE TERM
    29  DOES NOT INCLUDE ANY OF THE FOLLOWING:
    30         (1)  AN ACCIDENT-ONLY POLICY.
    20070S1137B1827                 - 45 -     

     1         (2)  A CREDIT-ONLY POLICY.
     2         (3)  A LONG-TERM OR DISABILITY INCOME POLICY.
     3         (4)  A SPECIFIED DISEASE POLICY.
     4         (5)  A MEDICARE SUPPLEMENT POLICY.
     5         (6)  A CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE
     6     UNIFORMED SERVICES (CHAMPUS) SUPPLEMENT POLICY.
     7         (7)  A FIXED INDEMNITY POLICY.
     8         (8)  A DENTAL-ONLY POLICY.
     9         (9)  A VISION-ONLY POLICY.
    10         (10)  A WORKERS' COMPENSATION POLICY.
    11         (11)  AN AUTOMOBILE MEDICAL PAYMENT POLICY PURSUANT TO 75
    12     PA.C.S. (RELATING TO VEHICLES).
    13         (12)  SUCH OTHER SIMILAR POLICIES PROVIDING FOR LIMITED
    14     BENEFITS.
    15     "HEALTH CARE COVERAGE."  A HEALTH BENEFIT PLAN OR OTHER FORM
    16  OF HEALTH CARE COVERAGE THAT IS APPROVED BY THE DEPARTMENT OF
    17  COMMUNITY AND ECONOMIC DEVELOPMENT IN CONSULTATION WITH THE
    18  INSURANCE DEPARTMENT. THE TERM DOES NOT INCLUDE COVERAGE UNDER
    19  THE PA ABC PROGRAM.
    20     "HEALTH MAINTENANCE ORGANIZATION" OR "HMO."  AN ENTITY
    21  ORGANIZED AND REGULATED UNDER THE ACT OF DECEMBER 29, 1972
    22  (P.L.1701, NO.364), KNOWN AS THE HEALTH MAINTENANCE ORGANIZATION
    23  ACT.
    24     "HEALTH SAVINGS ACCOUNT."  AN ACCOUNT ESTABLISHED BY AN
    25  EMPLOYER UNDER SECTION 1307 ON BEHALF OF AN EMPLOYEE WHOSE
    26  INCOME IS GREATER THAN 200% OF THE FEDERAL POVERTY LEVEL.
    27     "HOSPITAL."  AN INSTITUTION THAT HAS AN ORGANIZED MEDICAL
    28  STAFF ENGAGED PRIMARILY IN PROVIDING TO INPATIENTS, BY OR UNDER
    29  THE SUPERVISION OF PHYSICIANS, DIAGNOSTIC AND THERAPEUTIC
    30  SERVICES FOR THE CARE OF INJURED, DISABLED, PREGNANT, DISEASED
    20070S1137B1827                 - 46 -     

     1  OR SICK OR MENTALLY ILL PERSONS. THE TERM INCLUDES A FACILITY
     2  FOR THE DIAGNOSIS AND TREATMENT OF DISORDERS WITHIN THE SCOPE OF
     3  SPECIFIC MEDICAL SPECIALTIES. THE TERM DOES NOT INCLUDE A
     4  FACILITY THAT CARES EXCLUSIVELY FOR THE MENTALLY ILL.
     5     "HOSPITAL PLAN CORPORATION."  A HOSPITAL PLAN CORPORATION AS
     6  DEFINED IN 40 PA.C.S. § 6101 (RELATING TO DEFINITIONS).
     7     "INDIVIDUAL."  A PERSON WHO MEETS ALL THE REQUIREMENTS OF AN
     8  ELIGIBLE ADULT BUT WHOSE HOUSEHOLD INCOME IS GREATER THAN 300%
     9  OF THE FEDERAL POVERTY LEVEL.
    10     "INSURER."  A COMPANY OR HEALTH INSURANCE ENTITY LICENSED IN
    11  THIS COMMONWEALTH TO ISSUE AN INDIVIDUAL OR GROUP HEALTH,
    12  SICKNESS OR ACCIDENT POLICY OR SUBSCRIBER CONTRACT OR
    13  CERTIFICATE OR PLAN THAT PROVIDES MEDICAL OR HEALTH CARE
    14  COVERAGE BY A HEALTH CARE FACILITY OR LICENSED HEALTH CARE
    15  PROVIDER AND THAT IS OFFERED OR GOVERNED UNDER THIS ACT OR ANY
    16  OF THE FOLLOWING:
    17         (1)  THE ACT OF MAY 17, 1921 (P.L.682, NO.284), KNOWN AS
    18     THE INSURANCE COMPANY LAW OF 1921.
    19         (2)  THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364),
    20     KNOWN AS THE HEALTH MAINTENANCE ORGANIZATION ACT.
    21         (3)  THE ACT OF MAY 18, 1976 (P.L.123, NO.54), KNOWN AS
    22     THE INDIVIDUAL ACCIDENT AND SICKNESS INSURANCE MINIMUM
    23     STANDARDS ACT.
    24         (4)  40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN
    25     CORPORATIONS) OR 63 (RELATING TO PROFESSIONAL HEALTH SERVICES
    26     PLAN CORPORATIONS).
    27     "MEDICAL ASSISTANCE."  THE STATE PROGRAM OF MEDICAL
    28  ASSISTANCE ESTABLISHED UNDER THE ACT OF JUNE 13, 1967 (P.L.31,
    29  NO.21), KNOWN AS THE PUBLIC WELFARE CODE.
    30     "MEDICAL LOSS RATIO."  THE RATIO OF PAID MEDICAL CLAIM COSTS
    20070S1137B1827                 - 47 -     

     1  TO EARNED PREMIUMS.
     2     "MEDICARE."  THE FEDERAL PROGRAM ESTABLISHED UNDER TITLE
     3  XVIII OF THE SOCIAL SECURITY ACT (49 STAT. 620, 42 U.S.C. § 1395
     4  ET SEQ.).
     5     "OFFEROR."  AN INSURER THAT SUBMITS A BID OR PROPOSAL UNDER
     6  SECTION 1311 IN RESPONSE TO THE DEPARTMENT'S PROCUREMENT
     7  SOLICITATION.
     8     "PREEXISTING CONDITION."  A DISEASE OR PHYSICAL CONDITION FOR
     9  WHICH MEDICAL ADVICE OR TREATMENT HAS BEEN RECEIVED PRIOR TO THE
    10  EFFECTIVE DATE OF COVERAGE.
    11     "PRESCRIPTION DRUG."  A CONTROLLED SUBSTANCE, OTHER DRUG OR
    12  DEVICE FOR MEDICATION DISPENSED BY ORDER OF AN APPROPRIATELY
    13  LICENSED MEDICAL PROFESSIONAL.
    14     "PROFESSIONAL HEALTH SERVICES PLAN CORPORATION."  A NOT-FOR-
    15  PROFIT CORPORATION OPERATING UNDER THE PROVISIONS OF 40 PA.C.S.
    16  CH. 63 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN
    17  CORPORATIONS).
    18     "PROGRAM."  THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC)
    19  PROGRAM ESTABLISHED UNDER THIS CHAPTER.
    20     "QUALIFYING HEALTH CARE COVERAGE."  A HEALTH BENEFIT PLAN OR
    21  OTHER FORM OF HEALTH CARE COVERAGE ACTUARIALLY EQUIVALENT TO THE
    22  BENEFITS IN SECTION 1313 AND APPROVED BY THE INSURANCE
    23  DEPARTMENT.
    24     "TERMINATE."  THE TERM INCLUDES CANCELLATION, NONRENEWAL AND
    25  RESCISSION.
    26     "UNEMPLOYMENT COMPENSATION LAW."  THE ACT OF DECEMBER 5, 1936
    27  (2ND SP.SESS., 1937 P.L.2897, NO.1), KNOWN AS THE UNEMPLOYMENT
    28  COMPENSATION LAW.
    29     "UNINSURED PERIOD."  A CONTINUOUS PERIOD OF TIME OF NOT LESS
    30  THAN 180 CONSECUTIVE DAYS IMMEDIATELY PRECEDING ENROLLMENT
    20070S1137B1827                 - 48 -     

