PRINTER'S NO.  2257

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1763

Session of

2011

  

  

INTRODUCED BY MICCARELLI, DiGIROLAMO, HALUSKA, HARKINS, O'NEILL, SWANGER, YOUNGBLOOD AND DAVIDSON, JUNE 29, 2011

  

  

REFERRED TO COMMITTEE ON INSURANCE, JUNE 29, 2011  

  

  

  

AN ACT

  

1

Providing for physician contracts with health insurers.

2

The General Assembly of the Commonwealth of Pennsylvania

3

hereby enacts as follows:

4

Section 1.  Short title.

5

This act shall be known and may be cited as the Fair Health

6

Care Provider Contracting Act.

7

Section 2.  Definitions.

8

The following words and phrases when used in this act shall

9

have the meanings given to them in this section unless the

10

context clearly indicates otherwise:

11

"Capitation."  The payment by a health insurer to physicians,

12

physician groups or physician organizations of a per-member-per-

13

month amount, such as percentage of premium, by which a health

14

insurer transfers to the physicians, physician groups or

15

physician organizations the financial risk for those covered

16

services as set forth in the contract between the health insurer

17

and the physicians, physician groups or physician organizations.

 


1

"CCI."  The Centers for Medicare and Medicaid Services'

2

published list of edits and adjustments that are made to health

3

care providers' claims submitted for services or supplies

4

provided to patients insured under the Federal Medicare program

5

and under other Federal insurance programs.

6

"Clean claim."  A claim for payment for a covered service

7

that has no defect or impropriety. The term does not include a

8

claim from a physician who is under investigation for fraud or

9

abuse regarding that claim.

10

"Clinical information."  Clinical, operative or other medical

11

records and reports kept in the ordinary course of a

12

physician's, physician group's or physician organization's

13

business. The term shall include, where applicable, requested

14

statements of medical necessity.

15

"CMS-1500."  The current health care provider claim form

16

number 1500 created by the Centers for Medicare and Medicaid

17

Services.

18

"Covered services."  With respect to a particular health

19

insurer, a health care benefit that is within the coverage

20

described in the plan documents applicable to an eligible plan

21

member of the health insurer.

22

"CPT," "CPT codes" or "AMA CPT book."  Current medical

23

nomenclature in the publication entitled "CPT Standard Edition,"

24

"CPT Professional Edition," "CPT Assistant" and "Principles of

25

CPT Coding" published by the American Medical Association

26

containing a systematic listing and coding of procedures and

27

services provided to patients by physicians and certain

28

nonphysician health professionals.

29

"CPT conventions."  Rules for the application of codes that

30

go across all sections and subsections of the American Medical

- 2 -

 


1

Association CPT book.

2

"CPT guidelines."  Guidelines set out in the introduction, in

3

the beginning to each of the six major sections, in the

4

subsections and in the code level parenthetic statements and

5

cross references contained in the American Medical Association

6

publication "CPT, Professional Edition." The term shall not

7

include any reference to another publication that is not subject

8

to the existing CPT Editorial Panel process, such as "CPT

9

Assistant" or Principles of CPT coding.

10

"Edit."  A practice or procedure pursuant to which one or

11

more adjustments are made to CPT codes or HCPCS Level II codes

12

included in a claim that results in:

13

(1)  payment being made based on some, but not all, of

14

the CPT codes or HCPCS Level II codes included in the claim;

15

(2)  payment being made based on different CPT codes or

16

HCPCS Level II codes than those included in the claim;

17

(3)  payment for one or more of the CPT codes or HCPCS

18

Level II codes included in the claim being reduced by

19

application of Multiple Procedure Logic;

20

(4)  payment for one or more of the CPT codes or HCPCS

21

Level II codes being denied; or

22

(5)  any combination of the above.

23

"ERISA."  The Employee Retirement Income Security Act of 1974

24

(Public Law 93-406, 88 Stat. 829), as amended, and the rules and

25

regulations promulgated thereunder.

26

"Fully insured plan."  A plan as to which a health insurer

27

assumes all or a majority of health care cost and utilization

28

risk.

29

"HCPCS Level II codes."  Alphanumeric codes used to identify

30

those codes not included in CPT and that are commonly referred

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1

to as Healthcare Common Procedure Coding System Level II codes.

2

"Health insurer."  An entity and its health subsidiaries and

3

affiliates licensed under:

4

(1)  40 Pa.C.S. Ch. 61 (relating to hospital plan

5

corporations); or

6

(2)  40 Pa.C.S. Ch. 63 (relating to professional health

7

services plan corporations).

8

"HIPAA."  The Health Insurance Portability and Accountability

9

Act of 1996 (Public Law 104-191, 110 Stat. 136).

