PRIOR PRINTER'S NOS. 1374, 1873, 2432 PRINTER'S NO. 2560
No. 1168 Session of 2005
Report of the Committee of Conference
To the Members of the House of Representatives and Senate:
We, the undersigned, Committee of Conference on the part of
the House of Representatives and Senate for the purpose of
considering House Bill No. 1168, entitled:
"An act amending the act of June 13, 1967 (P.L.31, No.21),
entitled 'An act to consolidate, editorially revise, and codify
the public welfare laws of the Commonwealth,' further providing
for special provider participation requirements,"
respectfully submit the following bill as our report:
SAMUEL H. SMITH
MICHAEL R. VEON
DAVID G. ARGALL
(Committee on the part of the House of Representatives.)
DAVID J. BRIGHTBILL
JAKE CORMAN
VINCENT J. HUGHES
(Committee on the part of the Senate.)
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AN ACT
1 Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
2 act to consolidate, editorially revise, and codify the public
3 welfare laws of the Commonwealth," providing for use of
4 medical expenses to establish medical assistance eligibility,
5 for lifetime limit on unpaid medical expenses, for penalty
6 period for asset transfer, for treatment of life estates and
7 annuities, for community spouse income, for eligibility for
8 home and community-based services, for verification of
9 eligibility and for eligibility redetermination of persons
10 for medical assistance; further providing for medical
11 assistance payments for institutional care, for other medical
12 assistance payments, for reimbursement for certain items and
13 services and for relatives' responsibility; providing for
14 medical assistance benefit packages, for coverage,
15 copayments, premiums and rates, for definitions of limited
16 applicability, for rebates, for pharmacy management systems,
17 for enrollment limitation and for established drug regimens;
18 further providing for other computations affecting counties,
19 for special provider participation requirements and for
20 third-party liability; and providing for data matching, for
21 special needs trusts, for a health insurance premium payment
22 program and for parity in insurance coverage for State-owned
23 psychiatric hospitals.
24 The General Assembly of the Commonwealth of Pennsylvania
25 hereby enacts as follows:
26 Section 1. The act of June 13, 1967 (P.L.31, No.21), known
27 as the Public Welfare Code, is amended by adding sections to
28 read:
29 Section 441.3. Use of Medical Expenses to Establish
30 Eligibility for Medical Assistance.--Notwithstanding any other
31 provision of law to the contrary, in determining eligibility for
32 retroactive and prospective medical assistance, only medical
33 expenses incurred on or after the first day of the third month
34 before the month of application may be deducted from countable
35 income, provided that the expenses were not previously deducted
36 in determining eligibility for medical assistance and are not
37 subject to payment by another party, including medical
38 assistance.
39 Section 441.4. Lifetime Limit on Allowable Income Deductions
40 for Medical Expenses When Determining Payment Toward the Cost of
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1 Long-Term Care Services.--(a) Necessary medical or remedial
2 care expenses recognized under Federal or State law but not paid
3 for by the medical assistance program are allowable income
4 deductions when determining a recipient's payment toward the
5 cost of long-term care services. An allowable income deduction
6 for unpaid medical expenses incurred prior to the authorization
7 of medical assistance eligibility and those medical expenses
8 incurred for long-term care services after medical assistance is
9 authorized shall be subject to a lifetime maximum of ten
10 thousand dollars ($10,000), unless application of the limit
11 would result in undue hardship.
12 (b) As used in this section, the term "undue hardship" shall
13 mean that either:
14 (1) denial of medical assistance would deprive the
15 individual of medical care and endanger the individual's health
16 or life; or
17 (2) the individual or a financially dependent family member
18 would be deprived of food, shelter or the necessities of life.
19 Section 441.5. Penalty Period for Asset Transfer.--(a)
20 Pursuant to section 1917(c) of the Social Security Act (49 Stat.
21 620, 42 U.S.C. § 1396p(c)), the department shall impose a
22 penalty of ineligibility for all ineligible days, whether for
23 full months or for a partial month's period of ineligibility, or
24 both, when an applicant, recipient or spouse of an applicant or
25 a recipient of the services set forth in subsection (b)
26 transfers assets for less than fair market value within or after
27 the look-back period as defined in section 1917(c) of the Social
28 Security Act. Transfers totaling five hundred dollars ($500) or
29 less in a calendar month shall not be subject to the penalty.
30 (b) The ineligibility period set forth in subsection (a)
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1 shall apply to all of the following:
2 (1) Nursing facility services.
3 (2) Services equivalent to those provided in a nursing
4 facility.
5 (3) Home and community-based services furnished under a
6 waiver granted under section 1915(c) or (d) of the Social
7 Security Act (42 U.S.C. § 1396n(c) or (d)).
8 Section 441.6. Treatment of Life Estates, Annuities and
9 Other Contracts in Determining Medical Assistance Eligibility.--
10 (a) As a condition of eligibility for medical assistance, every
11 applicant or recipient who owns a life estate in property with
12 retained rights to revoke, amend or redesignate the remainderman
13 must exercise those rights as directed by the department. The
14 acceptance of medical assistance shall be an assignment by
15 operation of law to the department of any right to revoke, amend
16 or redesignate the remainderman of a life estate in property.
