THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY YAW, RAFFERTY, ERICKSON, SCHWANK, GREENLEAF, MENSCH AND EARLL, OCTOBER 18, 2011

REFERRED TO BANKING AND INSURANCE, OCTOBER 18, 2011  

AN ACT

Providing for credentialing of physicians by health insurers,

for physician payment during credentialing process and for

the powers and duties of the Department of Health;

establishing a private right of action; and prescribing

administrative fines. 

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

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

Insurer Physician Credentialing Act.

Section 2.  Declaration of policy.

The General Assembly finds and declares as follows:

(1)  An equitable and expeditious initial physician

credentialing process is essential to the financial stability

of this Commonwealth's health insurers and health care

providers and ultimately to the well-being of patients and

consumers by ensuring access to health care services.

(2)  This act is intended to promote fairness to this

Commonwealth's health care providers by ensuring that health

insurers conduct physician credentialing in a reasonable time

frame and reimburse physicians during the credentialing

process.

(3)  This act is a necessary and proper exercise of the

authority of the Commonwealth to protect the public health

and to regulate the business of insurance and the practice of

medicine.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Council."  The Council for Affordable Quality Health Care or

a successor entity that is a nonprofit alliance of health plans

and trade associations facilitating administrative health care

information exchange.

"Department."  The Department of Health of the Commonwealth.

"Enrollee."  A policyholder, subscriber, covered person,

covered dependent, spouse or other person who is entitled to

receive health care benefits from a health insurer.

"Health insurer."  An entity that contracts or offers to

contract to provide, deliver, arrange for, pay for or reimburse

any of the costs of health care services in exchange for a

premium, including an entity licensed under any of the

following:

(1)  The act of May 17, 1921 (P.L.682, No.284), known as

The Insurance Company Law of 1921, including section 630 and

Article XXIV.

(2)  The act of December 29, 1972 (P.L.1701, No.364),

known as the Health Maintenance Organization Act.

(3)  40 Pa.C.S. Ch. 61 (relating to hospital plan

corporations).

(4)  40 Pa.C.S. Ch. 63 (relating to professional health

services plan corporations).

"Hospital-based physician."  A physician who provides

clinical support within a hospital. The term includes, but is

not limited to, an anesthesiologist, pathologist, radiologist,

neonatologist, hospitalist and emergency room physician.

"Participating provider."  A physician who enters into a

provider contract with a health insurer and is on the health

insurer's physician provider panel.

"Physician provider panel."  A group of physicians who

contract either directly or through a subcontracting entity with

a health insurer to provide health care services to the health

plan's enrollees under the health plan's health benefit plan.

Section 4.  Initial physician credentialing.

(a)  General rule.--A health insurer and physician shall

adhere to the following minimum standards to facilitate the

initial physician credentialing process:

(1)  A physician who seeks to participate on a physician

provider panel of a health insurer must submit an application

to the health insurer.

(2)  A health insurer shall complete the credentialing

process for all initial physician credentialing applications

submitted by or on behalf of a physician applicant within 60

days of receipt of a complete application. An application

shall be considered complete for the purpose of this act if:

(i)  the application is submitted through the

council's electronic process described under section 6;

or

(ii)  the physician materially completes responses to

each question on the application and each of the

following requirements are satisfied or submitted:

(A)  the application form is signed and

appropriately dated by the physician applicant;

(B)  a current curriculum vitae or work/education

history;

(C)  copies of the physician applicant's current

licenses in all states in which the physician holds a

license, regardless of the address on the licenses;

(D)  a copy of the physician applicant's current

Drug Enforcement Administration controlled substance

certificate, regardless of the address on the

certificate; and

(E)  a copy of the physician applicant's current

malpractice face sheet coverage statement, including

amounts and dates of coverage, regardless of the

current or future dates of coverage.

(3)  If a physician applicant is board eligible, the

health insurer may request documentation of board

certification or eligibility. Absence of this documentation

shall not restrict the application from being considered

complete for the purpose of this act.

(4)  The health insurer shall report to a physician

applicant, at the address provided in the initial

credentialing application, the status of a submitted initial

physician credentialing application within five business days

from the date of receipt by the health insurer. The report

shall include, but not be limited to, the health insurer's

intent to continue to process the physician's application,

application receipt date, next meeting date of the health

plan's credentialing review committee at which the

application will be considered and, if the application is

incomplete because it does not satisfy the minimum

requirements established in paragraph (2), an itemization of

all missing or incomplete items. After the health insurer

receives the completed application in accordance with

paragraph (2), the health insurer shall be subject to the

time periods established in paragraph (2).

(5)  The failure of a health insurer to provide the

report required under paragraph (4) is a violation of this

act, and the health insurer shall be subject to the

provisions of and penalties provided under section 7.

(6)  A health insurer shall notify a physician applicant

of the health insurer's decision on an initial credentialing

application within five business days of the decision. The

notice shall include the committee's decision, the decision

date and, if not favorable to the applicant, the rationale

for the decision.

(b)  Inapplicability.--

(1)  The credentialing and recredentialing by health

insurers of hospital-based physicians, unless the hospital-

based physician maintains a medical practice independent of

the hospital with which the physician contracts.

(2)  The credentialing and recredentialing functions that

have been delegated to other entities by the health plan.