10

"Individually negotiated contract."  A contract pursuant to

11

which the parties to the contract, as a result of negotiation,

12

agreed to one or more modifications to the terms of a health

13

insurer's applicable standard form agreement that:

14

(1)  Substantially modify the standard form agreement.

15

(2)  Are made to individually suit, in whole or in part, the

16

needs of a participating physician, participating physician

17

group or participating physician organization, such as higher

18

or customized rates and other customized payment

19

methodologies.

20

"Most favored nation."  A clause within a health care

21

provider contract that places an obligation on a participating

22

physician, participating physician group or participating

23

physician organization to grant to a health insurer contract

24

terms and conditions that are identical to every other contract

25

negotiated by the participating physician, participating

26

physician group or participating physician organization with

27

another health insurer or third-party payor entity including

28

more advantageous terms for the participating physician,

29

participating physician group or participating physician

30

organization.

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1

"Nonparticipating."  A physician, physician group or

2

physician organization that is not a participating physician,

3

participating physician group or participating physician

4

organization.

5

"Overpayment."  With respect to a claim submitted by or on

6

behalf of a physician, physician group or physician

7

organization, any erroneous or excess payment that a health

8

insurer makes for any reason such as:

9

(1)  payment at an incorrect rate;

10

(2)  duplicate payments for the same physician service;

11

(3)  payment with respect to an individual who was not a

12

plan member on the date the physician provided the physician

13

services that are the subject of the payment; and

14

(4)  payment for any noncovered service.

15

"Participating physician."  A physician who has entered into

16

a valid written contract with a health insurer, or who has

17

agreed pursuant to an arrangement with a physician group,

18

physician organization or other entity which has a valid written

19

contract with a health insurer, to provide covered services to

20

that health insurer's plan members and, where applicable, who

21

meets the health insurer's credentialing requirements during the

22

effective period of the contract. The term term does not include

23

a physician who has entered into an agreement with a rental

24

network.

25

"Participating physician group."  A physician group that has

26

entered into a valid written contract with a health insurer to

27

provide covered services to that health insurer's plan members.

28

"Participating physician organization."  A physician

29

organization that has entered into a valid written contract with

30

a health insurer to provide covered services to that health

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1

insurer's plan members.

2

"Physician."  The term shall have have the same meaning as

3

given to it in section 2 of the act of October 5, 1978

4

(P.L.1109, No.261), known as the Osteopathic Medical Practice

5

Act and section 2 of the act of December 20, 1985 (P.L.417,

6

No.112), known as the Medical Practice Act of 1985.

7

"Physician group."  Two or more physicians, and those

8

claiming by or through them, who practice under a single

9

taxpayer identification number.

10

"Physician organization."  Any association, partnership,

11

corporation or other form of organization, such as independent

12

practice associations and physician hospital organizations, that

13

arranges for care to be provided to plan members by physicians

14

organized under multiple taxpayer identification numbers.

15

"Physician services."  Covered services that a physician

16

provides to a plan member, as specified in applicable agreements

17

with a health insurer or otherwise.

18

"Physician specialty society."  A United States medical

19

specialty society that represents diplomats certified by a board

20

recognized by the American Board of Medical Specialties.

21

"Plan."  A benefit plan through which a plan member obtains

22

health care benefits set forth in pertinent plan documents.

23

"Plan documents."  Documents defining the health care

24

benefits available to a plan member, such as the plan member's

25

summary plan description, certificate of coverage or other

26

applicable coverage document and the terms and conditions under

27

which the benefits are available under the plan.

28

"Plan member."  An individual enrolled in or covered by a

29

plan offered and administered by a health insurer.

30

"Precertification," "precertify" or "precertifies."  The

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1

prior approval by a health insurer that the service or supply is

2

medically necessary and not experimental or investigational.

3

"Product network."  A network of participating physicians

4

who, pursuant to contracts with a health insurer, provide

5

covered services to plan members for one or more products or

6

types of products offered by the health insurer in exchange for

7

a specified type of compensation."

8

"Provider website."  The secure and password-protected online

9

resources for participating physicians to obtain information

10

about a health insurer, its products and policies and other

11

information.

12

"Public website."  The online resources for the public to

13

obtain information about a health insurer, its products and

14

policies and other information.

15

"Self-insured plan."  Any plan other than a fully insured

16

plan.

17

"Significant edit."  An edit that a health insurer reasonably

18

believes, based on its experience with submitted claims, shall

19

cause, on the initial review of submitted claims, the denial of

20

or reduction in payment for a particular CPT code or HCPCS Level

21

II code more than 250 times per year.

22

Section 3.  Availability of fee schedules and scheduled payment

23

dates.

