1Requiring physician practices operating as part of an integrated
2delivery network to meet certain requirements to ensure
3patient access and consumer choice; and imposing powers and
4duties on the Insurance Department.

5The General Assembly of the Commonwealth of Pennsylvania
6hereby enacts as follows:

7Section 1. Short title.

8This act shall be known and may be cited as the Patient
9Access and Consumer Choice Act.

10Section 2. Legislative findings.

11 The General Assembly finds and declares as follows:

12(1) Beginning in the 1990s, a new trend in hospital
13mergers and consolidations began and public sources currently
14estimate that there have been over 300 such hospital mergers
15since 2007.

16(2) These hospitals consolidate and merge by either
17affiliating with other independent hospitals or purchasing

1independent physician practices.

2(3) Hospital and physician consolidation has the
3potential to increase the cost of health care to consumers by
4limiting competition and thereby giving hospitals and
5physician practices greater negotiating strength resulting in
6higher prices for patients and little incentive to improve
7the quality of care delivered.

8(4) Research conducted by government agencies, academics
9and others conclude that increasing provider consolidation
10has the potential to increase health care costs.

11(5) The Commonwealth has a duty to protect consumer
12interests.

13(6) Hospitals and physician practices that also operate
14as an integrated delivery network are able to exert
15additional market dominance as they can set rates for both
16payment and reimbursement.

17(7) To ensure that physician practices operating as part
18of an integrated delivery network are not permitted to use
19their market dominance to exert undue pressure on health
20insurance providers or to restrict a patient's access,
21mandatory contracting requirements must be imposed requiring
22that all physician practices operating as part of an
23integrated delivery network contract with any willing health
24insurance provider.

25Section 3.  Definitions.

26"Default provider agreement." An agreement between a
27hospital-owned physician practice that is part of an integrated
28delivery network and a willing health insurance carrier to
29provide health care services, which agreement is imposed upon
30the parties in the event that they fail to enter into a mutually

1agreeable provider contract within the time frames established
2by this act.

3"Department." The Insurance Department of the Commonwealth.

4"Health care services." Any medical-surgical, hospital,
5facility or ancillary service provided to an individual.

6"Health insurance carrier." An entity licensed in this
7Commonwealth to issue health insurance, subscriber contracts,
8certifications or plans that provide medical or health care
9coverage by a health care facility or licensed health care
10provider that is offered or governed under this act or any of
11the following:

12(1) The act of December 29, 1972 (P.L.1701, No.364),
13known as the Health Maintenance Organization Act.

14(2) The act of May 18, 1976 (P.L.123, No.54), known as
15the Individual Accident and Sickness Insurance Minimum
16Standards Act.

17(3) 40 Pa.C.S. Chs. 61 (relating to hospital plan
18corporations) and 63 (relating to professional health
19services plan corporations).

20"Health insurance policy." Any health insurance policy,
21subscriber contract, certificate or policy that provides health
22or sickness and accident coverage offered by a health insurance
23carrier and which is subject to review by the department under
24the provisions of the act of December 18, 1996 (P.L.1066,
25No.159), known as the Accident and Health Filing Reform Act. The
26term does not include any of the following:

27(1) An accident-only policy.

28(2) A credit-only policy.

29(3) A long-term care or disability income policy.

30(4) A specified disease policy.

1(5) A Medicare supplement policy.

2(6) A Civilian Health and Medical Program of the
3Uniformed Services (CHAMPUS) supplement policy.

4(7) A dental-only policy, other than a qualified dental
5policy.

6(8) A vision-only policy.

7(9) A workers' compensation policy.

8(10) An automobile medical payment policy under 75
9Pa.C.S. (relating to vehicles).

10(11) Any other similar policies providing for limited
11benefits.

12"Hospital-owned physician practice."  A physician practice
13that meets both of the following:

14(1) Provides health care services or other professional
15medical services to an individual.

16(2) Is any of the following:

17(i) Owned or operated by a hospital.

18(ii) Under joint control of a hospital.

19(iii) A subsidiary of a hospital.

20"Integrated delivery network." One or more entities with
21common ownership, operation or control, which include both of
22the following:

23(1) One or more hospitals, one or more physician
24practices and/or one or more health care providers offering
25health care services.

26(2) One or more entities operating as a health insurance
27carrier offering health insurance, administering health
28benefits, operating a health maintenance organization and/or
29offering other health care benefits and coverage to employers
30and/or individuals in this Commonwealth.

1"Provider contract." A written agreement meeting both of the
2following:

3(1) Is for the payment or reimbursement of health care
4services provided to any individual by a hospital-owned
5physician practice that is part of an integrated delivery
6network or any other entity directly or indirectly owned,
7operated or controlled by or otherwise affiliated with the
8integrated delivery network.

9(2) Is between both of the following:

10(i) A hospital-owned physician practice that is part
11of an integrated delivery network or any entity directly
12or indirectly owned, operated or controlled by or
13otherwise affiliated with an integrated delivery network.

