Regular Session 2017-2018 House Bill 0440 P.N. 0456

PRINTER'S NO. 456

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

440

Session of

2017

INTRODUCED BY MURT, V. BROWN, D. COSTA, DRISCOLL, HARPER,

KINSEY, McNEILL, MILLARD, D. MILLER, READSHAW, SCHLOSSBERG,

SCHWEYER AND WATSON, FEBRUARY 10, 2017

REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 10, 2017

AN ACT

Amending Title 40 (Insurance) of the Pennsylvania Consolidated

Statutes, providing for special provisions relating to

particular classes of risk that involve mental health and

addiction; and making related repeals regarding Act 284 of

1921.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Title 40 of the Pennsylvania Consolidated

Statutes is amended by adding a part to read:

PART V

SPECIAL PROVISIONS RELATING TO

PARTICULAR CLASSES OF RISK

Chapter

81. Mental Health and Addiction

CHAPTER 81

MENTAL HEALTH AND ADDICTION

Subchapter

A. General Provisions

B. Mental Illness and Drug Abuse and Dependency

C. Benefits for Alcohol Abuse and Dependency

D. Health Insurance Coverage Parity and Nondiscrimination

SUBCHAPTER A

GENERAL PROVISIONS

Sec.

8101. Scope of chapter.

8102. Definitions.

§ 8101. Scope of chapter.

This chapter relates to insurance coverage for mental health

and addiction services.

§ 8102. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Department." The Insurance Department of the Commonwealth.

"Nonquantitative treatment limitation" or "NQTL." A p rocess,

strategy, evidentiary standard or other factor that is not

expressed numerically, but otherwise limits the scope or

duration of benefits for treatment. An NQTL includes, but is not

limited to:

(1) A medical management standard limiting or excluding

benefits based on:

(i) medical necessity or medical appropriateness; or

(ii) whether the treatment is experimental or

investigative.

(2) A formulary design for prescription drugs.

(3) For a plan with multiple network tiers, such as

preferred providers and participating providers, a network

tier design.

(4) A standard for provider admission to participate in

20170HB0440PN0456 - 2 -

a network, including reimbursement rates.

(5) A plan method for determining usual, customary and

reasonable charges.

(6) Refusal to pay for higher-cost therapies until it

can be shown that a lower-cost therapy is not effective.

(7) An exclusion based on failure to complete a course

of treatment.

(8) A restriction based on geographic location, facility

type, provider specialty or other criteria that limits the

scope or duration of benefits for services provided under the

plan or coverage.

(9) An in-network or out-of-network geographic

limitation.

(10) A limitation on inpatient services for situations

in which the participant is a threat to self or others.

(11) An exclusion for court-ordered and involuntary

holds.

(12) An experimental treatment limitation.

(13) Service coding.

(14) An exclusion for services provided by a clinical

social worker.

(15) Network adequacy.

(16) Provider reimbursement rates, including rates of

reimbursement for mental health and substance use services in

primary care.

"The Insurance Company Law of 1921." The act of May 17, 1921

(P.L.682, No.284), known as The Insurance Company Law of 1921.

SUBCHAPTER B

MENTAL ILLNESS AND DRUG ABUSE AND DEPENDENCY

Sec.

20170HB0440PN0456 - 3 -

8111. Scope of subchapter.

8112. Applicability.

8113. Definitions.

8114. Minimum standards.

8115. Committee study and reports.

§ 8111. Scope of subchapter.

This subchapter relates to insurance coverage regarding

mental illness and alcohol or other drug abuse and dependency.

§ 8112. Applicability.

(a) General rule.--Subject to subsection (b), this

subchapter shall apply to any health insurance policy offered,

issued or renewed on or after the effective date of this section

in this Commonwealth to groups of 50 or more employees.

(b) Exception.--This subchapter shall not apply to any of

the following policies:

(1) Accident only.

(2) Fixed indemnity.

(3) Limited benefit.

(4) Credit.

(5) Dental.

(6) Vision.

(7) Specified disease.

(8) Medicare supplement.

(9) CHAMPUS (Civilian Health and Medical Program for the

Uniformed Services) supplement.