24

The following shall apply:

25

(1)  A health insurer shall develop and implement a plan

26

on the effective date of this section to reasonably permit

27

its participating physician, participating physician group or

28

participating physician organization to view, by CDROM or

29

electronically, at the health insurer's option, on a

30

confidential basis, complete fee information showing the

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1

applicable fee schedule amounts for the participating

2

physician, participating physician group or participating

3

physician organization pursuant to that participating

4

physician's, participating physician group's or participating

5

physician organization's direct written agreement with the

6

health insurer.

7

(2)  A participating physician, participating physician

8

group or participating physician organization may elect to

9

receive a hard copy of the fee schedule in lieu of the

10

foregoing.

11

(3)  The fee schedule information shall be provided by

12

the fee-for-service dollar amount allowable for each CPT code

13

for those CPT codes that a participating physician,

14

participating physician group or participating physician

15

organization in the same specialty typically uses in

16

providing covered services.

17

(4)  A participating physician, participating physician

18

group or participating physician organization may request and

19

the health insurer shall provide the fee-for-service dollar

20

amount allowable for other CPT codes that its participating

21

physician, participating physician group or participating

22

physician organization actually bills the health insurer.

23

(5)  A health insurer may base actual compensation on the

24

health insurer's maximum allowable amount and other contract

25

adjustments.

26

(6)  Each health insurer, upon written request from a

27

participating physician, participating physician group or

28

participating physician organization that, in each case, has

29

entered into a written contract directly with that health

30

insurer shall provide, by hard copy, the fee schedule for up

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1

to 100 CPT codes customarily and routinely used by the

2

participating physician, participating physician group or

3

participating physician organization, as specified by the

4

participating physician, participating physician group or

5

participating physician organization.

6

(7)  Each health insurer shall be obligated to honor only

7

two requests under paragraph (6) made annually by the

8

participating physician, participating physician group or

9

participating physician organization.

10

(8)  Each health insurer shall attempt to include

11

provisions in its agreements with delegated entities that

12

require comparable disclosure.

13

(9)  Each health insurer may not require its

14

participating physicians, participating physician groups or

15

participating physician organizations to provide that health

16

insurer with billing rates as a precondition to that health

17

insurer providing fee information under this section.

18

Section 4.  Reduced precertification requirements.

19

(a)  Posting.--Except as provided under subsection (b), each

20

health insurer shall post to its provider website, on the

21

effective date of this section, those services or supplies for

22

which precertification is routinely required for its products,

23

and shall update the posting to the extent the services or

24

supplies for which precertification is routinely required

25

changes.

26

(b)  Specification of services.--Notwithstanding subsection

27

(a), a health insurer's self-insured plan customers may specify

28

services or supplies for which precertification is required that

29

differ from or are in addition to the services or supplies for

30

which that health insurer routinely requires precertification

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1

for its fully insured plans, and the self-insured plans may

2

contract with a different entity to provide precertification

3

services.

4

(c)  Utilization.--Each health insurer shall propose to its

5

self-insured plan customers that they utilize the health

6

insurer's standard list of services and supplies for which

7

precertification is required.

8

(d)  Customized list.--With a self-insured plan's approval,

9

each health insurer shall post the self-insured plan's

10

customized list of precertification requirements to the health

11

insurer's provider website.

12

Section 5.  Notice of policy and procedure changes.

13

(a)  Written notice.--Each health insurer shall, if it

14

intends to make any material adverse changes in the terms of its

15

contracts, including policies and procedures, with its

16

participating physicians, participating physician groups or

17

participating physician organizations give at least 90 days'

18

written notice to each participating physician, participating

19

physician group or participating physician organization affected

20

thereby with whom the health insurer has directly contracted,

21

except to the extent that a shorter notice period is required to

22

comply with changes in applicable law. The written notice shall

23

reasonably apprise its participating physician, participating

24

physician group or participating physician organization of the

25

changes and the changes shall not become effective before the

26

conclusion of the notice period.

27

(b)  Termination.--If a participating physician,

28

participating physician group or participating physician

29

organization objects to the changes that are subject to the

30

notice, the participating physician, participating physician

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1

group or participating physician organization must, within 30

2

days of the date of the notice, which shall be the date the

3

notice is sent by United States mail, by facsimile, or if the

4

health insurer offers it, electronically at the option of the

5

physician, physician group or physician organization, give

6

written notice to terminate his contract with the health

7

insurer, which shall take effect at the end of the notice period

8

of the material adverse change unless, within 65 days of the

9

date of the original notice of changes, the health insurer gives

10

written notice to the objecting participating physician,

11

participating physician group or participating physician

12

organization that it shall not implement, as to the objecting

13

participating physician, participating physician group or

14

participating physician organization, the material adverse

15

changes to which the participating physician, participating

16

physician group or participating physician organization

17

objected.

18

Section 6.  Disclosure of and commitments concerning claims

19

payment practices.