17 (b) Any provision in any annuity or other contract for the
18 payment of money owned by an applicant or recipient of medical
19 assistance, or owned by a spouse or other legally responsible
20 relative of such applicant or recipient, that has the effect of
21 limiting the right of such owner to sell, transfer, or assign
22 the right to receive payments thereunder, or restricts the right
23 to change the designated beneficiary thereunder, is void.
24 (c) In determining eligibility for medical assistance, there
25 shall be a rebuttable presumption that any annuity or contract
26 to receive money is marketable without undue hardship.
27 (d) Upon approval by the Federal Government of any required
28 state plan amendment implementing this subsection and
29 notwithstanding subsections (b) and (c), a commercial annuity or
30 contract purchased by or for an individual using that
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1 individual's assets will not be considered an available resource
2 if the annuity meets all of the following conditions:
3 (1) Is an irrevocable guaranteed annuity.
4 (2) Guarantees to pay out principal and interest in equal
5 monthly installments with no balloon payment to the individual
6 so that payments are paid out over the actuarial life expectancy
7 of the annuitant, as set forth in life expectancy tables
8 approved by the department.
9 (3) Names the department as the residual beneficiary of any
10 funds remaining due under the annuity at time of death of the
11 annuitant, not to exceed the amount of medical assistance
12 expended on the individual during his or her lifetime.
13 (4) Is issued by an insurance company licensed and approved
14 to do business in this Commonwealth.
15 (e) This section applies to all annuity, life insurance and
16 other contracts entered into on or after the effective date of
17 this section and to life estates owned by any individual who
18 applies or reapplies for medical assistance on or after the
19 effective date of this section.
20 Section 441.7. Income for the Community Spouse.--(a) When a
21 community spouse has income below the monthly maintenance needs
22 allowance as determined under the department's regulations and
23 Title XIX of the Social Security Act (49 Stat. 620, 42 U.S.C. §
24 1396 et seq.), the institutionalized spouse may transfer
25 additional resources to the community spouse only in accordance
26 with this section.
27 (b) The institutionalized spouse may transfer income to the
28 community spouse in an amount equal to the difference between:
29 (1) The community spouse's monthly maintenance needs
30 allowance; and
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1 (2) The community spouse's income from all sources.
2 (c) Resources of the institutionalized spouse may be used to
3 purchase an annuity in accordance with this subsection. The
4 following shall apply:
5 (1) The annuity purchased may provide the community spouse
6 with monthly income equal to the difference between:
7 (i) the community spouse's monthly maintenance needs
8 allowance; and
9 (ii) the community spouse's income from all sources if the
10 community spouse survives the institutionalized spouse.
11 (2) The annuity purchased to provide income for the
12 community spouse must meet all of the following conditions:
13 (i) Be actuarially sound.
14 (ii) Be guaranteed.
15 (iii) Pay in equal monthly payments so that payments are
16 paid out over the actuarial life expectancy of the annuitant, as
17 set forth in life expectancy tables approved by the department.
18 (iv) Name the department as the contingent beneficiary in
19 the event that the community spouse predeceases the expiration
20 of the guaranteed period of the annuity, not to exceed the
21 amount of all medical assistance expended on behalf of the
22 institutionalized spouse.
23 (3) If an annuity is purchased and the community spouse's
24 income from all sources including the annuity is less than the
25 monthly maintenance needs allowance, the institutionalized
26 spouse may transfer sufficient income to bring the community
27 spouse's income up to the monthly maintenance needs allowance.
28 (d) As used in this section, the following words and phrases
29 shall have the following meanings:
30 "Community spouse" means the spouse of an institutionalized
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1 spouse.
2 "Institutionalized spouse" means an individual who is:
3 (1) in a medical institution;
4 (2) in a nursing facility or receiving services equivalent
5 to those provided in a nursing facility; or
6 (3) receiving home and community-based services in lieu of
7 nursing facility care pursuant to a waiver granted under section
8 1915(c) or (d) of the Social Security Act (49 Stat. 620, 42
9 U.S.C. § 1396n(c) or (d)).
10 Section 441.8. Eligibility for Home and Community-based
11 Services.--As a condition of eligibility for home and community-
12 based services, an applicant shall be subject to all medical and
13 financial eligibility requirements for medical assistance
14 including:
15 (1) Medical eligibility for the payment of nursing facility
16 care or the equivalent level of care in a medical institution.
17 (2) Financial eligibility requirements under Federal and
18 State law, including the provisions of sections 1917 and 1924 of
19 the Social Security Act (49 Stat. 620, 42 U.S.C. §§1396p and
20 1396r-5).
21 (3) All other eligibility requirements for medical
22 assistance under Federal and State law.
23 Section 441.9. Verification of Eligibility.--(a) Except as
24 set forth in subsection (b), income shall be verified prior to
25 authorization of medical assistance or during a redetermination
26 of a recipient's eligibility unless the verification is pending
27 from a third party and the applicant has cooperated in the
28 verification attempt in accordance with department regulations.