(10) Long-term care.

(11) Disability income.

(12) Workers' compensation.

(13) Automobile medical payment.

§ 8113. Definitions.

20170HB0440PN0456 - 4 -

The following words and phrases when used in this subchapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Committee." The Legislative Budget and Finance Committee.

"Health insurance policy." Any group health, sickness or

accident policy or subscriber contract or certificate issued by

an entity subject to one of the following:

(1) The Insurance Company Law of 1921.

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

known as the Health Maintenance Organization Act.

(3) Chapter 61 (relating to hospital plan corporations)

or 63 (relating to professional health services plan

corporations).

"Mental illness and alcohol or other drug abuse and

dependency." Any condition or disorder that involves a mental

health condition or substance use disorder that falls under any

of the diagnostic categories listed in:

(1) the current edition of the mental disorders section

of the current International Statistical Classification of

Diseases and Related Health Problems; or

(2) the most recent version of the Diagnostic and

Statistical Manual of Mental Disorders.

§ 8114. Minimum standards.

A health insurance policy covered under this subchapter shall

provide coverage for mental illness and alcohol or other drug

abuse and dependency that meets at a minimum all of the

following standards:

(1) C overage for mental illness and alcohol or other

drug abuse and dependency shall include at least 30 inpatient

and 60 outpatient days annually.

20170HB0440PN0456 - 5 -

(2) A person covered under the policy shall be able to

convert coverage of inpatient days to outpatient days on a

one-for-two basis.

(3) There shall be no difference in either the annual or

lifetime dollar limits in coverage for mental illness and

alcohol or other drug abuse and dependency and any other

illness.

(4) There shall be no difference in cost-sharing

arrangements, including, but not limited to, deductibles and

copayments for coverage of mental illness and alcohol or

other drug abuse and dependency and for coverage of any other

illness.

(5) A health insurance policy may not impose an NQTL

with respect to a mental illness and alcohol or other drug

abuse and dependency in any classification of benefits

unless, under the terms of the policy as written and in

operation, any process, strategy, evidentiary standard or

other factor used in applying the NQTL to mental illness and

alcohol or other drug abuse and dependency benefits in the

classification are comparable to, and are applied no more

stringently than, the process, strategy, evidentiary standard

or other factor used in applying the NQTL with respect to

medical or surgical benefits in the same classification.

§ 8115. Committee study and reports.

(a) Study.--The committee shall undertake a study of the

cost and benefits of this subchapter, as a continuation of the

study under section 635.1(d) of The Insurance Company Law of

1921.

(b) Reports.--The committee shall prepare a report of its

study for the General Assembly on or before June 30 of each odd-

20170HB0440PN0456 - 6 -

numbered year, as a continuation of the series of reports begun

under section 635.1 of The Insurance Company Law of 1921.

report under this section shall include, but not be limited to,

an analysis of the following:

(1) The effect on policy premiums.

(2) The cost benefit of extending this act to all group

health insurance policies offered in this Commonwealth.

(3) The cost benefit of this enhanced level of coverage

for mental illness and alcohol or other drug abuse and

dependency and the cost benefit to those employers who offer

policies with more liberal benefits.

(4) The identity of employers who, after the effective

date of this section, provide reduced mental health insurance

benefits to employees and who provided more liberal mental

health insurance benefits than provided in The Insurance

Company Law of 1921.

(5) Any mental illnesses enumerated under Axis 1 of the

Current Diagnostic and Statistical Manual of Mental Disorders

not covered under this subchapter, with specific

consideration of whether any of them should be included in

the definition of the term "mental illness and alcohol or

other drug abuse and dependency."

(6) Actions taken by the department to assure health

insurance policies are in compliance with this subchapter and

that quality and access to treatment for mental health

conditions are not compromised by providing coverage under

this subchapter.

(7) Any segments of this Commonwealth's population that

may be excluded from access to treatment for mental health

20170HB0440PN0456 - 7 -

conditions.

(8) The use of medical services resulting from the

provision of access to mental health treatment as provided by

this subchapter.

(d) Cooperation.--The department shall fully cooperate and

provide all nonconfidential data, records, reports and

information that the committee may request in connection with

the study.