14(ii) Any health insurance carrier.

15Section 4. Responsibilities.

16(a) General rule.--A hospital-owned physician practice that
17is part of an integrated delivery network shall comply with the
18following responsibilities:

19(1) Assure availability and accessibility of adequate
20health care services to members of a health insurance carrier
21which allows access to quality care and continuity of health
22care services.

23(2) Not engage in either of the following:

24(i) Place restrictive covenants in its employment
25contracts that restrain any individual from engaging in
26the individual's lawful profession.

27(ii) Limit or restrict a consumer's access to care
28or limit or restrict a consumer's access to continuity of
29care solely on the basis of the consumer's health
30insurance carrier.

1(3) Enter into a provider contract with any health
2insurance carrier that is willing to enter into a provider
3contract for health care services.

4(b) Effect of failure to maintain or enter into a mutually
5agreeable provider contract.--The following shall apply:

6(1) Failure of any hospital-owned physician practice
7that is part of an integrated delivery network and the
8willing health insurance carrier to maintain a mutually
9agreeable provider contract shall result in the parties
10entering into a default provider agreement for health care
11services while they submit to mandatory binding arbitration.
12The default provider agreement shall set forth payment terms,
13while all other contractual terms of the previously executed
14contract shall remain in effect until the arbitration process
15is completed. The arbitrator shall set all terms of the new
16provider contract.

17(2) Failure of any newly affiliated hospital-owned
18physician practice that is part of an existing integrated
19delivery network or the failure of any hospital-owned
20physician practice that is part of newly formed integrated
21delivery network and a willing health insurance carrier to
22enter into a mutually agreeable provider contract within 90
23days of affiliation or formation shall result in the parties
24entering into immediate mandatory binding arbitration. The
25arbitrator shall set all terms of the new provider contract.

26(c) Arbitration.--The following shall apply to arbitration
27required under subsection (b)(2):

28(1) A mutually agreeable arbitrator shall be chosen by
29the parties from the American Arbitration Association's
30National Healthcare Panel of arbitrators experienced in

1handling payor-provider disputes.

2(2) All costs associated with the arbitration shall be
3split equally between the parties.

4(3) The arbitrator shall conduct the arbitration
5pursuant to the American Arbitration Association's Healthcare
6Payor Provider Arbitration Rules.

7(4) Contract terms and conditions shall be established
8as follows:

9(i) Each party shall submit best and final contract
10terms to the arbitrator.

11(ii) The arbitrator may request the production of
12documents, data and other information.

13(iii) Payment terms and all other contractual
14provisions shall be set by the arbitrator.

15(d) Term of default provider agreement.--The default
16provider agreement shall last until the arbitration process
17between the hospital-owned physician practice that is part of an
18integrated delivery network and a willing health insurance
19carrier is completed.

20(e) Payment under the default provider agreement.--The
21reimbursement rate that a health insurance carrier is required
22to pay shall be an amount equal to the greatest of the following
23three possible amounts:

24(1) The amount negotiated with in-network providers for
25the same services.

26(2) The amount calculated by the same method the health
27insurance carrier generally uses to determine payments for
28out-of-network services, such as the usual, customary and
29reasonable charge.

30(3) The amount that would be paid under Medicare for the

1same services.

2(f) Prohibition.--A hospital-owned physician practice is
3prohibited from incorporating a termination provision within a
4provider contract with a health insurance carrier that allows
5for termination for anything other than willful breach.

6(g) Copies of contracts.--Copies of all provider contracts
7between a hospital-owned physician practice that is part of an
8integrated delivery network and any health insurance carrier
9shall be provided to the department.

10Section 5.  Confidentiality.

11The following confidentiality provisions shall apply:

12(1) Any provider contracts, documents, materials or
13information received by the department from a hospital-owned
14physician practice for the purpose of compliance with this
15act and any regulations developed pursuant to this act shall
16be confidential.

17(2) The department may use the information obtained
18pursuant to the provisions of this act for the sole purpose
19of compliance with this act.

20(3) Any provider contracts, documents, materials or
21information made confidential under this act shall not be
22subject to requests under the act of February 14, 2008
23(P.L.6, No.3), known as the Right-to-Know Law.

24Section 6.  Enforcement.

25(a) General rule.--The department shall ensure compliance
26with this act and shall investigate potential violations of this
27act based upon information received from health insurance
28carriers, hospital-owned physician practices, enrollees and
29other sources.

30(b) Regulations.--The department shall promulgate such

1regulations as may be necessary to carry out the provisions of
2this act.

3Section 7.  Civil penalties.

4The department may impose a civil penalty of not more than
5$25,000 per day, not to exceed $1,000,000 per calendar year, on
6a hospital-owned physician practice that is part of an
7integrated delivery network for a violation of this act.

8Section 8.  Effective date.

9This act shall take effect in 90 days.