29 (b) Notwithstanding subsection (a), the department may
30 authorize medical assistance for pregnant women, children, the
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1 elderly or people with disabilities if third-party, automated
2 sources of verification are used to verify income within sixty
3 days of the date of authorization.
4 (c) Except as prohibited by Federal law, it shall be a
5 condition of eligibility for medical assistance that an
6 applicant or recipient consent to the disclosure of information
7 about the age, residence, citizenship, employment, applications
8 for employment, income and resources of the applicant or
9 recipient which is in the possession of third parties. Consent
10 shall be effective to authorize a third party to release
11 information requested by the department. Except in a case of
12 suspected fraud, the department shall attempt to notify the
13 applicant or recipient prior to contacting a third party for
14 information about the applicant or recipient.
15 Section 442.3. Eligibility Redetermination of Persons on
16 Medical Assistance.--(a) Unless the medical assistance
17 recipient is a member of the class of persons described in
18 subsection (b), the department shall make an eligibility
19 redetermination every six months.
20 (b) Persons not subject to an eligibility redetermination
21 every six months are:
22 (i) Persons receiving long-term care services.
23 (ii) Persons who are receiving medical assistance in an
24 elderly or disabled category.
25 (iii) Pregnant women.
26 (iv) Children under one year of age.
27 (v) Children living with relatives other than a parent when
28 the adult's income does not affect eligibility.
29 (vi) Children in foster care or adoption assistance
30 programs.
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1 (vii) Persons receiving Extended Medical Coverage (EMC).
2 (c) During the fiscal year beginning July 1, 2005, the
3 department shall perform eligibility determinations in
4 accordance with this section for at least 50% of the persons not
5 described in subsection (b). For fiscal years beginning after
6 June 30, 2006, the department shall perform eligibility
7 determinations for at least 95% of the persons not described in
8 subsection (b).
9 (d) Nothing in this section shall be construed to limit the
10 department in determining the number or frequency of
11 redeterminations of any person on assistance.
12 Section 2. Section 443.1 of the act, amended July 15, 1976
13 (P.L.993, No.202), is amended to read:
14 Section 443.1. Medical Assistance Payments for Institutional
15 Care.--The following medical assistance payments shall be made
16 in behalf of eligible persons whose institutional care is
17 prescribed by physicians:
18 (1) [The reasonable cost of inpatient hospital care, as
19 specified by regulations of the department adopted under Title
20 XIX of the Federal Social Security Act and certified to the
21 department by the Auditor General for a bed patient on a
22 continuous twenty-four hour a day basis in a multi bed
23 accommodation of a hospital, exclusive of a hospital or distinct
24 part of a hospital wherein twenty-five percent of patients
25 remain six months or more.] Payments as determined by the
26 department for inpatient hospital care consistent with Title XIX
27 of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396 et
28 seq.). To be eligible for such payments a hospital must be
29 qualified to participate under Title XIX of the [Federal] Social
30 Security Act and have entered into a written agreement with the
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1 department regarding matters designated by the secretary as
2 necessary to efficient administration, such as hospital
3 utilization, maintenance of proper cost accounting records and
4 access to patients' records. Such efficient administration shall
5 require the department to permit participating hospitals to
6 utilize the same fiscal intermediary for this Title XIX program
7 as such hospitals use for the Title XVIII program;
8 (2) The cost of skilled nursing and intermediate nursing
9 care in State-owned geriatric centers, institutions for the
10 mentally retarded, institutions for the mentally ill, and the
11 cost of skilled and intermediate nursing care provided prior to
12 June 30, 2004, in county homes which meet the State and Federal
13 requirements for participation under Title XIX of the [Federal]
14 Social Security Act and which are approved by the department.
15 This cost in county homes shall be as specified by the
16 regulations of the department adopted under Title XIX of the
17 [Federal] Social Security Act and certified to the department by
18 the Auditor General; elsewhere the cost shall be determined by
19 the department;
20 (3) Rates on a cost-related basis established by the
21 department for skilled nursing home or intermediate care in a
22 non-public nursing home, when furnished by a nursing home
23 licensed or approved by the department and qualified to
24 participate under Title XIX of the [Federal] Social Security Act
25 and provided prior to June 30, 2004;
26 (4) [The cost of care in any mental hospital or in a public
27 tuberculosis hospital.] Payments as determined by the department
28 for inpatient psychiatric care consistent with Title XIX of the
29 Social Security Act. To be eligible for such payments a hospital
30 must be qualified to participate under Title XIX of the
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1 [Federal] Social Security Act and have entered into a written
2 agreement with the department regarding matters designated by
3 the secretary as necessary to efficient administration, such as
4 hospital utilization, maintenance of proper cost accounting
5 records and access to patients' records. Care in a private
6 mental hospital provided under the fee for service delivery
7 system shall be limited to [sixty days in a benefit period.]