(e) Quality control.--The study and reports under this

section must be actuarially sound and subject to peer review by

the American Academy of Actuaries. Any assumptions upon which

the study and the reports are based must be common to the

current health insurance market in this Commonwealth.

SUBCHAPTER C

BENEFITS FOR ALCOHOL ABUSE AND DEPENDENCY

Sec.

8121. Scope of subchapter.

8122. Definitions.

8123. Mandated policy coverages and options.

8124. Inpatient detoxification.

8125. Nonhospital residential alcohol or other drug services.

8126. Outpatient alcohol or other drug services.

8127. Deductibles, copayment plans and prospective pay.

8128. Rules and regulations.

8129. Preservation of certain benefits.

§ 8121. Scope of subchapter.

This subchapter relates to benefits for alcohol abuse and

dependency.

§ 8122. Definitions.

The following words and phrases when used in this subchapter

20170HB0440PN0456 - 8 -

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Alcohol or drug abuse." Any use of alcohol or other drugs

which produces:

(1) a pattern of pathological use causing impairment in

social or occupational functioning; or

(2) physiological dependency evidenced by physical

tolerance or withdrawal.

"Detoxification." The process in which an alcohol-

intoxicated, drug-intoxicated, alcohol-dependent or drug-

dependent person is assisted in a facility licensed by the

Department of Health through the period necessary to eliminate,

by metabolic or other means, the intoxicating alcohol or other

drugs, alcohol and other drug dependency factors or alcohol in

combination with drugs as determined by a licensed physician,

while keeping the physiological risk to the patient at a

minimum.

"Drugs." A ddictive drugs and drugs of abuse listed as

scheduled drugs in the act of April 14, 1972 (P.L.233, No.64),

known as The Controlled Substance, Drug, Device and Cosmetic

Act.

"Hospital." A facility licensed as a hospital by the

Department of Health or the Department of Human Services or

operated by the Commonwealth and conducting an alcoholism or

drug addiction treatment program licensed by the Department of

Health.

"Inpatient care." The provision of medical, nursing,

counseling or therapeutic services 24 hours a day in a hospital

or nonhospital facility, according to individualized treatment

plans.

20170HB0440PN0456 - 9 -

"Nonhospital facility." A facility, except for transitional

living facilities, licensed by the Department of Health for the

care or treatment of alcohol-dependent or other drug-dependent

persons.

"Nonhospital residential care." The provision of medical,

nursing, counseling or therapeutic services to patients

suffering from alcohol or other drug abuse or dependency in a

residential environment, according to individualized treatment

plans.

"Outpatient care." The provision of medical, nursing,

counseling or therapeutic services in a hospital or nonhospital

facility on a regular and predetermined schedule, according to

individualized treatment plans.

"Partial hospitalization." The provision of medical,

nursing, counseling or therapeutic services on a planned and

regularly scheduled basis in a hospital or nonhospital facility

licensed as an alcoholism or drug addiction treatment program by

the Department of Health, designed for a patient or client who

would benefit from more intensive services than are offered in

outpatient care but who does not require inpatient care.

§ 8123. M andated policy coverages and options.

(a) Applicability.--

(1) This section shall apply to the following:

(i) All group health or sickness or accident

insurance policies that provide hospital or

medical/surgical coverage.

(ii) All group subscriber contracts or certificates

that provide hospital or medical/surgical coverage and

that are issued by any entity subject to any of the

following:

20170HB0440PN0456 - 10 -

(A) The Insurance Company Law of 1921.

(B) The act of December 29, 1972 (P.L.1701,

No.364), known as the Health Maintenance Organization

Act.

corporations) or 63 (relating to professional health

services plan corporations).

(2) This section shall not apply to Medicare or Medicaid

supplemental contracts or limited coverage accident and

sickness policies, including, but not limited to, cancer

insurance, polio insurance, dental care and similar policies

as may be identified as exempt from this section by the

Insurance Commissioner.