20

(a)  Payment rules.--Each health insurer agrees that, except

21

for Medicaid, State children's health insurance programs and

22

other similar government programs for low-income persons and for

23

members of State established high risk pools, its automated

24

"bundling" and other claims payment rules shall be consistent in

25

all material respects, for claims submitted by or on behalf of

26

the health insurer's plan members.

27

(b)  Disclosure.--Each health insurer agrees to disclose its

28

significant edits on its provider website on the effective date

29

of this section, or as soon thereafter as practicable.

30

(c)  Update.--Each health insurer shall update its disclosure

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1

of significant edits once per calendar year to reflect changes

2

in the health insurer's significant edits and the health

3

insurer's experience with submitted claims. The health insurer

4

shall promptly disclose newly adopted significant edits. The

5

following shall apply:

6

(1)  On the effective date of this section, or as soon

7

thereafter as practicable, each health insurer shall publish

8

on its provider website, for each commercially available

9

claims editing software product then in use by the health

10

insurer, a list identifying each customized edit added to the

11

standard claims editing software product at the health

12

insurer's request.

13

(2)  On the effective date of this section, a health

14

insurer shall not routinely require submission of clinical

15

information, before or after payment of claims, in connection

16

with that health insurer's adjudication of a physician's

17

claims for payment, except as to claims for unlisted codes,

18

claims to which a modifier 22 is appended, and other limited

19

categories of claims as to which the health insurer

20

determines that routine review of clinical information is

21

appropriate, except that the health insurer shall disclose

22

any of its categories of the nature on its public website and

23

its provider website.

24

(d)  Required submission.--Notwithstanding subsection (c)(2),

25

a health insurer may require submission of clinical information

26

in connection with a health insurer's adjudication of a

27

physician's claims for payment for the purpose of investigating

28

fraudulent or abusive, whether intentional or unintentional,

29

billing practices, but only so long as, and only during the

30

times as, the health insurer has a reasonable basis for

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1

believing that the investigation is warranted.

2

(e)  Contest.--A participating physician may contest any

3

requirement that the participating physician submit clinical

4

information in connection with a health insurer's adjudication

5

of the participating physician's claims for payment for the

6

purpose of investigating fraudulent or abusive, whether

7

intentional or unintentional, billing practices.

8

(f)  Intent.--Nothing under this section is intended or shall

9

be construed to limit a health insurer's right to require

10

submission of clinical information when the requirement is not

11

in connection with a health insurer's adjudication of a

12

physician's claims for payment or is otherwise permitted by this

13

section, such as the right to require submission of clinical

14

information for precertification purposes as consistent with

15

this section.

16

(g)  Publication.--On the effective date of this section,

17

each health insurer shall publish on its provider website those

18

limited code combinations as to which it has determined that

19

particular services or procedures, relative to modifiers 25 and

20

59, are not appropriately reported together with those modifiers

21

and the health insurer's application of the rule differs from

22

CPT codes, except that no determination shall be inconsistent

23

with the undertakings set forth under this section.

24

Section 7.  Dispute resolution process for physician billing

25

disputes.

26

(a)  Establishment.--On the effective date of this section,

27

each of the health insurers shall take actions necessary to

28

establish a billing dispute external review process. The billing

29

dispute external review process shall provide for a billing

30

dispute reviewer to resolve disputes with physicians and

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1

physician groups arising from covered services provided to the

2

health insurer's plan members by the physicians and physician

3

groups concerning:

4

(1)  the health insurer's application of the health

5

insurer's coding and payment rules and methodologies for fee-

6

for-service claims, including, but not limited to, any

7

bundling, downcoding, application of a CPT modifier and other

8

reassignment of a code by the health insurer, to patient-

9

specific factual situations, including, but not limited to,

10

the appropriate payment when two or more CPT codes are billed

11

together or whether a payment-enhancing modifier is

12

appropriate; or

13

(2)  any retained claims, if the retained claims are

14

submitted by the physician to the billing dispute reviewer

15

prior to the later to occur of 90 days after the effective

16

date of this section or 30 days after exhaustion of the

17

health insurer's internal appeals process. Each matter shall

18

be a billing dispute.

19

(b)  Jurisdiction.--The billing dispute reviewer shall not

20

have jurisdiction over any other disputes, such as those

21

disputes that fall within the scope of the external review

22

process set forth under subsection (a), compliance disputes and

23

disputes concerning the scope of covered services, nor shall any

24

billing dispute reviewer have jurisdiction or authority to

25

revise or establish any reimbursement policy of the health

26

insurer.

27

(c)  Intent.--Nothing contained under this section shall be

28

intended, or shall be construed, to supersede, alter or limit

29

the rights or remedies otherwise available to any plan member

30

under section 502(a) of ERISA or to supersede in any respect the

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1

claims procedures for plan members of section 503 of ERISA, or

2

required by applicable Federal or State law or regulation.