8 thirty days in any fiscal year for recipients aged twenty-one
9 years or older who are eligible for medical assistance under
10 Title XIX of the Social Security Act and for recipients aged
11 twenty-one years or older who are eligible for general
12 assistance-related medical assistance. Exceptions to the thirty-
13 day limit may be granted under section 443.3. Only persons aged
14 twenty-one years or under and aged sixty-five years or older
15 shall be eligible for care in a public mental [or tuberculosis]
16 hospital. This cost shall be [the reasonable cost, as determined
17 by the department for a State institution or] as specified by
18 regulations of the department adopted under Title XIX of the
19 [Federal] Social Security Act and certified to the department by
20 the Auditor General for county and non-public institutions[.];
21 (5) On or after July 1, 2004, and until such time as
22 regulations are adopted pursuant to subclause (iii), payments to
23 county and non-public nursing facilities certified to
24 participate as providers under Title XIX of the Social Security
25 Act for nursing facility services shall be calculated and made
26 as specified in the department's regulations in effect on July
27 1, 2003, except as may be otherwise required by:
28 (i) the Commonwealth's approved Title XIX Plan for nursing
29 facility services;
30 (ii) regulations promulgated by the department pursuant to
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1 section 454; and
2 (iii) regulations promulgated by the department pursuant to
3 section 204(1)(iv) of the act of July 31, 1968 (P.L.769,
4 No.240), referred to as the Commonwealth Documents Law,
5 specifying the methods and standards which the department will
6 use to set rates and make payments for nursing facility services
7 effective July 1, 2006. Notwithstanding any other provision of
8 law, including section 814-A, the promulgation of regulations
9 under this subsection shall, until June 30, 2006, be exempt from
10 the following:
11 (A) Section 205 of the Commonwealth Documents Law.
12 (B) Section 204(b) of the act of October 15, 1980 (P.L.950,
13 No.164), known as the "Commonwealth Attorneys Act."
14 (C) The act of June 25, 1982 (P.L.633, No.181), known as the
15 "Regulatory Review Act."
16 (6) For public nursing home care provided on or after July
17 1, 2005, the department shall recognize the costs incurred by
18 county nursing facilities to provide services to eligible
19 persons as medical assistance program expenditures to the extent
20 the costs qualify for Federal matching funds and so long as the
21 costs are allowable as determined by the department and reported
22 and certified by the county nursing facilities in a form and
23 manner specified by the department. Notwithstanding this
24 paragraph, county nursing facilities shall be paid based upon
25 rates determined in accordance with paragraph (5).
26 Section 3. Section 443.3 of the act, amended November 28,
27 1973 (P.L.364, No.128), is amended to read:
28 Section 443.3. Other Medical Assistance Payments.--(a)
29 Payments on behalf of eligible persons shall be made for other
30 services, as follows:
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1 (1) Rates established by the department for outpatient
2 services as specified by regulations of the department adopted
3 under Title XIX of the [Federal] Social Security Act (49 Stat.
4 620, 42 U.S.C. § 1396 et seq.) consisting of preventive,
5 diagnostic, therapeutic, rehabilitative or palliative services;
6 furnished by or under the direction of a physician, chiropractor
7 or podiatrist, by a hospital or outpatient clinic which
8 qualifies to participate under Title XIX of the [Federal] Social
9 Security Act, to a patient to whom such hospital or outpatient
10 clinic does not furnish room, board and professional services on
11 a continuous, twenty-four hour a day basis.
12 (2) Rates established by the department for (i) other
13 laboratory and X-ray services prescribed by a physician,
14 chiropractor or podiatrist and furnished by a facility other
15 than a hospital which is qualified to participate under Title
16 XIX of the [Federal] Social Security Act, (ii) physician's
17 services consisting of professional care by a physician,
18 chiropractor or podiatrist in his office, the patient's home, a
19 hospital, a nursing [home] facility or elsewhere, (iii) the
20 first three pints of whole blood, (iv) remedial eye care, as
21 provided in Article VIII consisting of medical or surgical care
22 and aids and services and other vision care provided by a
23 physician skilled in diseases of the eye or by an optometrist
24 which are not otherwise available under this Article, (v)
25 special medical services for school children, as provided in the
26 Public School Code of 1949, consisting of medical, dental,
27 vision care provided by a physician skilled in diseases of the
28 eye or by an optometrist or surgical care and aids and services
29 which are not otherwise available under this article.
30 (3) Notwithstanding any other provision of law, for
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1 recipients aged twenty-one years or older receiving services
2 under the fee for service delivery system who are eligible for
3 medical assistance under Title XIX of the Social Security Act
4 and for recipients aged twenty-one years or older receiving
5 services under the fee for service delivery system who are
6 eligible for general assistance-related categories of medical
7 assistance, the following medically necessary services:
8 (i) Psychiatric outpatient clinic services not to exceed
9 five hours or ten one-half-hour sessions per thirty consecutive
10 day period.
11 (ii) Psychiatric partial hospitalization not to exceed five
12 hundred forty hours per fiscal year.
13 (b) The department may grant exceptions to the limits
14 specified in this section, section 443.1(4) or in the
15 department's regulations when any of the following circumstances
16 applies:
17 (1) The department determines that the recipient has a
18 serious chronic systemic illness or other serious health
19 condition and denial of the exception will jeopardize the life
20 of or result in the rapid, serious deterioration of the health
21 of the recipient.