(b) Mandated coverage.--In addition to the other

requirements under The Insurance Company Law of 1921, all

policies, contracts or certificates under subsection (a) shall

include within the coverage those benefits for alcohol or other

drug abuse and dependency as provided in sections 8124 (relating

to inpatient detoxification), 8125 (relating to nonhospital

residential alcohol or other drug services) and 8126 (relating

to outpatient alcohol or other drug services).

subsection (b) may be provided through a combination of

policies, contracts or certificates.

(d) Prospective payment plans.--The benefits specified in

subsection (b) may be provided through prospective payment

plans.

§ 8124. Inpatient detoxification.

(a) Location.--Inpatient detoxification as a covered benefit

under this subchapter shall be provided either in a hospital or

20170HB0440PN0456 - 11 -

in an inpatient nonhospital facility that:

(1) has a written affiliation agreement with a hospital

for emergency, medical and psychiatric or psychological

support services;

(2) meets minimum standards for client-to-staff ratios

and staff qualifications that shall be established by the

Department of Health; and

(3) is licensed as an alcoholism or drug addiction

treatment program, or both.

(b) Coverage.--The following services shall be covered under

inpatient detoxification:

(1) Lodging and dietary services.

(2) Physician, psychologist, nurse, certified addictions

counselor and trained staff services.

(3) Diagnostic X-ray services.

(4) Psychiatric, psychological and medical laboratory

testing.

(5) Drugs, medicines, equipment use and supplies.

to a lifetime limit for any covered individual of four

admissions for detoxification. Reimbursement per admission may

be limited to seven days of treatment or an equivalent amount.

§ 8125. Nonhospital residential alcohol or other drug services.

(a) Treatment and benefits.--

(1) Minimal additional treatment as a covered benefit

under this subchapter shall be provided in a facility that:

(i) meets minimum standards for client-to-staff

ratios and staff qualifications that shall be established

by the Department of Drug and Alcohol Programs; and

(ii) is appropriately licensed by the Department of

20170HB0440PN0456 - 12 -

Health as an alcoholism or drug addiction treatment

program, or both.

(2) Before an insured may qualify to receive benefits

under this section, a licensed physician or licensed

psychologist must certify the insured as a person suffering

from alcohol or other drug abuse or dependency and refer the

insured for the appropriate treatment.

( b) Covered services.--The following services shall be

covered under this section:

(1) L odging and dietary services.

(2) Physician, psychologist, nurse, certified addictions

counselor and trained staff services.

(3) Rehabilitation therapy and counseling.

(4) Family counseling and intervention.

(5) Psychiatric, psychological and medical laboratory

tests.

(6) Drugs, medicines, equipment use and supplies.

(1) The treatment under this section shall be covered as

required by The Insurance Company Law of 1921 for a minimum

of 30 days per year for residential care. Additional days

shall be available as provided in section 8126(c) (relating

to outpatient alcohol or other drug services).

(2) Treatment under this section may be subject to a

lifetime limit for any covered individual of 90 days.

§ 8126. Outpatient alcohol or other drug services.

(a) Treatment and benefits.--

(1) Minimal additional treatment as a covered benefit

under this subchapter shall be provided in a facility

appropriately licensed by the Department of Health as an

20170HB0440PN0456 - 13 -

alcoholism or drug addiction treatment program.

(2) Before an insured may qualify to receive benefits

under this section, a licensed physician or licensed

psychologist must certify the insured as a person suffering

from alcohol or other drug abuse or dependency and refer the

insured for the appropriate treatment.

(b) Covered services.-- The following services shall be

covered under this section:

(1) P hysician, psychologist, nurse, certified addictions

counselor and trained staff services.

(2) Rehabilitation therapy and counseling.

(3) Family counseling and intervention.

(4) Psychiatric, psychological and medical laboratory

tests.

(5) Drugs, medicines, equipment use and supplies,

including coverage for at least one opioid antagonist,

including the medication product, administration devices and

any pharmacy administration fees related to the dispensing of

the opioid antagonist. This coverage must include refills for

expired or utilized opioid antagonist.

(1) Treatment under this section shall be covered as

required by The Insurance Company Law of 1921 for a minimum

of:

(i) 30 outpatient, full-session visits or equivalent

partial visits per year; and

(ii) 30 separate sessions of outpatient or partial

hospitalization services per year, which may be exchanged

on a two-to-one basis to secure up to 15 additional

nonhospital, residential alcohol treatment days.