     1  APPLICATION DURING WHICH AN ADULT HAS BEEN WITHOUT HEALTH CARE
     2  COVERAGE IN ACCORDANCE WITH THE REQUIREMENTS OF THIS CHAPTER.
     3  SECTION 1303.  ESTABLISHMENT OF PROGRAM.
     4     THE PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC) PROGRAM IS
     5  ESTABLISHED IN THE DEPARTMENT.
     6  SECTION 1304.  FUNDING.
     7     (A)  SOURCES.--THE FOLLOWING ARE THE SOURCES OF MONEY FOR THE
     8  PROGRAM:
     9         (1)  MONEY RECEIVED FROM THE SUPPLEMENTAL ASSISTANCE AND
    10     FUNDING ACCOUNT ESTABLISHED UNDER SECTION 1112(A.1).
    11         (2)  MONEY RECEIVED FROM THE FEDERAL GOVERNMENT OR OTHER
    12     SOURCES.
    13         (3)  MONEY REQUIRED TO BE DEPOSITED PURSUANT TO OTHER
    14     PROVISIONS OF THIS CHAPTER OR ANY OTHER LAW OF THIS
    15     COMMONWEALTH.
    16         (4)  UPON IMPLEMENTATION OF THE PROGRAM:
    17             (I)  ONLY THOSE FUNDS APPROPRIATED FOR HEALTH
    18         INVESTMENT INSURANCE UNDER SECTION 306(B)(1)(VI) OF THE
    19         ACT OF JUNE 26, 2001 (P.L.755, NO.77), KNOWN AS THE
    20         TOBACCO SETTLEMENT ACT, AND DESIGNATED FOR THE ADULTBASIC
    21         PROGRAM.
    22             (II)  MONEY CURRENTLY REQUIRED TO BE DEDICATED TO THE
    23         ADULTBASIC PROGRAM OR ANY ALTERNATIVE PROGRAM TO BENEFIT
    24         PERSONS OF LOW INCOME UNDER THE COMMUNITY HEALTH
    25         REINVESTMENT AGREEMENT WITHIN THE RESPECTIVE SERVICE
    26         AREAS FOR EACH PARTY TO THAT AGREEMENT. MONEY UNDER THIS
    27         SUBPARAGRAPH SHALL BE USED ONLY TO DEFRAY THE COST OF THE
    28         PROGRAM AND SUBSIDIES APPROVED UNDER SECTIONS 1305 AND
    29         1306.
    30         (5)  ANY MONEYS DERIVED FROM WHATEVER SOURCES AND
    20070S1137B1827                 - 49 -     

     1     DESIGNATED SPECIFICALLY TO FUND THE PROGRAM.
     2         (6)  RETURN ON INVESTMENTS IN THE FUND.
     3  SECTION 1305.  PURCHASE BY ELIGIBLE ADULTS AND INDIVIDUALS.
     4     (A)  ELIGIBLE ADULTS.--AN ELIGIBLE ADULT WHO SEEKS TO
     5  PURCHASE COVERAGE UNDER THE PROGRAM MUST:
     6         (1)  SUBMIT AN APPLICATION TO THE DEPARTMENT OR ITS
     7     CONTRACTOR.
     8         (2)  PAY TO THE DEPARTMENT OR ITS CONTRACTOR THE AMOUNT
     9     OF THE PREMIUM SPECIFIED.
    10         (3)  BE RESPONSIBLE FOR ANY REQUIRED COPAYMENTS FOR
    11     HEALTH CARE SERVICES RENDERED UNDER THE HEALTH BENEFIT PLAN
    12     IN SECTION 1313 SUBJECT TO FEDERAL WAIVER REQUIREMENTS.
    13         (4)  NOTIFY THE DEPARTMENT OR ITS CONTRACTOR OF ANY
    14     CHANGE IN THE ELIGIBLE ADULT'S OR INDIVIDUAL'S HOUSEHOLD
    15     INCOME.
    16     (B)  MONTHLY PREMIUMS.--EXCEPT TO THE EXTENT THAT CHANGES MAY
    17  BE NECESSARY TO MEET FEDERAL REQUIREMENTS UNDER SECTION 1317 OR
    18  TO ENCOURAGE ELIGIBLE EMPLOYER PARTICIPATION, SUBSIDIES FOR THE
    19  2008-2009 FISCAL YEAR AND EACH FISCAL YEAR THEREAFTER SHALL
    20  RESULT IN THE FOLLOWING PREMIUM AMOUNT BASED ON HOUSEHOLD INCOME
    21  FOR A HEALTH BENEFIT PLAN:
    22         (1)  FOR AN ELIGIBLE ADULT WHOSE HOUSEHOLD INCOME IS NOT
    23     GREATER THAN 150% OF THE FEDERAL POVERTY LEVEL, NO MONTHLY
    24     PREMIUM.
    25         (2)  FOR AN ELIGIBLE ADULT WHOSE HOUSEHOLD INCOME IS
    26     GREATER THAN 150% BUT NOT GREATER THAN 175% OF THE FEDERAL
    27     POVERTY LEVEL, A MONTHLY PREMIUM OF $40.
    28         (3)  FOR AN ELIGIBLE ADULT WHOSE HOUSEHOLD INCOME IS
    29     GREATER THAN 175% BUT NOT GREATER THAN 200% OF THE FEDERAL
    30     POVERTY LEVEL, A MONTHLY PREMIUM OF $50.
    20070S1137B1827                 - 50 -     

     1         (4)  FOR AN ELIGIBLE ADULT WHOSE HOUSEHOLD INCOME IS
     2     GREATER THAN 200%, A MONTHLY PREMIUM MAY BE ESTABLISHED BASED
     3     UPON FEDERAL REQUIREMENTS AND IN ACCORDANCE WITH FEDERAL
     4     WAIVERS, IF APPLICABLE, BY THE COMMISSIONER.
     5     (C)  OTHER ELIGIBLE ADULTS.--AN ELIGIBLE ADULT WHOSE
     6  HOUSEHOLD INCOME IS GREATER THAN 200% OF THE FEDERAL POVERTY
     7  LEVEL MAY PURCHASE UNDER THE PROGRAM EITHER THE BENEFIT PACKAGE
     8  UNDER SECTION 1313 OR OTHER QUALIFYING HEALTH CARE COVERAGE AT
     9  THE PER-MEMBER, PER-MONTH PREMIUM COST.
    10     (D)  INDIVIDUALS.--FOR AN INDIVIDUAL WHOSE HOUSEHOLD INCOME
    11  IS GREATER THAN 300% OF THE FEDERAL POVERTY LEVEL, AN INDIVIDUAL
    12  MAY PURCHASE THE BENEFIT PACKAGE UNDER SECTION 1313 AT THE PER-
    13  MEMBER, PER-MONTH PREMIUM COST AS LONG AS THE INDIVIDUAL
    14  DEMONSTRATES, ON AN ANNUAL BASIS AND IN A MANNER DETERMINED BY
    15  THE DEPARTMENT, EITHER ONE OF THE FOLLOWING:
    16         (1)  THE INDIVIDUAL IS UNABLE TO AFFORD INDIVIDUAL OR
    17     GROUP COVERAGE BECAUSE THAT COVERAGE WOULD EXCEED 10% OF THE
    18     INDIVIDUAL'S HOUSEHOLD INCOME OR BECAUSE THE TOTAL COST OF
    19     COVERAGE FOR THE INDIVIDUAL IS 150% OF THE PREMIUM COST
    20     ESTABLISHED UNDER THIS SECTION FOR THAT SERVICE AREA.
    21         (2)  THE INDIVIDUAL HAS BEEN REFUSED COVERAGE BY AN
    22     INSURER BECAUSE THE INDIVIDUAL OR A MEMBER OF THAT
    23     INDIVIDUAL'S IMMEDIATE FAMILY HAS A PREEXISTING CONDITION AND
    24     COVERAGE IS NOT AVAILABLE TO THE INDIVIDUAL.
    25     (E)  ESTABLISHING PREMIUMS.--FOR EACH FISCAL YEAR BEGINNING
    26  AFTER JUNE 30, 2009, THE DEPARTMENT MAY ADJUST THE PREMIUM
    27  AMOUNTS UNDER SUBSECTION (B) TO REFLECT CHANGES IN THE COST OF
    28  MEDICAL SERVICES AND SHALL FORWARD NOTICE OF THE NEW PREMIUM
    29  AMOUNTS TO THE LEGISLATIVE REFERENCE BUREAU FOR PUBLICATION AS A
    30  NOTICE IN THE PENNSYLVANIA BULLETIN.
    20070S1137B1827                 - 51 -     