22 (2) The department determines that granting a specific
23 exception to a limit is a cost-effective alternative for the
24 medical assistance program.
25 (3) The department determines that granting an exception to
26 a limit is necessary in order to comply with Federal law.
27 (c) The Secretary of Public Welfare shall promulgate
28 regulations pursuant to section 204(1)(iv) of the act of July
29 31, 1968 (P.L.769, No.240), referred to as the Commonwealth
30 Documents Law, to implement this section. Notwithstanding any
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1 other provision of law, the promulgation of regulations under
2 this subsection shall, until December 31, 2005, be exempt from
3 all of the following:
4 (1) Section 205 of the Commonwealth Documents Law.
5 (2) Section 204(b) of the act of October 15, 1980 (P.L.950,
6 No.164), known as the "Commonwealth Attorneys Act."
7 (3) The act of June 25, 1982 (P.L.633, No.181), known as the
8 "Regulatory Review Act."
9 Section 4. Section 443.6(b) of the act, amended June 16,
10 1994 (P.L.319, No.49), is amended to read:
11 Section 443.6. Reimbursement for Certain Medical Assistance
12 Items and Services.--* * *
13 (b) Payment for the following medical assistance items and
14 services shall be made only after prior authorization has been
15 secured:
16 (1) Prostheses and orthoses.
17 (2) Purchase of appliances or equipment if the appliance or
18 equipment costs more than [one hundred dollars ($100).] six
19 hundred dollars ($600): Provided, however, That the department
20 may require prior authorization for the purchase of specific
21 appliances or equipment that cost less than six hundred dollars
22 ($600).
23 (3) Rental of medical appliances or equipment for a period
24 in excess of [three months.] six months: Provided, however, That
25 the department may require prior authorization for the rental of
26 medical appliances or equipment for a period of less than six
27 months.
28 (4) Oxygen and related equipment in the home unless a
29 physician states that the physical surroundings in the home are
30 suitable for the use of oxygen and that the recipient is
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1 adequately prepared and able to use the equipment.
2 (5) Dental services as the department may provide, including
3 but not necessarily limited to, dental prostheses and
4 appliances. [, extractions related to dental prostheses and
5 appliances, and other extractions as may be provided by
6 department regulations.]
7 (6) Orthopedic shoes or other supportive devices for the
8 feet when such shoes or devices are prescribed by a physician
9 for the purpose of correcting or otherwise treating
10 abnormalities of the feet or legs which cause serious
11 detrimental medical effects.
12 (7) Other items or services as the department may authorize
13 by publication of notice in the Pennsylvania Bulletin.
14 * * *
15 Section 5. Section 447 of the act is amended by adding a
16 subsection to read:
17 Section 447. Relatives' Responsibility; Repayment.--* * *
18 (c) The custodial parents of a dependent child under
19 eighteen years of age who is disabled as defined by section 1611
20 of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1382) and
21 who is not receiving benefits pursuant to Title XVI of the
22 Social Security Act (42 U.S.C. § 1381 et seq.) shall be required
23 to verify their income as a condition of eligibility of the
24 child.
25 Section 6. The act is amended by adding sections to read:
26 Section 454. Medical Assistance Benefit Packages; Coverage,
27 Copayments, Premiums and Rates.--(a) Notwithstanding any other
28 provision of law to the contrary, the department shall
29 promulgate regulations as provided in subsection (b) to
30 establish provider payment rates; the benefit packages and any
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1 copayments for adults eligible for medical assistance under
2 Title XIX of the Social Security Act (49 Stat 620, 42 U.S.C. §
3 1396 et seq.) and adults eligible for medical assistance in
4 general assistance-related categories; and the premium
5 requirements for disabled children whose family income is above
6 two hundred percent of the Federal poverty income limit. The
7 regulations shall authorize and describe the available benefit
8 packages and any copayments and premiums. The regulations shall
9 also specify the effective date for provider payment rates.
10 (b) For purposes of implementing this section, and
11 notwithstanding any other provision of law, including section
12 814-A of this act, the secretary shall promulgate regulations
13 pursuant to section 204(1)(iv) of the act of July 31, 1968
14 (P.L.769, No.240), referred to as the Commonwealth Documents
15 Law, which shall, until December 31, 2005, be exempt from all of
16 the following acts:
17 (1) Section 205 of the Commonwealth Documents Law.
18 (2) Section 204(b) of the act of October 15, 1980 (P.L.950,
19 No.164), known as the "Commonwealth Attorneys Act."
20 (3) The act of June 25, 1982 (P.L.633, No.181), known as the
21 "Regulatory Review Act."
22 (c) The department is authorized to grant exceptions to any
23 limits specified in the benefit packages adopted under this
24 section or when any of the following circumstances applies:
25 (1) The department determines the recipient has a serious
26 chronic systemic illness or other serious health condition and
27 denial of the exception will jeopardize the life of or result in
28 the rapid, serious deterioration of the health of the recipient.
29 (2) The department determines that granting a specific
30 exception to a limit is a cost-effective alternative for the
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1 medical assistance program.
2 (3) The department determines that granting an exception to
3 a limit is necessary in order to comply with Federal law.