20170HB0440PN0456 - 14 -

(2) Treatment under this section may be subject to a

lifetime limit for any covered individual of 120 outpatient,

full-session visits or equivalent partial visits.

(d) Clinical review criteria.--For any utilization review or

benefit determination for the treatment of alcohol or other drug

abuse and dependency, including, but not limited to, prior

authorization and medical necessity determinations, the clinical

review criteria shall be the most recent Treatment Criteria for

Addictive, Substance-Related and Co-Occurring Conditions

established by the American Society of Addiction Medicine. No

additional criteria may be used during utilization review or

benefit determination for treatment of substance use disorders.

(e) Treatment criteria.--Any Federal Drug Administration-

approved forms of medication-assisted treatment prescribed for

the treatment of alcohol dependence or treatment of opioid

dependence shall be covered, if the treatment is medically

necessary, according to most recent Treatment Criteria for

Addictive, Substance-Related, and Co-Occurring Conditions

established by the American Society of Addiction Medicine.

§ 8127. Deductibles, copayment plans and prospective pay.

(a) Application to benefits.--Reasonable deductible or

copayment plans, or both, after approval by the Insurance

Commissioner, may be applied to benefits paid to or on behalf of

patients during the course of alcohol or other drug abuse or

dependency treatment. In the first instance or course of

treatment, no deductible or copayment shall be less favorable

than those applied to similar classes or categories of treatment

for physical illness generally in each policy.

(b) Prospective payment plan.--In the first instance or

course of treatment under a prospective payment plan, no

20170HB0440PN0456 - 15 -

deductible or copayment shall be less favorable than those

applied to similar classes or categories of treatment for

physical illness generally in each policy.

§ 8128. Rules and regulations.

The Insurance Commissioner and the Secretary of Health shall

jointly promulgate those rules and regulations as are deemed

necessary for the effective implementation and operation of this

subchapter.

§ 8129. Preservation of certain benefits.

Nothing in this subchapter shall serve to diminish the

benefits of any insured or subscriber existing on the effective

date of this subchapter nor prevent the offering or acceptance

of benefits that exceed the minimum benefits required by The

Insurance Company Law of 1921.

SUBCHAPTER D

HEALTH INSURANCE COVERAGE PARITY AND NONDISCRIMINATION

Sec.

8131. Scope of subchapter.

8132. Purpose of subchapter.

8133. Definitions.

8134. Adoption of and compliance with Federal acts.

8135. Penalties.

8136. Regulations and regulatory implementation.

§ 8131. Scope of subchapter.

This subchapter relates to health insurance coverage parity

and nondiscrimination.

§ 8132. Purpose of subchapter.

(a) Findings.--The General Assembly finds that it is

necessary to maintain the Commonwealth's sovereignty over the

regulation of health insurance in this Commonwealth by

20170HB0440PN0456 - 16 -

implementing the requirements of the following, which are

collectively contained in the Public Health Service Act (58

Stat. 682, 42 U.S.C. § 201 et seq.):

(1) The MHPAEA.

(2) The Genetic Information Nondiscrimination Act of

2008 (Public Law 110-233, 122 Stat. 881).

(3) Michelle's Law (Public Law 110-381, 122 Stat. 4081-

4086).

(b) Legislative intent.--The provisions of this subchapter

are intended to meet the requirements of the acts under

subsection (a) while retaining the Commonwealth's authority to

regulate health insurance in this Commonwealth.

§ 8133. Definitions.

(a) General rule.--The following words and phrases when used

in this subchapter shall have the meanings given to them in this

section unless the context clearly indicates otherwise:

"Commissioner." The Insurance Commissioner of the

Commonwealth.

" Federal acts." The following Federal laws, which are

collectively contained in the Public Health Service Act (58

Stat. 682, 42 U.S.C. § 201 et seq.):

(1) The MHPAEA.

(2) The Genetic Information Nondiscrimination Act of

2008 (Public Law 110-233, 122 Stat. 881).