3

(d)  Appeal process.--

4

(1)  The physician or physician group must exhaust the

5

health insurer's internal appeals process before submitting a

6

billing dispute to the billing dispute reviewer.

7

(2)  A physician or physician group shall be deemed to

8

have exhausted the health insurer's internal appeals process

9

if the health insurer does not communicate a decision on an

10

internal appeal within 30 days of the health insurer's

11

receipt of all documentation reasonably needed to decide the

12

internal appeal. If the health insurer and physician or

13

physician group disagree as to whether the requirements of

14

this paragraph have been satisfied, the disagreement shall be

15

resolved by the billing dispute reviewer.

16

(e)  Time.--Billing disputes shall be submitted to the

17

billing dispute reviewer no more than 90 days after a physician

18

or physician group exhausts the health insurer's internal

19

appeals process. The billing dispute reviewer shall not hear or

20

decide any billing dispute submitted more than 90 days after the

21

health insurer's internal appeals process has been exhausted.

22

(f)  Documentation.--The health insurer shall supply

23

appropriate documentation to the billing dispute reviewer no

24

later than 30 days after requested by the billing dispute

25

reviewer, which request shall not be made until billing disputes

26

have been submitted with amounts in dispute that in aggregate

27

exceed $500.

28

(g)  Cooperation.--Each health insurer shall cooperate with

29

organized State physician organizations in order to select the

30

persons or organizations that shall serve as the billing dispute

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1

reviewer, on a local or regional basis.

2

Section 8.  All products clauses prohibition.

3

(a)  Capitated fee arrangement.--No health insurer may

4

require a participating physician to participate in a capitated

5

fee arrangement in order to participate in product networks in

6

which such participating physician is compensated on a fee-for-

7

service basis.

8

(b)  Product networks.--No health insurer shall require a

9

participating physician to participate in its Medicare Advantage

10

or Medicaid product networks in order to participate in its

11

commercial product networks.

12

(c)  Participation.--If a participating physician or

13

participating physician group comprised of participating

14

physicians or participating physician organization chooses not

15

to participate in all of the health insurer's product networks

16

or terminates participation in some of the health insurer's

17

product networks, the reimbursement levels offered to or applied

18

by the health insurer to the participating physician or

19

participating physician group or participating physician

20

organization for the product network in which the participating

21

physician or participating physician group or participating

22

physician organization continues to participate shall not be

23

lower than the health insurer's standard reimbursement levels in

24

the geographic market. This subsection shall not apply if a

25

participating physician or participating physician group

26

comprised of participating physicians or participating physician

27

organization has agreed in an individually negotiated contract

28

to participate in more than one product network for a specified

29

period of time, in which case the terms of the individually

30

negotiated contract shall govern.

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1

(d)  Reimbursement level or incentive.--Notwithstanding

2

subsection (c), the health insurer may offer a higher

3

reimbursement level or other incentive to any participating

4

physician, participating physician group or participating

5

physician organization who elects to participate or elects to

6

continue participation in more than one of the health insurer's

7

product networks.

8

(e)  Obligation.--Nothing under this section shall obligate a

9

health insurer to pay more than the lesser of the participating

10

physician's billed charges or the health insurer's applicable

11

fee-for-service amount.

12

Section 9.  Termination without cause.

13

(a)  Written notice.--Unless an individually negotiated

14

contract between a health insurer and a participating physician,

15

participating physician group or participating physician

16

organization specifies a different period of notice, or

17

specifies that the contract may not be terminated except for

18

cause during a defined period of time, either party to a

19

contract between a health insurer and a participating physician,

20

participating physician group or participating physician

21

organization shall have the right to terminate the contract

22

without cause upon prior written notice provided to the other

23

party which notice shall be a definite period set forth in the

24

agreement, which period shall be no less than 60 or more than

25

120 calendar days.

26

(b)  Obligations.--In the event of a contract termination by

27

either party, the following obligations shall apply with respect

28

to the continuation of care for those patients of a

29

participating physician, participating physician group or

30

participating physician organization who are entitled to

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1

continuation of care as reasonably defined under the

2

participating physician's, participating physician group's or

3

participating physician organization's contract with the health

4

insurer or under applicable law:

5

(1)  In the case of a continuation of care situation as

6

described in the introductory paragraph, the participating

7

physician, participating physician group or participating

8

physician organization shall continue to render necessary

9

care to the health insurer's plan member consistent with

10

contractual or legal obligations. If, on notice from the

11

participating physician, participating physician group,

12

participating physician organization or the health insurer's

13

plan member that a plan member is in a continuation of care

14

situation, the health insurer does not use due diligence to

15

make alternative care available to the plan member within 90

16

days after receipt of the notice for continuation of care

17

services provided after termination, the health insurer shall

18

pay to the participating physician, participating physician

19

group or participating physician organization the standard

20

rates paid to nonparticipating physicians for that

21

geographical area.