     1     (F)  PURCHASE OF HEALTH BENEFIT PLAN.--AN ELIGIBLE ADULT'S OR
     2  INDIVIDUAL'S PAYMENT TO THE DEPARTMENT OR ITS CONTRACTOR UNDER
     3  SUBSECTION (B) SHALL BE USED TO PURCHASE THE BENEFIT HEALTH PLAN
     4  ESTABLISHED UNDER SECTION 1313 AND MUST BE REMITTED IN A TIMELY
     5  MANNER.
     6     (G)  SUBSIDY.--FUNDING FOR THE PROGRAM SHALL BE USED BY THE
     7  DEPARTMENT TO PAY THE DIFFERENCE BETWEEN THE TOTAL MONTHLY COST
     8  OF THE HEALTH BENEFIT PLAN AND THE ELIGIBLE ADULT'S PREMIUM.
     9  SUBSIDIZATION OF THE HEALTH BENEFIT PLAN IS CONTINGENT UPON THE
    10  AMOUNT OF THE FUNDING FOR THE PROGRAM AND IS LIMITED TO ELIGIBLE
    11  ADULTS IN COMPLIANCE WITH THIS SECTION.
    12  SECTION 1306.  PARTICIPATION BY ELIGIBLE EMPLOYERS AND ELIGIBLE
    13                 EMPLOYEES.
    14     (A)  ELIGIBLE EMPLOYERS.--AN ELIGIBLE EMPLOYER THAT SEEKS TO
    15  PARTICIPATE IN THE PROGRAM SHALL:
    16         (1)  OFFER TO ALL ELIGIBLE EMPLOYEES THE OPPORTUNITY TO
    17     PARTICIPATE IN THE PROGRAM AND ENROLL AT LEAST ONE-HALF OF
    18     THE ELIGIBLE EMPLOYEES.
    19         (2)  COMPLY WITH THE APPLICATION PROCESS ESTABLISHED BY
    20     THE DEPARTMENT OR ITS CONTRACTOR.
    21         (3)  REMIT TO THE DEPARTMENT OR ITS CONTRACTOR ANY
    22     PREMIUM AMOUNTS REQUIRED UNDER SUBSECTIONS (C) AND (D).
    23         (4)  ALLOW HEALTH INSURANCE PREMIUMS TO BE PAID BY
    24     ELIGIBLE EMPLOYEES ON A PRETAX BASIS AND INFORM ITS EMPLOYEES
    25     OF THE AVAILABILITY OF SUCH PROGRAM.
    26         (5)  NOTIFY THE DEPARTMENT OR ITS CONTRACTOR OF ANY
    27     CHANGE IN THE ELIGIBLE EMPLOYEE'S INCOME.
    28     (B)  ELIGIBLE EMPLOYEES.--AN ELIGIBLE EMPLOYEE WHO SEEKS TO
    29  PARTICIPATE WITH AN ELIGIBLE EMPLOYER UNDER THE PROGRAM MUST:
    30         (1)  SUBMIT AN APPLICATION WITH THE ELIGIBLE EMPLOYER TO
    20070S1137B1827                 - 52 -     

     1     THE DEPARTMENT OR ITS CONTRACTOR.
     2         (2)  BE RESPONSIBLE FOR ANY REQUIRED COPAYMENTS FOR
     3     HEALTH CARE SERVICES RENDERED UNDER THE HEALTH BENEFIT PLAN
     4     IN SECTION 1313.
     5     (C)  PREMIUMS FOR EMPLOYERS.--
     6         (1)  IN ADDITION TO REMITTING THE ELIGIBLE EMPLOYEE
     7     PORTION UNDER SUBSECTIONS (A) AND (D), AN ELIGIBLE EMPLOYER
     8     SHALL PAY THE EMPLOYER SHARE OF THE TOTAL MONTHLY COST FOR
     9     EACH PARTICIPATING EMPLOYEE TO THE DEPARTMENT OR ITS
    10     CONTRACTOR EACH MONTH.
    11         (2)  IN ADDITION TO REMITTING THE ELIGIBLE EMPLOYEE
    12     PORTION UNDER PARAGRAPH (1), AN ELIGIBLE EMPLOYER'S PREMIUM
    13     PAYMENT TO THE DEPARTMENT OR ITS CONTRACTOR SHALL BE AT LEAST
    14     50% OF THE TOTAL MONTHLY COST FOR EACH ELIGIBLE EMPLOYEE BUT
    15     NOT LESS THAN $150.
    16     (D)  PREMIUMS FOR ELIGIBLE EMPLOYEES.--THE PREMIUM FOR
    17  ELIGIBLE EMPLOYEES SHALL BE THE SAME AS THE PREMIUM REQUIRED TO
    18  BE PAID BY ELIGIBLE ADULTS UNDER SECTION 1305(B).
    19     (E)  PURCHASE BY CERTAIN ELIGIBLE EMPLOYEES.--AN ELIGIBLE
    20  EMPLOYEE WHOSE HOUSEHOLD INCOME IS GREATER THAN 200% OF THE
    21  FEDERAL POVERTY LEVEL MAY PURCHASE EITHER THE BENEFIT PACKAGE
    22  UNDER SECTION 1313 OR OTHER QUALIFYING HEALTH CARE COVERAGE
    23  UNDER SECTION 1307 AT THE PER-MEMBER, PER-MONTH PREMIUM COST
    24  MINUS ANY AMOUNT REMITTED BY THE EMPLOYER UNDER SUBSECTION (C).
    25     (F)  PUBLISHING PREMIUM AMOUNTS.--FOR EACH FISCAL YEAR
    26  BEGINNING AFTER JUNE 30, 2009, THE DEPARTMENT MAY ESTABLISH
    27  DIFFERENT PREMIUM AMOUNTS FOR ELIGIBLE EMPLOYEES AND ELIGIBLE
    28  EMPLOYERS AS REQUIRED UNDER THIS SECTION AND SHALL FORWARD
    29  NOTICE OF THE NEW PREMIUM AMOUNTS TO THE LEGISLATIVE REFERENCE
    30  BUREAU FOR PUBLICATION AS A NOTICE IN THE PENNSYLVANIA BULLETIN.
    20070S1137B1827                 - 53 -     

     1     (G)  PURCHASE OF COVERAGE.--A PREMIUM PAYMENT MADE BY AN
     2  ELIGIBLE EMPLOYER TO THE DEPARTMENT OR ITS CONTRACTOR SHALL BE
     3  USED TO PURCHASE THE HEALTH BENEFIT PLAN AND MUST BE REMITTED IN
     4  A TIMELY MANNER.
     5     (H)  ALTERNATIVE COVERAGE.--
     6         (1)  NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE
     7     CONTRARY, EMPLOYER-BASED COVERAGE MAY, IN THE COMMISSIONER'S
     8     SOLE DISCRETION, BE PURCHASED IN PLACE OF PARTICIPATION IN
     9     THE PROGRAM OR MAY BE PURCHASED IN CONJUNCTION WITH ANY
    10     PORTION OF THE PROGRAM PROVIDED OUTSIDE THE SCOPE OF THE
    11     PROGRAM CONTRACTS BY THE COMMONWEALTH PAYING THE EMPLOYEE'S
    12     SHARE OF THE PREMIUM TO THE EMPLOYER IF IT IS MORE COST
    13     EFFECTIVE FOR THE COMMONWEALTH TO PURCHASE HEALTH CARE
    14     COVERAGE FROM AN EMPLOYEE'S EMPLOYER-BASED PROGRAM THAN TO
    15     PAY THE COMMONWEALTH'S SHARE OF A SUBSIDIZED PREMIUM.
    16         (2)  THIS SECTION SHALL APPLY TO ANY EMPLOYER-BASED
    17     PROGRAM, WHETHER INDIVIDUAL OR FAMILY, SUCH THAT IF THE
    18     COMMONWEALTH'S SHARE FOR THE EMPLOYEE PLUS ITS SHARE FOR ANY
    19     SPOUSE UNDER THE PROGRAM OR CHILDREN UNDER THE CHILDREN'S
    20     HEALTH INSURANCE PROGRAM IS GREATER THAN THE EMPLOYEE'S
    21     PREMIUM SHARE FOR FAMILY COVERAGE UNDER THE EMPLOYER-BASED
    22     PROGRAM, THE COMMONWEALTH MAY CHOOSE TO PAY THE LATTER ALONE
    23     OR IN COMBINATION WITH PROVIDING ANY BENEFIT THE COMMONWEALTH
    24     DOES NOT PROVIDE THROUGH ITS PROGRAM CONTRACTS.
    25     (I)  TERMINATION OF EMPLOYMENT.--AN ELIGIBLE EMPLOYEE WHO IS
    26  TERMINATED FROM EMPLOYMENT SHALL BE ELIGIBLE TO CONTINUE
    27  PARTICIPATING IN THE PROGRAM IF THE ELIGIBLE EMPLOYEE CONTINUES
    28  TO MEET THE REQUIREMENTS AS AN ELIGIBLE ADULT AND PAYS ANY
    29  INCREASED PREMIUM REQUIRED.
    30  SECTION 1307.  HEALTH SAVINGS ACCOUNTS.
    20070S1137B1827                 - 54 -     