(3) Michelle's Law (Public Law 110-381, 122 Stat. 4081-

4086).

"Fraternal benefit society." An entity holding a current

certificate of authority under Article XXIV of The Insurance

Company Law of 1921.

" Health maintenance organization." An entity holding a

20170HB0440PN0456 - 17 -

current certificate of authority under the act of December 29,

1972 (P.L.1701, No.364), known as the Health Maintenance

Organization Act.

"Hospital plan corporation." An entity holding a current

certificate of authority organized and operated under Chapter 61

(relating to hospital plan corporations).

"Insurer." A foreign or domestic insurance company,

association or exchange, health maintenance organization,

hospital plan corporation, professional health services plan

corporation, fraternal benefit society or risk-assuming

preferred provider organization. The term shall not include a

group health plan as defined in section 2791 of the Public

Health Service Act (58 Stat. 682, 42 U.S.C. § 300gg-91).

"MHPAEA." Paul Wellstone and Pete Domenici Mental Health

Parity and Addiction Equity Act of 2008 (Public Law 110-343, 122

Stat. 3881).

"Preferred provider organization." An entity holding a

current certificate of authority under section 630 of The

Insurance Company Law of 1921.

"Professional health services plan corporation." An entity

holding a current certificate of authority under Chapter 63

(relating to professional health services plan corporations).

This term shall not include dental service corporations or

optometric service corporations, as those terms are defined

under section 6302(a) (relating to definitions).

(b) F ederal law.--The words, terms and definitions found in

the Federal acts, including those in section 2791 of the Public

Health Service Act (58 Stat. 682, 42 U.S.C. § 300gg-91), are

adopted for purposes of implementing this subchapter, except as

noted in this section. The term "health insurance issuer" under

20170HB0440PN0456 - 18 -

section 2791(b)(2) of the Public Health Service Act shall have

the meaning provided under "insurer" in subsection (a).

§ 8134. Adoption of and compliance with Federal acts.

(a) Compliance.--Insurers shall comply with the Federal acts

as contained in sections 2701, 2702, 2705, 2707, 2721, 2753 and

2754 of the Public Health Service Act (58 Stat. 682, 42 U.S.C.

§§ 300gg, 300gg-1, 300gg-5, 300gg-7, 300gg-21, 300gg-53 and

300gg-54). Medicaid and the children's health insurance program

under Article XXIII-A of The Insurance Company Law of 1921 shall

comply with final rules promulgated for Medicaid in 42 CFR Pt.

447 (relating to payments for services).

(b) Report.--Each insurer shall submit an annual report to

the department on or before March 1 that contains the following

information:

(1) The frequency with which the insurer required prior

authorization for all prescribed procedures, services or

medications for mental health benefits during the previous

calendar year, the frequency with which the insurer required

prior authorization for all prescribed procedures, services

or medications for alcohol or other drug abuse and dependency

benefits during the previous calendar year and the frequency

with which the insurer required prior authorization for all

prescribed procedures, services or medications for medical

and surgical benefits during the previous calendar year.

Insurers must submit this information separately for

inpatient in-network benefits, inpatient out-of-network

benefits, outpatient in-network benefits, outpatient out-of-

network benefits, emergency care benefits and prescription

drug benefits. Frequency shall be expressed as a percentage,

with total prescribed procedures, services or medications

20170HB0440PN0456 - 19 -

within each classification of benefits as the denominator and

the overall number of times prior authorization was required

for any prescribed procedures, services or medications within

each corresponding classification of benefits as the

numerator.

(2) A description of the process used to develop or

select the medical necessity criteria for mental health

benefits, the process used to develop or select the medical

necessity criteria for alcohol or other drug abuse and

dependency benefits and the process used to develop or select

the medical necessity criteria for medical and surgical

benefits.

(3) Identification of all NQTLs that are applied to

mental health benefits, all NQTLs that are applied to alcohol

or other drug abuse and dependency benefits and all NQTLs

that are applied to medical and surgical benefits. NQTLs are

defined as whichever is more extensive of how they are

defined in 45 CFR Pt. 146 (relating to requirements for the

group health insurance market) or how they are defined in

State law.