22

(2)  Notwithstanding paragraph (1), a health insurer's

23

obligations under this section shall not apply to the extent

24

that other participating physicians, participating physician

25

groups or participating physician organizations are not

26

available to replace the termination physician, physician

27

group or physician organization due to:

28

(i)  geographic or travel-time barriers; or

29

(ii)  contractual provisions between the terminating

30

physician, physician group or physician organization and

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1

a facility at which the health insurer's plan member

2

receives care that limits or precludes other

3

participating physicians, participating physician groups

4

or participating physician organizations from rendering

5

replacement services to the health insurer's plan

6

members.

7

Section 10.  Patient-specific issues involving clinical

8

judgment, and medical necessity definition.

9

(a)  Adoption.--Each health insurer shall adopt and apply as

10

to its current agreements and include in its future agreements

11

with participating physicians the definition of "medically

12

necessary" or a comparable term in each agreement. The term

13

shall mean health care services that a physician, exercising

14

prudent clinical judgment, would provide to a patient for the

15

purpose of preventing, evaluating, diagnosing or treating an

16

illness, injury, disease or its symptoms, and that are:

17

(1)  in accordance with generally accepted standards of

18

medical practice;

19

(2)  clinically appropriate, in terms of type, frequency,

20

extent, site and duration, and considered effective for the

21

patient's illness, injury or disease; and

22

(3)  not primarily for the convenience of the patient,

23

physician or other health care provider and not more costly

24

than an alternative service or sequence of services at least

25

as likely to produce equivalent therapeutic or diagnostic

26

results as to the diagnosis or treatment of that patient's

27

illness, injury or disease.

28

(b)  Definition.--As used in this section, the term shall

29

have the meaning given to it in this subsection unless the

30

context clearly indicates otherwise:

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1

"Generally accepted standards of medical practice."

2

Standards that are based on credible scientific evidence

3

published in peer-reviewed medical literature generally

4

recognized by the relevant medical community, physician

5

specialty society recommendations and the views of physicians

6

practicing in relevant clinical areas and any other relevant

7

factors.

8

Section 11.  Policy issues involving clinical judgment.

9

In formulating and adopting medical policies with respect to

10

covered services, each health insurer shall rely on credible

11

scientific evidence published in peer-reviewed medical

12

literature generally recognized by the relevant medical

13

community, and shall continue to make the policies readily

14

available to its plan members and participating physicians via

15

its public website or by other electronic means. In formulating

16

and adopting the policies, each health insurer shall take into

17

account national physician specialty society recommendations and

18

the views of prudent physicians practicing in relevant clinical

19

areas and any other clinically relevant factors.

20

Section 12.  Future consideration by health insurers of an

21

administrative exemption program.

22

(a)  Exemption.--Each health insurer shall consider the

23

feasibility and desirability of exempting certain participating

24

physicians from certain administrative requirements based on

25

criteria such as the participating physician's delivery of

26

quality and cost-effective medical care and accuracy and

27

appropriateness of claims submissions.

28

(b)  Construction.--No health insurer shall be obliged to

29

implement any exemption process, and this section shall not be

30

construed to limit a health insurer's ability to implement any

- 20 -

 


1

program on a pilot or experimental basis, base exemptions on any

2

health insurer determined basis or otherwise to implement one or

3

more programs in only some markets.

4

Section 13.  Timelines for processing and payment of clean

5

claims.

6

Beginning on the effective date of this section, each health

7

insurer shall direct the issuance of a check or an electronic

8

funds transfer in payment for clean claims for covered services

9

within 30 calendar days.

10

Section 14.  No automatic downcoding of evaluation and

11

management claims.

12

(a) Prohibition.--On the effective date of this section, no

13

health insurer shall automatically reassign or reduce the code

14

level of evaluation and management codes billed for covered

15

services, downcoding, except that a health insurer may reassign

16

a new patient visit code to an established patient visit code

17

based solely on CPT codes, CPT guidelines and CPT conventions.

18

(b)  Denial.--Health insurers shall continue to have the

19

right to deny, pend or adjust the claims for covered services on

20

other bases and shall have the right to reassign or reduce the

21

code level for selected claims for covered services or claims

22

for covered services submitted by selected physicians, physician

23

groups or physician organizations, based on a review of the

24

information in the clinical information at the time the service

25

was rendered for the particular claims or a review of

26

information derived from a health insurer's fraud or abuse

27

billing detection programs that create a reasonable belief of

28

fraudulent or abusive, whether intentional or unintentional,

29

billing practices, provided that the decision to reassign or

30

reduce is based primarily on a review of clinical information.