4 (d) As used in this section:
5 "Adult" means recipients twenty-one years of age or older,
6 except when in relation to copayments, for which the term means
7 recipients eighteen years of age or older.
8 "Benefit packages" means the list of items and services
9 covered by medical assistance, including any limitations on
10 covered items and services.
11 Section 455. Definitions of Limited Applicability.--The
12 following words and phrases when used in sections 456 and 457
13 shall have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Commonwealth pharmacy program" means any of the following:
16 the Medical Assistance Fee for Service Program, the General
17 Assistance Fee for Service Program, PACE, PACENET, the Special
18 Pharmaceutical Benefit Program in the Department of Public
19 Welfare, the End Stage Renal Program in the Department of
20 Health, the Public Employees Benefit Trust Fund, the Children's
21 Health Insurance Program, the Workers' Compensation Program, the
22 Department of Corrections and any other pharmacy program
23 administered by the Commonwealth that is recognized by the
24 Centers for Medicare and Medicaid as a State Pharmaceutical
25 Assistance Program. The term shall not include managed care
26 organizations under contract with the department.
27 "Least expensive" means the lowest cost to the Commonwealth
28 within each Commonwealth pharmacy program. The net cost shall
29 include the amount paid by the Commonwealth to a pharmacy for a
30 drug under the current retail pharmacy reimbursement formula
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1 less any discounts or rebates, including those invoiced during
2 the previous calendar quarter and inclusive of all dispensing
3 fees.
4 "Manufacturer" means an entity which is engaged in any of the
5 following:
6 (1) The production, preparation, propagation, compounding,
7 conversion or processing of prescription drug products directly
8 or indirectly by extraction from substances of natural origin,
9 independently by means of chemical synthesis or by a combination
10 of extraction and chemical synthesis.
11 (2) The packaging, repackaging, labeling or relabeling or
12 distribution of prescription drug products. The term shall also
13 include the entity holding legal title to or possession of the
14 national drug code number for the covered prescription drug. The
15 term does not include a wholesale distributor of drugs,
16 drugstore chain organization or retail pharmacy licensed by the
17 Commonwealth.
18 "National drug code number" means the identifying drug number
19 maintained by the Food and Drug Administration. The complete 11-
20 digit number must include the labeler code, product code and
21 package size code.
22 Section 456. Rebates.--(a) Any Commonwealth pharmacy
23 program that requires a manufacturer to remit a rebate to the
24 program as a condition of participation shall have a clearly
25 defined remittance procedure. The procedure shall include a
26 process for the efficient collection of rebates that are not in
27 dispute and a dispute resolution process.
28 (b) The development of the remittance procedure shall
29 include consideration of the feasibility of a uniform procedure
30 among Commonwealth pharmacy programs.
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1 (c) A surcharge penalty may be levied by any Commonwealth
2 pharmacy program against any manufacturer for the collection of
3 past due rebates that are not in dispute, unless the surcharge
4 is prohibited by Federal law. The penalty may be levied on any
5 rebate more than one year past due. The surcharge shall be in
6 addition to any interest and penalties authorized under existing
7 law or contractual agreement and shall be equal to fifteen
8 percent of the principal owed for each year that the rebate is
9 past due. The calculation of the surcharge shall be prorated for
10 any portion of the year that the rebate is past due. Notice
11 shall be provided to the manufacturer prior to applying the
12 surcharge to any past due manufacturer's rebates. The
13 manufacturer shall be provided with thirty days from the date of
14 the notice to satisfy any past due claims.
15 Section 457. Pharmacy Management Systems.--(a) Each
16 Commonwealth pharmacy program shall develop and implement:
17 (1) an online claims adjudication system; and
18 (2) a uniform, coordinated and standardized auditing
19 procedure. Nothing shall preclude the implementation of
20 successful systems and auditing procedures utilized in an
21 existing Commonwealth pharmacy program.
22 (b) Each Commonwealth pharmacy program shall ensure that a
23 therapeutic drug utilization review system is established to
24 monitor and correct misutilization of drug therapies. The system
25 shall provide prospective and retrospective analysis of
26 potentially dangerous drug interactions, duplicative therapies,
27 maximum allowable dosing, therapy duration and drug utilization.
28 Nothing shall preclude the implementation of successful systems
29 utilized in an existing Commonwealth pharmacy program.
30 (c) Each Commonwealth pharmacy program shall ensure that a
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1 surveillance utilization review system is established to
2 monitor, identify and investigate potential drug misutilization.
3 The system shall monitor potential fraud and abuse by enrollees,
4 providers and prescribers for all appropriate Commonwealth
5 pharmacy programs. Nothing shall preclude the implementation of
6 successful systems utilized in an existing Commonwealth pharmacy
7 program.
8 (d) Each Commonwealth pharmacy program shall establish a
9 procedure to ensure that, notwithstanding the provisions of the
10 act of November 24, 1976 (P.L.1163, No.259), referred to as the
11 Generic Equivalent Drug Law, a brand name product shall be
12 dispensed and not substituted with an A-rated generic
13 therapeutically equivalent drug if it is the least expensive
14 alternative for the specific Commonwealth pharmacy program.