     1     THE DEPARTMENT SHALL PERMIT THE ESTABLISHMENT OF HEALTH
     2  SAVINGS ACCOUNTS THAT ARE ACTUARIALLY EQUIVALENT TO THE BENEFITS
     3  IN SECTION 1313 FOR EMPLOYEES WHO ENROLL IN THE PROGRAM. HEALTH
     4  SAVINGS ACCOUNTS ESTABLISHED UNDER THE PROGRAM SHALL MEET THE
     5  REQUIREMENTS AS DEFINED IN SECTION 223(D) OF THE INTERNAL
     6  REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. § 223(D)).
     7  SECTION 1308.  CONTINUING ACCESS WITH RELIEF FOR EMPLOYERS
     8                 (CARE) GRANTS.
     9     (A)  GENERAL RULE.--A CONTINUING ACCESS WITH RELIEF FOR
    10  EMPLOYERS (CARE) GRANT SHALL BE PROVIDED TO EMPLOYERS THAT MEET
    11  THE REQUIREMENTS OF THIS SECTION.
    12     (B)  ELIGIBILITY.--AN EMPLOYER IS ELIGIBLE TO RECEIVE A CARE
    13  GRANT IF THAT EMPLOYER MEETS THE FOLLOWING:
    14         (1)  HAS MAINTAINED COVERAGE FOR AT LEAST 12 CONSECUTIVE
    15     MONTHS PRIOR TO THE EFFECTIVE DATE OF THIS ACT; OR
    16         (2)  (I)  HAS MAINTAINED COVERAGE FOR AT LEAST 12
    17         CONSECUTIVE MONTHS PRIOR TO APPLYING FOR THE CARE GRANT;
    18             (II)  HAS INCURRED A HEALTH CARE EXPENSE IN THIS
    19         COMMONWEALTH; AND
    20             (III)  HAS A TAX LIABILITY FOR THE YEAR IN WHICH
    21         APPLICATION IS MADE FOR THE CARE GRANT.
    22     (C)  APPLICATION.--BEGINNING JULY 1, 2009, AND FOR EACH YEAR
    23  THEREAFTER, AN EMPLOYER SEEKING TO RECEIVE A CARE GRANT SHALL
    24  SUBMIT AN APPLICATION TO THE DEPARTMENT CONTAINING, AT A
    25  MINIMUM, THE FOLLOWING INFORMATION:
    26         (1)  A STATEMENT OF THE AGGREGATE HEALTH CARE EXPENSE
    27     MADE BY THE EMPLOYER TO PROVIDE COVERAGE DURING THE PREVIOUS
    28     12 CONSECUTIVE MONTHS TO EMPLOYEES.
    29         (2)  THE NAMES, ADDRESSES AND SOCIAL SECURITY NUMBERS OF
    30     THE EMPLOYEES PROVIDED HEALTH CARE COVERAGE UNDER PARAGRAPH
    20070S1137B1827                 - 55 -     

     1     (1) AND WHETHER THAT HEALTH CARE COVERAGE IS FOR THE EMPLOYEE
     2     OR THE EMPLOYEE AND THE EMPLOYEE'S SPOUSE AND/OR DEPENDENTS.
     3         (3)  THE NAMES AND ADDRESSES OF THE INSURANCE CARRIERS OR
     4     UNDERWRITERS THAT RECEIVED PAYMENT FROM THE EMPLOYER FOR THE
     5     HEALTH CARE COVERAGE PROVIDED UNDER PARAGRAPH (2).
     6     (D)  COMPUTATION.--AN EMPLOYER WHO QUALIFIES UNDER SUBSECTION
     7  (B) SHALL RECEIVE A GRANT LIMITED TO ACTUAL EMPLOYER HEALTH CARE
     8  EXPENSES PAID FOR THE PREVIOUS 12 CONSECUTIVE MONTHS IN
     9  ACCORDANCE WITH THE FOLLOWING:
    10         (1)  NO GREATER THAN 25% OF THE EMPLOYER'S HEALTH CARE
    11     EXPENSE TO MAINTAIN HEALTH CARE COVERAGE FOR THE EMPLOYEE.
    12         (2)  NO GREATER THAN 50% OF THE EMPLOYER'S HEALTH CARE
    13     EXPENSE TO MAINTAIN HEALTH CARE COVERAGE FOR THE EMPLOYEE,
    14     THE EMPLOYEE'S SPOUSE AND/OR DEPENDENTS.
    15         (3)  THE TOTAL AMOUNT OF PARAGRAPHS (1) AND (2) SHALL NOT
    16     EXCEED THE TAX LIABILITY OWED BY THE EMPLOYER FOR THE YEAR
    17     APPLICATION IS MADE FOR THE CARE GRANT.
    18         (4)  IF NO TAX LIABILITY IS OWED BY THE EMPLOYER THEN THE
    19     EMPLOYER MAY NOT APPLY FOR A CARE GRANT.
    20     (E)  DUTIES OF DEPARTMENT.--THE DEPARTMENT HAS THE FOLLOWING
    21  DUTIES:
    22         (1)  ADMINISTER THE PROGRAM.
    23         (2)  IN CONSULTATION WITH OTHER APPROPRIATE COMMONWEALTH
    24     AGENCIES:
    25             (I)  DEVELOP AN APPLICATION FOR THE COLLECTION OF
    26         INFORMATION THAT IS CONSISTENT WITH THE REQUIREMENTS OF
    27         THIS SECTION AND THAT CONTAINS ANY OTHER INFORMATION THAT
    28         MAY BE NECESSARY TO AWARD CARE GRANTS.
    29             (II)  DEVELOP A PROCESS TO DETERMINE THE VALIDITY OF
    30         INFORMATION COLLECTED BY THE DEPARTMENT FROM THE
    20070S1137B1827                 - 56 -     

     1         APPLICATION WITH INFORMATION FILED BY THE EMPLOYER, THE
     2         EMPLOYEE OR INSURERS WITH ANY OTHER AGENCY. THIS PROCESS
     3         SHALL INCLUDE GUARANTEEING CONFIDENTIALITY OF EMPLOYER
     4         AND EMPLOYEE INFORMATION THAT IS CONSISTENT WITH FEDERAL
     5         AND STATE LAWS.
     6     (F)  COORDINATION.--THE DEPARTMENT SHALL COORDINATE WITH
     7  OTHER DEPARTMENTS IN THE IMPLEMENTATION OF THIS SECTION.
     8     (G)  LIMITATION ON GRANTS.--THE TOTAL AMOUNT OF GRANTS
     9  APPROVED BY THE DEPARTMENT SHALL NOT EXCEED THE AMOUNT OF
    10  FUNDING DESIGNATED UNDER SECTION 762. ANY APPLICATION FILED BY
    11  AN EMPLOYER WHEN FUNDING IS NOT AVAILABLE SHALL NOT BE
    12  CONSIDERED AND CANNOT BE CARRIED FORWARD FOR CONSIDERATION IN
    13  ANY SUCCEEDING FISCAL YEAR.
    14     (H)  LAPSE.--FUNDS NOT USED BY THE DEPARTMENT FOR CARE GRANTS
    15  AT THE END OF THE FISCAL YEAR SHALL LAPSE BACK TO THE HEALTH
    16  CARE PROVIDER RETENTION ACCOUNT AND BE DESIGNATED TO THE PA ABC
    17  PROGRAM.
    18     (I)  REPORT TO GENERAL ASSEMBLY.--THE DEPARTMENT SHALL SUBMIT
    19  AN ANNUAL REPORT TO THE GENERAL ASSEMBLY INDICATING THE
    20  EFFECTIVENESS OF THE PROGRAM PROVIDED UNDER THIS SECTION NO
    21  LATER THAN MARCH 15, 2010. THE REPORT SHALL INCLUDE THE NAMES OF
    22  ALL THE EMPLOYERS THAT RECEIVED A CARE GRANT AS OF THE DATE OF
    23  THE REPORT AND THE AMOUNT OF EACH CARE GRANT APPROVED. THE
    24  REPORT MAY ALSO INCLUDE ANY RECOMMENDATIONS FOR CHANGES IN THE
    25  CALCULATION OR ADMINISTRATION OF THE CARE GRANT.
    26     (J)  SUNSET.--THIS SECTION SHALL SUNSET JANUARY 1, 2018.
    27     (K)  DEFINITIONS.--AS USED IN THIS SECTION, THE FOLLOWING
    28  WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
    29  SUBSECTION:
    30     "CARE GRANT."  A CONTINUING ACCESS WITH RELIEF FOR EMPLOYERS
    20070S1137B1827                 - 57 -     