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1

Section 15.  Bundling and other computerized claim editing.

2

(a)  Duties.--Each health insurer shall do all of the

3

following:

4

(1)  Take actions necessary on the health insurer's part

5

to cause the claim-editing software program it uses to

6

continue to produce editing results consistent with the

7

standards set forth in this section.

8

(2)  Process and separately reimburse those codes listed

9

in the American Medical Association CPT book as modifier 51

10

exempt CPT codes without reducing payment under the health

11

insurer's multiple procedure logic, if the American Medical

12

Association CPT book provides that the services are

13

appropriately reported together.

14

(3)  Process and separately reimburse codes listed in the

15

American Medical Association CPT book as add-on billing codes

16

without reducing payment under the health insurer's multiple

17

procedure logic, if the American Medical Association CPT book

18

provides that the add-on CPT codes are appropriately billed

19

with proper primary procedure codes.

20

(b)  Clinical information.--No health insurer shall require

21

physicians to submit clinical information of their patient

22

encounters solely because the physicians seek payment for both

23

surgical procedures and CPT evaluation and management services

24

for the same patient on the same date of service, if the correct

25

CPT evaluation and management code, surgical code and modifier

26

are included on the initial claim submission.

27

(c)  Code recognition.--If a claim contains a CPT code for an

28

evaluation and management service, appended with a CPT modifier

29

25 and a CPT code for performance of a nonevaluation and

30

management service procedure code, both codes shall be

- 22 -

 


1

recognized and separately eligible for payment, unless the

2

clinical information indicates that use of the CPT modifier 25

3

was inappropriate or the health insurer has disclosed, pursuant

4

to the limited number of finite code combinations that are not

5

appropriately reported together.

6

(d)  Payment.--Payment shall only be made for one evaluation

7

and management service for any single day unless payment for

8

more than one is appropriate pursuant to the American Medical

9

Association CPT book and is supported by appropriate diagnoses

10

in the clinical information.

11

(e)  Edits.--Each health insurer shall remove from its claim

12

review and payment systems any edits that generally deny payment

13

for CPT evaluation and management codes with a CPT modifier 25

14

appended when submitted with surgical or other procedure codes

15

for the same patient on the same date of service except for a

16

limited number of exceptions, which shall be disclosed on the

17

health insurer's provider website.

18

(f)  Prohibition.--Nothing in this section shall prohibit a

19

health insurer from requiring use of the appropriate CPT code

20

modifiers for evaluation and management billing codes on the

21

original claim forms, or preclude a health insurer from

22

requiring a physician, physician group or physician organization

23

to submit to an audit of claims submitted by the physician,

24

physician group or physician organization for payment directly

25

to the physician, physician group or physician organization,

26

such as claims for surgical procedures and evaluation and

27

management services on the same date of service submitted with

28

the appropriate modifier, and to provide their clinical

29

information in connection with an audit.

30

(g)  Supervision code.--A CPT code for supervision and

- 23 -

 


1

interpretation or radiologic guidance shall be separately

2

recognized and eligible for payment to the extent that the

3

associated procedure code is recognized and eligible for payment

4

if:

5

(1)  the associated procedure code does not include

6

supervision and interpretation or radiologic guidance

7

according to the American Medical Association CPT book; and

8

(2)  for each procedure, no health insurer shall be

9

required to pay for supervision or interpretation or

10

radiologic guidance by more than one qualified health care

11

professional.

12

(h)  Reassignment.--No health insurer shall reassign any CPT

13

code into any other CPT code or deem a CPT code ineligible for

14

payment based solely on the format of the published CPT

15

descriptions.

16

(i)  Modifier 59 codes.--CPT codes submitted with a modifier

17

59 attached shall be eligible for payment to the extent they

18

follow the American Medical Association CPT book and they

19

designate a distinct or independent procedure performed on the

20

same day by the same physician, but only to the extent that:

21

(1)  although the procedures or services are not normally

22

reported together they are appropriately reported together

23

under the particular presenting circumstances; and

24

(2)  it would not be more appropriate to append any other

25

CPT recognized modifier to such CPT codes.

26

(j)  Global periods.--No global periods for surgical

27

procedures shall be longer than the period then designated by

28

Centers for Medicare and Medicaid Services, except that this

29

limitation shall not restrict a health insurer from establishing

30

a global period for surgical procedures, except where Centers

- 24 -

 


1

for Medicare and Medicaid Services has determined a global

2

period is not appropriate or has identified a global period not

3

associated with a specific number of days.

4

(k)  Automatic change.--No health insurer shall automatically

5

change a CPT code to one reflecting a reduced intensity of the

6

service when the CPT code is one among or across a series that

7

includes without limitation CPT codes that differentiate among

8

simple, intermediate and complex, complete or limited, and size.