(4) The results of an analysis that demonstrates that

for the medical necessity criteria described in paragraph (2)

and for each NQTL identified in paragraph (3), as written and

in operation, the processes, strategies, evidentiary

standards or other factors used to apply the medical

necessity criteria and each NQTL to mental health and alcohol

or other drug abuse and dependency benefits are comparable

to, and are applied no more stringently than, the processes,

strategies, evidentiary standards or other factors used to

apply the medical necessity criteria and each NQTL, as

20170HB0440PN0456 - 20 -

written and in operation, to medical and surgical benefits.

At a minimum, the results of the analysis shall:

(i) Identify the specific factors the insurer used

in performing its NQTL analysis.

(ii) Identify and define the specific evidentiary

standards relied on to evaluate the factors.

(iii) Describe how the evidentiary standards are

applied to each service category for mental health

benefits, alcohol or other drug abuse and dependency

benefits, medical benefits and surgical benefits.

(iv) Disclose the results of the analyses of the

specific evidentiary standards in each service category.

(v) Disclose the specific findings of the insurer in

each service category and the conclusions reached with

respect to whether the processes, strategies, evidentiary

standards or other factors used in applying the NQTL to

mental health or alcohol or other drug abuse and

dependency benefits are comparable to, and applied no

more stringently than, the processes, strategies,

evidentiary standards or other factors used in applying

the NQTL with respect to medical and surgical benefits in

the same classification.

(5) The rates of and reasons for denial of claims for

inpatient in-network, inpatient out-of-network, outpatient

in-network, outpatient out-of-network, prescription drugs and

emergency care mental health services during the previous

calendar year compared to the rates of and reasons for denial

of claims in those same classifications of benefits for

medical and surgical services during the previous calendar

year.

20170HB0440PN0456 - 21 -

(6) The rates of and reasons for denial of claims for

inpatient in-network, inpatient out-of-network, outpatient

in-network, outpatient out-of-network, prescription drugs and

emergency care alcohol or other drug abuse and dependency

services during the previous calendar year compared to the

rates of and reasons for denial of claims in those same

classifications of benefits for medical and surgical services

during the previous calendar year.

(7) A certification signed by the insurer's chief

executive officer and chief medical officer that states that

the insurer has completed a comprehensive review of the

administrative practices of the insurer for the prior

calendar year for compliance with the necessary provisions of

the MHPAEA, and any amendments to those provisions, and

Federal guidelines or regulations issued under those

provisions, including 45 CFR Pts. 146 and 147 (relating to

health insurance reform requirements for the group and

individual health insurance markets) and 45 CFR 156.115(a)(3)

(relating to provision of EHB).

(8) Any other information necessary to clarify data

provided in accordance with this section requested by the

commissioner, including information that may be proprietary

or have commercial value. The commissioner shall not certify

any health policy of an insurer that fails to submit all data

as required by this section.

§ 8135. Penalties.

Upon satisfactory evidence of a violation of this subchapter

by any insurer or other person, the commissioner may, in the

commissioner's discretion, pursue any one of the following

courses of action:

20170HB0440PN0456 - 22 -

(1) S uspend, revoke or refuse to renew the license of

the offending person.

(2) Enter a cease and desist order.

(3) Impose a civil penalty of not more than $5,000 for

each action in violation of this subchapter.

(4) Impose a civil penalty of not more than $10,000 for

each action in willful violation of this subchapter.

§ 8136. Regulations and regulatory implementation.

(a) Regulations.-- The department may promulgate regulations

as may be necessary or appropriate to carry out this subchapter.

(b) Implementation of Federal act.--The department shall

implement and enforce applicable provisions of the MHPAEA and

Federal guidelines or regulations issued under those provisions,

including 45 CFR Pts. 146 (relating to regulations for the group

health insurance market) and 147 (relating to health insurance

reform requirements for the group and individual health

insurance markets) and 45 CFR 156.115(a)(3) (relating to

provision of EHB), which include:

(1) Ensuring compliance by individual and group health

insurance policies.

(2) Detecting violations of the law by individual and

group health insurance policies.