Section 5.  Physician payment during credentialing process.

(1)  A physician applicant notified by a health insurer

of the health insurer's intent to pursue the credentialing

process in accordance with section 4(a)(4) shall be eligible

for reimbursement within 15 calendar days from the postmarked

date on the physician's application.

(2)  The health insurer shall reimburse the physician

based upon the health insurer's fee schedule rates applicable

to nonparticipating physicians. Reimbursement shall be paid

by the health insurer to the physician at the health

insurer's nonparticipating physician rate for services

rendered from the date that appears on the health insurer

notice to the physician as required under section 4(a)(4)

through and including the date the health insurer sends the

required notice under section 4(a)(6).

(3)  A physician applicant who contracts with a medical

group practice and who receives the notification from a

health insurer pursuant to section 4(a)(4) shall be eligible

to receive reimbursement at the medical group's actual

contracted rate for claims paid to the physician's contracted

medical group practice within 15 calendar days from the

postmarked date on the physician's application if:

(i)  The physician is employed by or is a member of

the participating group practice.

(ii)  The physician has applied for acceptance on the

health insurer's participating provider panel.

(iii)  The physician has a valid license issued by

the State Board of Medicine or the State Board of

Osteopathic Medicine.

(iv)  The physician has proof of valid professional

liability insurance coverage.

(4)  A health insurer that sends written notice rejecting

the physician's credentialing application pursuant to section

4(a)(6) shall not be under any obligation to provide any

reimbursement to the physician applicant unless the physician

subsequently becomes credentialed.

(5)  A health insurer may not deny payment to a physician

under this section solely because the physician was not a

participating provider at the time the services were provided

to an enrollee.

(6)  A physician who is not a participating provider of a

health insurer and whose group practice is eligible for

reimbursement under paragraph (2) may not hold an enrollee of

the health insurer liable for the cost of any covered

services provided to the enrollee during the time period

described in section 4(a)(2), except for any noncovered

service, deductible, copayment or coinsurance amount owed by

the enrollee to the group practice or physician under the

terms of the enrollee's contract or certificate.

(7)  A group practice may disclose in writing to an

enrollee at the time services are provided that:

(i)  The treating physician is not a participating

provider.

(ii)  The treating physician has applied to become a

participating provider.

(iii)  The health insurer has not completed its

assessment of the credentials of the treating physician

to provide services as a participating provider.

(8)  The disclosure process may continue until the

credentialing process is complete as described in section

4(a)(6).

(9)  A health plan may assign individual provider numbers

to physicians for their internal use, but the assignment of

such numbers shall not be a prerequisite for processing and

paying claims. The physician's National Provider Identifier

(NPI) number shall suffice as the individual provider

identifier required to process and pay claims.

Section 6.  Alternative submission.

A health insurer shall be required to accept an application

developed by the council when submitted by a physician for

participation in the health insurer's provider panel.

Section 7.  Private right of action.

(a)  General rule.--A physician aggrieved by a health

insurer's violation of this act shall have a private right of

action in a court of competent jurisdiction to secure all

available remedies at law and in equity to remedy the health

insurer's violation.

(b)  Administrative penalty.--In addition to any other remedy

available at law or in equity, the Insurance Department shall

assess an administrative penalty for a violation of this act

following notice and an opportunity to be heard. The penalty

shall not exceed $5,000 per violation.

Section 8.  Severability.

The provisions of this act are severable. If any provision of

this act or its application to any person or circumstance is

held invalid, the invalidity shall not affect other provisions

or applications of this act which can be given effect without

the invalid provision or application.

Section 9.  Appeals.

A physician applicant has the right to appeal any rejection

by the health insurer subsequent to receipt of the rejection

letter sent by the insurer pursuant to section 4(a)(6) as

follows:

(1)  The physician's right to repeal a rejection by the

health insurer shall be limited to the following

circumstances:

(i)  The health insurer rejected the physician's

application because the physician discussed with a

patient or any person:

(A)  the process that the health insurer uses or

proposes to use to deny payment for a health care

service;

(B)  medically necessary and appropriate care

with or on behalf of a patient, including information

regarding the nature of treatment, risks of

treatment, alternative treatments or the availability

of alternative therapies, consultation or tests; or

(C)  the decision of any health insurer to deny

payment for a health care service;

(ii)  the physician applicant has a practice or

intends to join a medical group practice that includes a

substantial number of patients with expensive medical

conditions; or

(iii)  the physician objects to the provision of or

refuses to provide a health care service on moral or

religious grounds.

(2)  Within 45 days of receipt of a denial letter by the

health insurer rejecting a physician's enrollment

application, a physician applicant or designee may file an

appeal to the Secretary of Health. The Secretary of Health

shall have 45 days to make a final determination regarding

the physician applicant's credentialing status and

participation as a network provider based upon the standards

specified in paragraph (1). The Secretary of Health shall

send notification of the decision by certified mail to the

physician applicant or designee and the health insurer within

45 days of receipt of the appeal letter.

Section 10.  Rules and regulations.

The department shall promulgate rules and regulations to

administer and enforce this act.

Section 11.  Repeals.

All acts and parts of acts are repealed insofar as they are

inconsistent with this act.

Section 12.  Effective date.

This act shall take effect in 60 days.