     1  (CARE) GRANT PROVIDED BY THE DEPARTMENT OF COMMUNITY AND
     2  ECONOMIC DEVELOPMENT.
     3     "COVERAGE."  HEALTH CARE COVERAGE THAT IS MAINTAINED BY AN
     4  EMPLOYER FOR AN EMPLOYEE, THE EMPLOYEE'S SPOUSE AND/OR
     5  DEPENDENTS FOR 12 CONSECUTIVE MONTHS.
     6     "DEPARTMENT."  THE DEPARTMENT OF COMMUNITY AND ECONOMIC
     7  DEVELOPMENT OF THE COMMONWEALTH.
     8     "EMPLOYEE."  AN INDIVIDUAL WHO MEETS THE FOLLOWING:
     9         (1)  IS EMPLOYED FOR MORE THAN 20 HOURS IN A SINGLE WEEK
    10     AND FROM WHOSE WAGES AN EMPLOYER IS REQUIRED UNDER THE
    11     INTERNAL REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C.
    12     §1 ET SEQ.) TO WITHHOLD FEDERAL INCOME TAX.
    13         (2)  IS AT LEAST 19 YEARS OF AGE BUT NO OLDER THAN 64
    14     YEARS OF AGE.
    15         (3)  LEGALLY RESIDES WITHIN THE UNITED STATES.
    16         (4)  HAS BEEN DOMICILED IN THIS COMMONWEALTH FOR AT LEAST
    17     90 DAYS PRIOR TO ENROLLMENT.
    18         (5)  HAS A HOUSEHOLD INCOME THAT IS NO GREATER THAN 300%
    19     OF THE FEDERAL POVERTY LEVEL AT THE TIME OF APPLICATION.
    20     "EMPLOYER."  AN EMPLOYER THAT MEETS ALL OF THE FOLLOWING:
    21         (1)  HAS AT LEAST TWO, BUT NOT MORE THAN 50 FULL-TIME
    22     EQUIVALENT EMPLOYEES.
    23         (2)  PAYS AN AVERAGE ANNUAL WAGE THAT IS NOT GREATER THAN
    24     300% OF THE FEDERAL POVERTY LIMIT FOR AN INDIVIDUAL.
    25     "HEALTH CARE COVERAGE."  A HEALTH BENEFIT PLAN OR OTHER FORM
    26  OF HEALTH CARE COVERAGE THAT IS APPROVED BY THE DEPARTMENT OF
    27  COMMUNITY AND ECONOMIC DEVELOPMENT IN CONSULTATION WITH THE
    28  INSURANCE DEPARTMENT. THE TERM DOES NOT INCLUDE COVERAGE UNDER
    29  THE PA ABC PROGRAM.
    30     "HEALTH CARE EXPENSE."  A PAYMENT MADE BY AN EMPLOYER TO
    20070S1137B1827                 - 58 -     

     1  MAINTAIN HEALTH CARE COVERAGE FOR AN EMPLOYEE, THE EMPLOYEE'S
     2  SPOUSE AND/OR DEPENDENTS.
     3     "PROGRAM."  THE CONTINUING ACCESS WITH RELIEF FOR EMPLOYERS
     4  (CARE) GRANT PROGRAM ESTABLISHED UNDER THIS SECTION.
     5     "TAX LIABILITY."  LIABILITY UNDER ARTICLE III, IV OR VI OF
     6  THE ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE TAX REFORM
     7  CODE OF 1971.
     8  SECTION 1309.  PROGRAM REQUIREMENTS.
     9     (A)  RATES.--RATES FOR THE PROGRAM SHALL BE APPROVED ANNUALLY
    10  BY THE DEPARTMENT AND MAY VARY BY REGION AND CONTRACTOR. RATES
    11  SHALL BE BASED ON AN ACTUARIALLY SOUND AND ADEQUATE REVIEW.
    12     (B)  ANNUAL PREMIUMS REVIEW.--PREMIUMS FOR THE PROGRAM SHALL
    13  BE ESTABLISHED ANNUALLY BY THE DEPARTMENT.
    14     (C)  USE OF FUNDING.--FUNDING SHALL BE USED BY THE DEPARTMENT
    15  TO PAY THE DIFFERENCE BETWEEN THE TOTAL MONTHLY COST OF THE
    16  HEALTH BENEFIT PLAN AND THE PREMIUM PAYMENTS BY THE ELIGIBLE
    17  EMPLOYEE, THE ELIGIBLE EMPLOYER OR THE ELIGIBLE ADULT.
    18     (D)  MONTHLY INCREASES.--WITH RESPECT TO A CONTINUOUS PERIOD
    19  OF ELIGIBILITY FOR AN ELIGIBLE EMPLOYER TO APPLY FOR
    20  PARTICIPATION IN THE PROGRAM AND IN ADDITION TO THE REQUIREMENTS
    21  OF SECTION 1306(D), AN ELIGIBLE EMPLOYER SHALL BE SUBJECT TO A
    22  1% INCREASE IN THE BASE PREMIUM FOR EACH MONTH AFTER THE LATTER
    23  OF THE FOLLOWING:
    24         (1)  TWELVE MONTHS FROM THE DATE OF THE EFFECTIVE DATE OF
    25     THIS SECTION; OR
    26         (2)  TWELVE MONTHS FROM THE DATE THE ELIGIBLE EMPLOYER
    27     FILES FOR A FEDERAL OR STATE TAX IDENTIFICATION NUMBER.
    28     (E)  FUNDING CONTINGENCY FOR SUBSIDIZATION.--SUBSIDIZATION OF
    29  PREMIUMS PAID UNDER SECTIONS 1305 AND 1306 IS CONTINGENT UPON
    30  THE AMOUNT OF THE FUNDING AVAILABLE TO THE PROGRAM, THE FEDERAL
    20070S1137B1827                 - 59 -     