(3) Accepting, evaluating and responding to complaints

regarding violations.

(4) Maintaining and regularly reviewing, for possible

parity violations, a publicly available consumer complaint

log regarding mental health and alcohol or other drug abuse

and dependency coverage.

(5) Conducting parity compliance market conduct

examinations of individual and group health insurance

20170HB0440PN0456 - 23 -

policies, including, but not limited to, reviews of network

adequacy, reimbursement rates, denials and prior

authorizations.

(1) Not later than June 30 of each year, the department

shall issue a report to the General Assembly and provide an

educational presentation to the General Assembly.

(2) The report and presentation shall:

(i) Cover the methodology the department is using to

check for compliance with the MHPAEA and any Federal

regulations or guidelines relating to the compliance and

oversight of the MHPAEA and 42 U.S.C. § 18031(j)

(relating to affordable choices of health benefit plans).

(ii) Cover the methodology the department is using

to check for compliance with Subchapters B (relating to

mental illness and drug abuse and dependency) and C

(relating to benefits for alcohol abuse and dependency).

(iii) Identify market conduct examinations conducted

or completed during the preceding 12-month period

regarding compliance with parity in mental health and

alcohol or other drug abuse and dependency benefits under

Federal and State laws and summarize the results of such

market conduct examinations. This shall include:

(A) The number of market conduct examinations

initiated and completed.

(B) The benefit classifications examined by each

market conduct examination.

examination, including quantitative and

nonquantitative treatment limitations.

20170HB0440PN0456 - 24 -

(D) A summary of the basis for the final

decision rendered in each market conduct examination.

(iv) Detail any educational or corrective actions

the regulatory agency has taken to ensure insurer

compliance with the MHPAEA, 42 U.S.C. § 18031(j) and

Subchapters B and C.

(v) Detail the department's educational approaches

relating to informing the public about mental health and

alcohol or other drug abuse and dependency parity

protections under Federal and State law.

(3) Individually identifiable information shall be

excluded from the reports consistent with Federal privacy

protections.

(4) The report must be written in nontechnical, readily

understandable language and shall be made available to the

public by, among other means as the department finds

appropriate, posting the report on the department's publicly

accessible Internet website.

Section 2. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of 40

Pa.C.S. Ch. 81.

(2) The following provisions of the act of May 17, 1921

(P.L.682, No.284), known as The Insurance Company Law of

1921, are repealed:

(i) Section 635.1.

(ii) Article VI-A.

(iii) Article VI-B.

Section 3. The addition of 40 Pa.C.S. Ch. 81 is a

continuation of section 635.1 and Articles VI-A and VI-B of the

20170HB0440PN0456 - 25 -

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

Company Law of 1921. The following apply:

(1) Except as otherwise provided in 40 Pa.C.S. Ch. 81,

all activities initiated under section 635.1 and Articles VI-

A and VI-B of The Insurance Company Law of 1921 shall

continue and remain in full force and effect and may be

completed under 40 Pa.C.S. Ch. 81. Orders, regulations, rules

and decisions which were made under section 635.1 and

Articles VI-A and VI-B of The Insurance Company Law of 1921

and which are in effect on the effective date of 40 Pa.C.S.

Ch. 81 shall remain in full force and effect until revoked,

vacated or modified under 40 Pa.C.S. Ch. 81. Contracts,

obligations and collective bargaining agreements entered into

under section 635.1 and Articles VI-A and VI-B of The

Insurance Company Law of 1921 are not affected nor impaired

by the repeal of section 635.1 and Articles VI-A and VI-B of

The Insurance Company Law of 1921.

(2) Except as otherwise provided in 40 Pa.C.S. Ch. 81,

any difference in language between 40 Pa.C.S. Ch. 81 and

section 635.1 and Articles VI-A and VI-B of The Insurance

Company Law of 1921 is intended only to conform to the style

of the Pennsylvania Consolidated Statutes and is not intended

to change or affect the legislative intent, judicial

construction or administration and implementation of section

635.1 and Articles VI-A and VI-B of The Insurance Company Law

of 1921.

Section 4. This act shall take effect immediately.

20170HB0440PN0456 - 26 -