9

Section 16.  Overpayment recovery procedures.

10

(a)  Time limit.--Except as provided under subsection (b), no

11

health insurer shall initiate overpayment recovery efforts more

12

than 18 months after the payment was received by the physician,

13

except that no time limit shall apply to the initiation of

14

overpayment recovery efforts:

15

(1)  based on a reasonable belief of fraud or other

16

intentional misconduct;

17

(2)  required by a self-insured plan; or

18

(3)  required by a Federal or State program.

19

(b)  Underpayment.--Notwithstanding subsection (a), if a

20

physician asserts a claim of underpayment, a health insurer may

21

defend or set off a claim based on overpayments going back in

22

time as far as the claimed underpayment.

23

(c)  Appeal.--If a physician requests an appeal within 30

24

days of receipt of a request for repayment of an overpayment, no

25

health insurer shall require the physician to repay the alleged

26

overpayment before such appeal is concluded.

27

(d)  Limitation.--Nothing under this section shall be deemed

28

to limit a health insurer's right to pursue recovery of

29

overpayments that occurred prior to the effective date of this

30

section where the health insurer has provided the physician with

- 25 -

 


1

notice of the recovery efforts prior to the effective date of

2

this section.

3

Section 17.  Effect of health insurer confirmation of patient

4

procedure medical necessity.

5

(a)  Revocation.--If the health insurer certifies or

6

precertifies, approves or preapproves that a proposed service is

7

medically necessary for one of its plan members, the health

8

insurer shall not subsequently revoke that medical necessity

9

determination absent evidence of fraud, evidence that the

10

information submitted was materially erroneous or incomplete or

11

evidence of material change in that plan member's health

12

condition between the date that the certification or

13

precertification was provided and the date of the service that

14

makes the proposed service no longer medically necessary for the

15

plan member.

16

(b)  New request.--If a health insurer certifies or

17

precertifies the medical necessity of a course of treatment

18

limited by number, time period or otherwise, a request for

19

services beyond the certified course of treatment shall be

20

deemed to be a new request and that health insurer's denial of

21

such request shall not be deemed to be inconsistent with this

22

section.

23

Section 18.  Gag clauses.

24

(a)  Exchange of information.--No health insurer shall

25

include in its contracts with participating physicians,

26

participating physician groups or participating physician

27

organizations any provision limiting:

28

(1)  The free, open and unrestricted exchange of

29

information between its physicians and its plan members

30

regarding the nature of the plan member's medical conditions

- 26 -

 


1

or treatment and provider options and the relative risks and

2

benefits and costs to the plan member of the options.

3

(2)  Whether or not the treatment is covered under the

4

plan member's plan.

5

(3)  Any right to appeal any adverse decision by the

6

health insurer regarding coverage of treatment that has been

7

recommended or rendered.

8

(b)  Penalty.--A health insurer shall not penalize or

9

sanction participating physicians in any way for engaging in any

10

free, open and unrestricted communication with a plan member

11

with respect to the foregoing subjects or for advocating for any

12

service on behalf of a plan member.

13

Section 19.  Arbitration.

14

(a)  Refund.--With respect to any arbitration proceeding

15

between a health insurer and its participating physician who

16

practices individually or in a participating physician group of

17

fewer than six physicians, the health insurer agrees that it

18

shall refund any applicable filing fees and arbitrators' fees

19

paid by the physician if the physician is the prevailing party

20

with respect to the arbitration proceeding. This subsection

21

shall not apply to any arbitration proceeding in which the

22

participating physician purports to represent any physician

23

outside of his or her physician group.

24

(b)  Prohibited language.--No health insurer shall include

25

any of the following language in any agreement with a physician,

26

physician group or physician organization:

27

(1)  requiring that any arbitration panel have multiple

28

members;

29

(2)  preventing the recovery of any statutory or

30

otherwise legally available damages or other relief in an

- 27 -

 


1

arbitration proceeding;

2

(3)  restricting the statutory or otherwise legally

3

available scope or standard of review;

4

(4)  completely prohibiting discovery;

5

(5)  shortening any statute of limitations; or

6

(6)  requiring that any arbitration proceeding occur more

7

than 50 miles from the principal office of the physician,

8

physician group or physician organization.

9

Section 20.  Most favored nations clauses.

10

A health insurer shall not include any "most favored nations"

11

clauses in its contracts with participating physicians,

12

participating physician groups and participating physician

13

organizations, except for individually negotiated contracts.

14

Section 21.  Enforcement by the court.

15

Upon adjudication of both internal and external review

16

processes, if a health insurer has not complied with this

17

section, a physician may challenge this assertion by initiating

18

a claim in a court of competent jurisdiction.

19

Section 40.  Effective date.

20

This act shall take effect immediately.

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