15 Section 458. Enrollment Limitation.--Upon enrollment in a
16 managed care plan, an eligible person who retains eligibility
17 shall maintain enrollment in the managed care plan for not less
18 than twelve months unless a waiver is granted by the department.
19 Section 459. Established Drug Regimens.--When determining
20 prior authorization criteria for a preferred drug class, the
21 department shall consider the potential destabilizing effect on
22 the recipient's health by any change in the recipient's
23 established drug regimen including, but not limited to,
24 prescription drugs for human immunodeficiency virus (HIV),
25 acquired immune deficiency syndrome (AIDS), behavioral health,
26 hemophilia, hepatitis C, biologic drugs, immunosuppressants and
27 anticonvulsants.
28 Section 7. Section 472 of the act, amended July 9, 1976
29 (P.L.543, No.132), is amended to read:
30 Section 472. Other Computations Affecting Counties.--To
20050H1168B2560 - 22 -
1 compute for each month the amount expended as medical assistance
2 for public nursing home care on behalf of persons at each public
3 medical institution operated by a county, county institution
4 district or municipality and the amount expended in each county
5 for aid to families with dependent children on behalf of
6 children in foster family homes or child-caring institutions,
7 plus the cost of administering such assistance. From such total
8 amount the department shall deduct the amount of Federal funds
9 properly received or to be received by the department on account
10 of such expenditures, and shall certify the remainder increased
11 or decreased, as the case may be, by any amount by which the sum
12 certified for any previous month differed from the amount which
13 should have been certified for such previous month, and by the
14 proportionate share of any refunds of such assistance, to each
15 appropriate county, county institution district or municipality.
16 The amounts so certified shall become obligations of such
17 counties, county institution districts or municipalities to be
18 paid to the department for assistance: Provided, however, That
19 [for the fiscal year 1976-77, the obligations of the counties
20 shall be the amounts so certified representing aid to dependent
21 children foster care as computed above and three-fourths of the
22 amount so certified above for public nursing home care: And
23 provided further, That for fiscal year 1977-78 and thereafter,
24 the obligations of counties shall be the amounts so certified
25 representing aid to dependent children foster care as computed
26 above plus one-half of the amount so certified above for public
27 nursing home care: And provided further, That for the fiscal
28 year 1978-79, the obligations of the counties shall be the
29 amounts so certified representing aid to dependent children
30 foster care as computed above plus one-quarter of the amount so
20050H1168B2560 - 23 -
1 certified above for public nursing home care: And provided
2 further, That] for fiscal year 1979-80 and thereafter, the
3 obligations of the counties shall be the amounts so certified
4 representing aid to dependent children foster care as computed
5 above plus one-tenth of the amount so certified above for public
6 nursing home care[.]: And provided further, That as to public
7 nursing home care, for fiscal year 2005-2006 and thereafter, the
8 obligations of the counties shall be the amount so certified
9 above, less nine-tenths of the non-Federal share of payments
10 made by the department during the fiscal year to county homes
11 for public nursing care at rates established in accordance with
12 section 443.1(5).
13 Section 7.1. Section 1402(d) of the act, added July 10, 1980
14 (P.L.493, No.105), is amended and the section is amended by
15 adding a subsection to read:
16 Section 1402. Special Provider Participation Requirements.--
17 * * *
18 (d) Each [skilled] nursing facility [or intermediate care
19 facility] shall maintain a complete and accurate record of all
20 receipts and disbursements for medical assistance recipients'
21 personal funds and shall furnish each such patient a quarterly
22 report of all transactions recorded for that recipient.
23 (e) Each nursing facility shall be inspected at least twice
24 annually for compliance with this act and regulations of the
25 department.
26 Section 8. Section 1409(b)(7) and (8) of the act, added July
27 10, 1980 (P.L.493, No.105), are amended to read:
28 Section 1409. Third Party Liability.--* * *
29 (b) * * *
30 (7) In the event of judgment [or], award or settlement in a
20050H1168B2560 - 24 -
1 suit or claim against such third party or insurer:
2 (i) If the action or claim is prosecuted by the beneficiary
3 alone, the court or agency shall first order paid from any
4 judgment or award the reasonable litigation expenses, as
5 determined by the court, incurred in preparation and prosecution
6 of such action or claim, together with reasonable attorney's
7 fees, when an attorney has been retained. After payment of such
8 expenses and attorney's fees the court or agency shall, on the
9 application of the department, allow as a first lien against the
10 amount of such judgment or award, the amount of the
11 [department's] expenditures for the benefit of the beneficiary
12 under the medical assistance program[, as provided in subsection
13 (d)].
14 (ii) If the action or claim is prosecuted both by the
15 beneficiary and the department, the court or agency shall first
16 order paid from any judgment or award, the reasonable litigation
17 expenses incurred in preparation and prosecution of such action
18 or claim, together with reasonable attorney's fees based solely
19 on the services rendered for the benefit of the beneficiary.
20 After payment of such expenses and attorney's fees, the court or
21 agency shall apply out of the balance of such judgment or award
22 an amount of benefits paid on behalf of the beneficiary under
23 the medical assistance program.