     1  POVERTY LEVELS APPROVED BY THE FEDERAL WAIVER OR STATE PLAN
     2  AMENDMENTS GRANTED UNDER SECTION 1317 AND IS LIMITED TO ELIGIBLE
     3  ADULTS AND ELIGIBLE EMPLOYEES WHO ARE IN COMPLIANCE WITH THE
     4  REQUIREMENTS UNDER THIS CHAPTER.
     5     (F)  LIMIT ON SUBSIDY.--AT NO TIME SHALL THE SUBSIDY PAID BY
     6  THE COMMONWEALTH FROM FUNDS OTHER THAN FEDERAL MONEYS FOR THE
     7  PREMIUM OF ELIGIBLE EMPLOYEES BE MORE THAN 40% OF THE TOTAL COST
     8  OF THE HEALTH BENEFIT PLAN PURCHASED IN EACH REGION OR WITH EACH
     9  CONTRACTOR.
    10  SECTION 1310.  DUTIES OF DEPARTMENT.
    11     THE DEPARTMENT HAS THE FOLLOWING DUTIES:
    12         (1)  ADMINISTER THE PROGRAM ON A STATEWIDE BASIS.
    13         (2)  SOLICIT BIDS OR PROPOSALS AND AWARD CONTRACTS AS
    14     FOLLOWS:
    15             (I)  THE DEPARTMENT SHALL SOLICIT BIDS OR PROPOSALS
    16         AND AWARD CONTRACTS FOR THE BASIC BENEFIT PACKAGE UNDER
    17         SECTION 1313 THROUGH A COMPETITIVE PROCUREMENT PROCESS IN
    18         ACCORDANCE WITH 62 PA.C.S. (RELATING TO PROCUREMENT) AND
    19         SECTION 1311. THE DEPARTMENT MAY AWARD CONTRACTS ON A
    20         MULTIPLE-AWARD BASIS AS DESCRIBED IN 62 PA.C.S. § 517
    21         (RELATING TO MULTIPLE AWARDS).
    22             (II)  (A)  IN ORDER TO EFFECTUATE THE PROGRAM
    23             PROMPTLY UPON RECEIPT OF ALL APPLICABLE WAIVERS AND
    24             APPROVALS FROM THE FEDERAL GOVERNMENT, THE DEPARTMENT
    25             MAY AMEND SUCH CONTRACTS AS CURRENTLY EXIST TO
    26             PROVIDE BENEFITS UNDER EITHER THE ADULTBASIC PROGRAM
    27             OR THE PUBLIC WELFARE CODE, OR MAY OTHERWISE PROCURE
    28             SERVICES OUTSIDE OF THE COMPETITIVE PROCUREMENT
    29             PROCESS OF 62 PA.C.S.
    30                 (B)  THIS SUBPARAGRAPH SHALL EXPIRE AT SUCH TIME
    20070S1137B1827                 - 60 -     

     1             AS THERE ARE EFFECTIVE CONTRACTS AWARDED UNDER THIS
     2             SECTION IN EVERY COUNTY OF THIS COMMONWEALTH, BUT NOT
     3             LATER THAN 18 MONTHS AFTER THE EFFECTIVE DATE OF THIS
     4             SECTION.
     5         (3)  SUBJECT TO FEDERAL REQUIREMENTS, IMPOSE REASONABLE
     6     COST-SHARING ARRANGEMENTS AND ENCOURAGE APPROPRIATE USE BY
     7     CONTRACTORS OF COST-EFFECTIVE HEALTH CARE PROVIDERS WHO WILL
     8     PROVIDE QUALITY HEALTH CARE BY ESTABLISHING AND ADJUSTING
     9     COPAYMENTS TO BE INCORPORATED INTO THE PROGRAM BY
    10     CONTRACTORS. THE DEPARTMENT SHALL FORWARD CHANGES OF
    11     COPAYMENTS TO THE LEGISLATIVE REFERENCE BUREAU FOR
    12     PUBLICATION AS NOTICES IN THE PENNSYLVANIA BULLETIN. THE
    13     CHANGES SHALL BE IMPLEMENTED BY CONTRACTORS AS SOON AS
    14     PRACTICABLE FOLLOWING PUBLICATION, BUT IN NO EVENT MORE THAN
    15     120 DAYS FOLLOWING PUBLICATION.
    16         (4)  IN CONSULTATION WITH OTHER APPROPRIATE COMMONWEALTH
    17     AGENCIES, CONDUCT MONITORING AND OVERSIGHT OF CONTRACTS
    18     ENTERED INTO WITH CONTRACTORS.
    19         (5)  IN CONSULTATION WITH OTHER APPROPRIATE COMMONWEALTH
    20     AGENCIES, MONITOR, REVIEW AND EVALUATE THE ADEQUACY,
    21     ACCESSIBILITY AND AVAILABILITY OF SERVICES DELIVERED TO
    22     ELIGIBLE ADULTS OR ELIGIBLE EMPLOYEES.
    23         (6)  IN CONSULTATION WITH OTHER APPROPRIATE COMMONWEALTH
    24     AGENCIES, ESTABLISH AND COORDINATE THE DEVELOPMENT,
    25     IMPLEMENTATION AND SUPERVISION OF AN OUTREACH PLAN TO ENSURE
    26     THAT ALL THOSE WHO MAY BE ELIGIBLE ARE AWARE OF THE PROGRAM.
    27     THE OUTREACH PLAN SHALL INCLUDE PROVISIONS FOR:
    28             (I)  REACHING SPECIAL POPULATIONS, INCLUDING NONWHITE
    29         AND NON-ENGLISH SPEAKING INDIVIDUALS AND INDIVIDUALS WITH
    30         DISABILITIES.
    20070S1137B1827                 - 61 -     

     1             (II)  REACHING DIFFERENT GEOGRAPHIC AREAS, INCLUDING
     2         RURAL AND INNER-CITY AREAS.
     3             (III)  ASSURING THAT SPECIAL EFFORTS ARE COORDINATED
     4         WITHIN THE OVERALL OUTREACH ACTIVITIES THROUGHOUT THIS
     5         COMMONWEALTH.
     6         (7)  AT THE REQUEST OF AN ELIGIBLE ADULT, ELIGIBLE
     7     EMPLOYEE OR ELIGIBLE EMPLOYER, FACILITATE THE PAYMENT ON A
     8     PRETAX BASIS OF PREMIUMS:
     9             (I)  FOR THE PROGRAM AND DEPENDENTS COVERED UNDER THE
    10         PROGRAM; OR
    11             (II)  IF APPLICABLE, FOR THE CHILDREN'S HEALTH
    12         INSURANCE PROGRAM.
    13         (8)  ESTABLISH PENALTIES FOR ELIGIBLE ADULTS, ELIGIBLE
    14     EMPLOYEES OR ELIGIBLE EMPLOYERS WHO ENROLL IN THE PROGRAM,
    15     DROP ENROLLMENT AND SUBSEQUENTLY RE-ENROLL FOR THE PURPOSE OF
    16     AVOIDING THE ONGOING PAYMENT OF PREMIUMS. THE COMMISSIONER
    17     SHALL FORWARD NOTICE OF THESE PENALTIES TO THE LEGISLATIVE
    18     REFERENCE BUREAU FOR PUBLICATION AS A NOTICE IN THE
    19     PENNSYLVANIA BULLETIN.
    20         (9)  COORDINATE WITH THE DEPARTMENT OF PUBLIC WELFARE IN
    21     THE IMPLEMENTATION OF THIS CHAPTER AND MAY DESIGNATE THE
    22     DEPARTMENT OF PUBLIC WELFARE TO PERFORM ANY DUTIES THAT ARE
    23     APPROPRIATE UNDER THIS CHAPTER.
    24  SECTION 1311.  SUBMISSION OF PROPOSALS AND AWARD OF CONTRACTS.
    25     (A)  CORPORATIONS REQUIRED TO SUBMIT.--EACH PROFESSIONAL
    26  HEALTH SERVICES PLAN CORPORATION AND HOSPITAL PLAN CORPORATION
    27  AND THEIR SUBSIDIARIES AND AFFILIATES DOING BUSINESS IN THIS
    28  COMMONWEALTH SHALL SUBMIT A BID OR PROPOSAL TO THE DEPARTMENT TO
    29  CARRY OUT THE PURPOSES OF THIS SECTION IN THE GEOGRAPHIC AREA
    30  SERVICED BY THE CORPORATION. ALL OTHER INSURERS MAY SUBMIT A BID
    20070S1137B1827                 - 62 -     

     1  OR PROPOSAL TO THE DEPARTMENT TO CARRY OUT THE PURPOSES OF THIS
     2  SECTION.
     3     (B)   REVIEW AND SCORING OF BIDS OR PROPOSALS.--THE
     4  DEPARTMENT SHALL REVIEW AND SCORE THE BIDS OR PROPOSALS ON THE
     5  BASIS OF ALL THE REQUIREMENTS FOR THE PROGRAM. THE DEPARTMENT
     6  MAY INCLUDE OTHER CRITERIA IN THE SOLICITATION AND IN THE
     7  SCORING AND SELECTION OF THE BIDS OR PROPOSALS THAT THE
     8  DEPARTMENT, IN THE EXERCISE OF ITS DUTIES UNDER SECTION 1310,
     9  DEEMS NECESSARY. THE DEPARTMENT SHALL DO ALL OF THE FOLLOWING:
    10         (1)  SELECT, TO THE GREATEST EXTENT PRACTICABLE, OFFERORS
    11     THAT CONTRACT WITH HEALTH CARE PROVIDERS TO PROVIDE HEALTH
    12     CARE SERVICES ON A COST-EFFECTIVE BASIS. THE DEPARTMENT SHALL
    13     SELECT OFFERORS THAT USE APPROPRIATE COST-MANAGEMENT METHODS,
    14     INCLUDING THE CHRONIC CARE AND PREVENTION MEASURES, WHICH
    15     WILL ENABLE THE PROGRAM TO PROVIDE COVERAGE TO THE MAXIMUM
    16     NUMBER OF ENROLLEES.
    17         (2)  SELECT, TO THE GREATEST EXTENT PRACTICABLE, ONLY
    18     OFFERORS THAT COMPLY WITH ALL PROCEDURES RELATING TO
    19     COORDINATION OF BENEFITS AS REQUIRED BY THE DEPARTMENT AND
    20     THE DEPARTMENT OF PUBLIC WELFARE.
    21     (C)  CONTRACT TERMS.--CONTRACTS MAY BE FOR AN INITIAL TERM OF
    22  UP TO FIVE YEARS, WITH OPTIONS TO EXTEND FOR FIVE ONE-YEAR
    23  PERIODS.
    24     (D)  DUTIES OF CONTRACTORS.--A CONTRACTOR THAT CONTRACTS WITH
    25  THE DEPARTMENT TO PROVIDE A HEALTH BENEFIT PLAN TO ELIGIBLE
    26  ADULTS OR ELIGIBLE EMPLOYEES:
    27         (1)  SHALL PROCESS CLAIMS FOR THE COVERAGE.
    28         (2)  MAY NOT DENY COVERAGE TO AN ELIGIBLE ADULT OR
    29     ELIGIBLE EMPLOYEE WHO HAS BEEN APPROVED BY THE DEPARTMENT TO
    30     PARTICIPATE IN THE PROGRAM.
    20070S1137B1827                 - 63 -     

     1  SECTION 1312.  RATES AND CHARGES.
     2     (A)  MEDICAL LOSS RATIO.--THE MEDICAL LOSS RATIO FOR A
     3  CONTRACT SHALL BE NOT LESS THAN 85%.
     4     (B)  LIMITATION ON FEES.--NO ELIGIBLE ADULT OR ELIGIBLE
     5  EMPLOYEE SHALL BE CHARGED A FEE, OTHER THAN THOSE SPECIFIED IN
     6  THIS CHAPTER, AS A REQUIREMENT FOR PARTICIPATING IN THE PROGRAM.
     7  SECTION 1313.  HEALTH BENEFIT PLAN.
     8     (A)  BENEFITS.--THE HEALTH BENEFIT PLAN TO BE OFFERED UNDER
     9  THE PROGRAM SHALL BE OF THE SCOPE AND DURATION AS THE DEPARTMENT
    10  DETERMINES AND SHALL PROVIDE FOR ALL OF THE FOLLOWING, WHICH MAY
    11  BE AS LIMITED OR UNLIMITED AS THE DEPARTMENT MAY DETERMINE:
    12         (1)  PRELIMINARY AND ANNUAL HEALTH ASSESSMENTS.
    13         (2)  EMERGENCY CARE.
    14         (3)  INPATIENT AND OUTPATIENT CARE.
    15         (4)  PRESCRIPTION DRUGS, MEDICAL SUPPLIES AND EQUIPMENT.
    16         (5)  EMERGENCY DENTAL CARE.
    17         (6)  MATERNITY CARE.
    18         (7)  SKILLED NURSING.
    19         (8)  HOME HEALTH AND HOSPICE CARE.
    20         (9)  CHRONIC DISEASE MANAGEMENT.
    21         (10)  PREVENTIVE AND WELLNESS CARE.
    22         (11)  INPATIENT AND OUTPATIENT BEHAVIORAL HEALTH
    23     SERVICES.
    24     (B)  COMMONWEALTH ELECTION.--THE COMMONWEALTH MAY ELECT TO
    25  PROVIDE ANY BENEFIT INDEPENDENTLY AND OUTSIDE THE SCOPE OF THE
    26  PROGRAM CONTRACTS.
    27     (C)  ENROLLMENT.--ENROLLMENT IN THE PROGRAM MAY NOT BE
    28  PROHIBITED BASED UPON A PREEXISTING CONDITION, NOR MAY A PROGRAM
    29  HEALTH BENEFIT PLAN EXCLUDE A DIAGNOSIS OR TREATMENT FOR A
    30  CONDITION BASED UPON ITS PREEXISTENCE.
    20070S1137B1827                 - 64 -     

     1     (D)  COPAYMENTS.--THE DEPARTMENT MAY ESTABLISH A COPAYMENT
     2  FOR ANY OF THE SERVICES PROVIDED IN THE HEALTH BENEFIT PLAN AS
     3  LONG AS THE COPAYMENT MEETS ANY FEDERAL REQUIREMENTS UNDER
     4  SECTION 1317. THE DEPARTMENT SHALL FORWARD NOTICE OF THE
     5  COPAYMENT AMOUNTS TO THE LEGISLATIVE REFERENCE BUREAU FOR
     6  PUBLICATION AS A NOTICE IN THE PENNSYLVANIA BULLETIN.
     7  SECTION 1314.  DATA MATCHING.
     8     (A)  COVERED INDIVIDUALS.--ALL ENTITIES PROVIDING HEALTH
     9  INSURANCE OR HEALTH CARE COVERAGE WITHIN THIS COMMONWEALTH
    10  SHALL, NOT LESS FREQUENTLY THAN ONCE EVERY MONTH, PROVIDE THE
    11  NAMES, IDENTIFYING INFORMATION AND ANY ADDITIONAL INFORMATION ON
    12  COVERAGE AND BENEFITS AS THE DEPARTMENT MAY SPECIFY FOR ALL
    13  INDIVIDUALS FOR WHOM THE ENTITIES PROVIDE INSURANCE OR COVERAGE.
    14     (B)  USE OF INFORMATION.--
    15         (1)  THE DEPARTMENT SHALL USE INFORMATION OBTAINED IN
    16     SUBSECTION (A) TO DETERMINE WHETHER ANY PORTION OF AN
    17     ELIGIBLE ADULT'S, ELIGIBLE EMPLOYEE'S OR ELIGIBLE EMPLOYER'S
    18     PREMIUM IS BEING PAID FROM ANY OTHER SOURCE AND TO DETERMINE
    19     WHETHER ANOTHER ENTITY HAS PRIMARY LIABILITY FOR ANY HEALTH
    20     CARE CLAIMS PAID UNDER ANY PROGRAM ADMINISTERED BY THE
    21     DEPARTMENT.
    22         (2)  IF A DETERMINATION IS MADE THAT AN ELIGIBLE ADULT'S,
    23     ELIGIBLE EMPLOYEE'S OR ELIGIBLE EMPLOYER'S PREMIUM IS BEING
    24     PAID FROM ANOTHER SOURCE, THE DEPARTMENT MAY NOT MAKE ANY
    25     ADDITIONAL PAYMENTS TO THE INSURER FOR THE ELIGIBLE ADULT,
    26     ELIGIBLE EMPLOYEE OR ELIGIBLE EMPLOYER.
    27     (C)  EXCESS PAYMENT.--IF A PAYMENT HAS BEEN MADE TO AN
    28  INSURER BY THE DEPARTMENT FOR AN ELIGIBLE ADULT, ELIGIBLE
    29  EMPLOYEE OR ELIGIBLE EMPLOYER FOR WHOM ANY PORTION OF THE
    30  PREMIUM PAID BY THE DEPARTMENT IS BEING PAID FROM ANOTHER
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     1  SOURCE, THE INSURER SHALL REIMBURSE THE DEPARTMENT THE AMOUNT OF
     2  ANY EXCESS PAYMENT OR PAYMENTS.
     3     (D)  REIMBURSEMENT.--THE DEPARTMENT MAY SEEK REIMBURSEMENT
     4  FROM AN ENTITY THAT PROVIDES HEALTH INSURANCE OR HEALTH CARE
     5  COVERAGE THAT IS PRIMARY TO THE COVERAGE PROVIDED UNDER ANY
     6  PROGRAM ADMINISTERED BY THE DEPARTMENT.
     7     (E)  TIMELINESS.--TO THE MAXIMUM EXTENT PERMITTED BY LAW AND
     8  NOTWITHSTANDING ANY POLICY OR PLAN PROVISION TO THE CONTRARY, A
     9  CLAIM BY THE DEPARTMENT FOR REIMBURSEMENT UNDER SUBSECTION (C)
    10  OR (D) SHALL BE DEEMED TIMELY FILED IF IT IS FILED WITH THE
    11  INSURER OR ENTITY WITHIN THREE YEARS FOLLOWING THE DATE OF
    12  PAYMENT.
    13     (F)  AGREEMENTS.--THE DEPARTMENT MAY ENTER INTO AGREEMENTS
    14  WITH ENTITIES THAT PROVIDE HEALTH INSURANCE AND HEALTH CARE
    15  COVERAGE FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS OF THIS
    16  SECTION. THE AGREEMENTS SHALL PROVIDE FOR THE ELECTRONIC
    17  EXCHANGE OF DATA BETWEEN THE PARTIES AT A MUTUALLY AGREED UPON
    18  FREQUENCY, BUT NOT LESS THAN MONTHLY, AND MAY ALSO ALLOW FOR
    19  PAYMENT OF A FEE BY THE DEPARTMENT TO THE ENTITY PROVIDING
    20  HEALTH INSURANCE OR HEALTH CARE COVERAGE.
    21     (G)  OTHER COVERAGE.--
    22         (1)  THE DEPARTMENT SHALL DETERMINE WHETHER ANY OTHER
    23     HEALTH CARE COVERAGE IS AVAILABLE TO AN ELIGIBLE ADULT,
    24     ELIGIBLE EMPLOYEE OR ELIGIBLE EMPLOYER THROUGH AN ALIMONY
    25     AGREEMENT OR AN EMPLOYMENT-RELATED OR OTHER GROUP BASIS.
    26         (2)  IF OTHER HEALTH CARE COVERAGE IS AVAILABLE, THE
    27     DEPARTMENT SHALL REEVALUATE THE ENROLLEE'S ELIGIBILITY UNDER
    28     THIS CHAPTER.
    29     (H)  PENALTY.--
    30         (1)  THE DEPARTMENT MAY IMPOSE A PENALTY OF UP TO $1,000
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     1     PER VIOLATION ON ANY INSURER THAT FAILS TO COMPLY WITH THE
     2     OBLIGATIONS IMPOSED BY THIS CHAPTER.
     3         (2)  ALL MONEYS COLLECTED UNDER THIS SUBSECTION SHALL BE
     4     DEPOSITED INTO THE FUND.
     5  SECTION 1315.  ENTITLEMENTS AND CLAIMS.
     6     NOTHING IN THIS CHAPTER SHALL BE CONSTRUED AS AN ENTITLEMENT
     7  DERIVED FROM THE COMMONWEALTH OR A CLAIM ON ANY FUNDS OF THE
     8  COMMONWEALTH. THE DEPARTMENT OF PUBLIC WELFARE, IN CONJUNCTION
     9  WITH THE DEPARTMENT, SHALL ESTABLISH A WAITING LIST AND STATE
    10  PLAN AMENDMENTS AND REVISIONS TO FEDERAL WAIVERS AS ARE
    11  NECESSARY TO ENSURE THAT EXPENDITURES IN THE PROGRAM DO NOT
    12  EXCEED AVAILABLE FUNDING.
    13  SECTION 1316.  REGULATIONS.
    14     THE DEPARTMENT MAY PROMULGATE REGULATIONS FOR THE
    15  IMPLEMENTATION AND ADMINISTRATION OF THIS CHAPTER.
    16  SECTION 1317.  FEDERAL WAIVERS.
    17         (1)  THE DEPARTMENT OF PUBLIC WELFARE, IN COOPERATION
    18     WITH THE DEPARTMENT, SHALL APPLY FOR ALL APPLICABLE WAIVERS
    19     FROM THE FEDERAL GOVERNMENT AND SHALL SEEK APPROVAL TO AMEND
    20     THE STATE PLAN AS NECESSARY TO CARRY OUT THE PROVISIONS OF
    21     THIS CHAPTER.
    22         (2)  IF THE DEPARTMENT OF PUBLIC WELFARE RECEIVES
    23     APPROVAL OF A WAIVER OR APPROVAL OF A STATE PLAN AMENDMENT AS
    24     REQUIRED BY THIS SECTION, IT SHALL NOTIFY THE DEPARTMENT AND
    25     TRANSMIT NOTICE OF THE WAIVER OR STATE PLAN AMENDMENT
    26     APPROVALS TO THE LEGISLATIVE REFERENCE BUREAU FOR PUBLICATION
    27     AS A NOTICE IN THE PENNSYLVANIA BULLETIN.
    28         (3)  THE DEPARTMENT MAY CHANGE THE BENEFITS UNDER SECTION
    29     1313 AND THE PREMIUM AND COPAYMENT AMOUNTS PAYABLE UNDER
    30     SECTIONS 1305 AND 1306 AND ELIGIBILITY REQUIREMENTS IN ORDER
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     1     FOR THE PROGRAM TO MEET FEDERAL REQUIREMENTS.
     2  SECTION 1318.  FEDERAL FUNDS.
     3     NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE DEPARTMENT OF
     4  PUBLIC WELFARE, IN COOPERATION WITH THE DEPARTMENT, SHALL TAKE
     5  ANY ACTION NECESSARY TO DO ALL OF THE FOLLOWING:
     6         (1)  ENSURE THE RECEIPT OF FEDERAL FINANCIAL
     7     PARTICIPATION UNDER TITLE XIX OF THE SOCIAL SECURITY ACT (49
     8     STAT. 620, 42 U.S.C. § 1396 ET SEQ.) FOR COVERAGE AND FOR
     9     SERVICES PROVIDED UNDER THIS CHAPTER.
    10         (2)  QUALIFY FOR AVAILABLE FEDERAL FINANCIAL
    11     PARTICIPATION UNDER TITLE XIX OF THE SOCIAL SECURITY ACT.
    12     SECTION 12.  THE INSURANCE DEPARTMENT SHALL PUBLISH A NOTICE
    13  IN THE PENNSYLVANIA BULLETIN WHEN A LAW IS ENACTED THAT PROVIDES
    14  FOR OR DESIGNATES AT LEAST $120,000,000 FOR THE SUPPLEMENTAL
    15  ASSISTANCE AND FUNDING ACCOUNT.
    16     SECTION 13.  REPEALS ARE AS FOLLOWS:
    17         (1)  THE GENERAL ASSEMBLY DECLARES THAT THE REPEAL UNDER
    18     PARAGRAPH (2) IS NECESSARY TO EFFECTUATE THIS ACT.
    19         (2)  CHAPTER 13 OF THE ACT OF JUNE 26, 2001 (P.L.755,
    20     NO.77), KNOWN AS THE TOBACCO SETTLEMENT ACT, IS REPEALED.
    21         (3)  ALL OTHER ACTS AND PARTS OF ACTS ARE REPEALED
    22     INSOFAR AS THEY ARE INCONSISTENT WITH THIS ACT.
    23     SECTION 14.  THE AMENDMENT OF SECTION 712(E) OF THE ACT SHALL
    24  APPLY RETROACTIVELY TO DECEMBER 31, 2007.
    25     SECTION 15.  THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
    26         (1)  THE FOLLOWING PROVISIONS SHALL TAKE EFFECT JULY 1,
    27     2008, OR IMMEDIATELY, WHICHEVER IS LATER:
    28             (I)  THE AMENDMENT OF SECTION 712(E) AND (M) OF THE
    29         ACT.
    30             (II)  THE AMENDMENT OF THE DEFINITION OF "HEALTH CARE
    20070S1137B1827                 - 68 -     

     1         PROVIDER" IN SECTION 1101 OF THE ACT.
     2             (III)  THE AMENDMENT OF SECTION 1112 OF THE ACT.
     3             (IV)  SECTION 12 OF THIS ACT.
     4         (2)  THE REMAINDER OF THIS ACT SHALL TAKE EFFECT UPON
     5     PUBLICATION OF THE NOTICE SPECIFIED UNDER SECTION 12 OF THIS
     6     ACT.
















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