24 (iii) With respect to claims against third parties for the
25 cost of medical assistance services delivered through a managed
26 care organization contract, the department shall recover the
27 actual payment to the hospital or other medical provider for the
28 service. If no specific payment is identified by the managed
29 care organization for the service, the department shall recover
30 its fee schedule amount for the service.
20050H1168B2560 - 25 -
1 (8) [The court or agency shall, upon further application at
2 any time before the judgment or award is satisfied, allow as a
3 further lien] Upon application of the department, the court or
4 agency shall allow a lien against any third party payment or
5 trust fund resulting from a judgment, award or settlement in the
6 amount of any expenditures [of the department] in payment of
7 additional benefits arising out of the same cause of action or
8 claim provided on behalf of the beneficiary under the medical
9 assistance program, [where] when such benefits were provided or
10 became payable subsequent to the [original order] date of the
11 judgment, award or settlement.
12 * * *
13 Section 9. The act is amended by adding sections to read:
14 Section 1413. Data Matching.--(a) All entities providing
15 health insurance or health care coverage to individuals residing
16 within this Commonwealth shall provide such information on
17 coverage and benefits as the department may specify, for any
18 recipient of medical assistance or child support services
19 identified by the department by name and either policy number or
20 Social Security number.
21 (b) All entities providing health insurance or health care
22 coverage to individuals residing within this Commonwealth shall
23 receive, process and pay claims for reimbursement submitted by
24 the department with respect to medical assistance recipients who
25 have coverage for such claims.
26 (c) To the maximum extent permitted by Federal law, and
27 notwithstanding any policy or plan provision to the contrary, a
28 claim by the department for reimbursement of medical assistance
29 shall be deemed timely filed with the entity providing health
30 insurance or health care coverage if it is filed as follows:
20050H1168B2560 - 26 -
1 (1) within five years of the date of service for all dates
2 of service occurring on or before June 30, 2007; or
3 (2) within three years of the date of service for all dates
4 of service occurring on or after July 1, 2007.
5 (d) The department is authorized to enter into agreements
6 with entities providing health insurance and health care
7 coverage for the purpose of carrying out the provisions of this
8 section. The agreement shall provide for the electronic exchange
9 of data between the parties at a mutually agreed upon frequency,
10 but no less than once every two months, and may also allow for
11 payment of a fee by the department to the entity providing
12 health insurance or health care coverage.
13 (e) Following notice and hearing, the department may impose
14 a penalty of up to one thousand dollars ($1,000) per violation
15 upon any entity that willfully fails to comply with the
16 obligations imposed by this section.
17 (f) This section shall apply to every entity providing
18 health insurance or health care coverage within this
19 Commonwealth, including, but not limited to, plans, policies,
20 contracts or certificates issued by:
21 (1) A stock insurance company incorporated for any of the
22 purposes set forth in section 202(c) of the act of May 17, 1921
23 (P.L.682, No.284), known as "The Insurance Company Law of 1921."
24 (2) A mutual insurance company incorporated for any of the
25 purposes set forth in section 202(d) of "The Insurance Company
26 Law of 1921."
27 (3) A professional health services plan corporation as
28 defined in 40 Pa.C.S. Ch. 63 (relating to professional health
29 services plan corporations).
30 (4) A health maintenance organization as defined in the act
20050H1168B2560 - 27 -
1 of December 29, 1972 (P.L.1701, No.364), known as the "Health
2 Maintenance Organization Act."
3 (5) A fraternal benefit society as defined in section 2403
4 of "The Insurance Company Law of 1921."
5 (6) A person who sells or issues contracts or certificates
6 of insurance which meet the requirements of this act.
7 (7) A hospital plan corporation as defined in 40 Pa.C.S. Ch.
8 61 (relating to hospital plan corporations).
9 (8) Health care plans subject to the Employee Retirement
10 Income Security Act of 1974 (Public Law 93-406, 88 Stat. 829) to
11 the maximum extent permitted by Federal law.
12 Section 1414. Special Needs Trusts.--(a) A special needs
13 trust must be approved by a court of competent jurisdiction if
14 required by rules of court.
15 (b) A special needs trust shall comply with all of the
16 following:
17 (1) The beneficiary shall be an individual under the age of
18 sixty-five who is disabled, as that term is defined in Title XVI
19 of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1381 et
20 seq).
21 (2) The beneficiary shall have special needs that will not
22 be met without the trust.
23 (3) The trust shall provide:
24 (i) That all distributions from the trust must be for the
25 sole benefit of the beneficiary.
26 (ii) That any expenditure from the trust must have a
27 reasonable relationship to the needs of the beneficiary.
28 (iii) That upon the death of the beneficiary, or upon the
29 earlier termination of the trust, the department and any other
30 state that provided medical assistance to the beneficiary must
20050H1168B2560 - 28 -
1 be reimbursed from the funds remaining in the trust up to an
2 amount equal to the total medical assistance paid on behalf of
3 the beneficiary before any other claimant is paid: Provided,
4 however, That in the case of an account in a pooled trust, the
5 trust shall provide that no more than fifty percent of the
6 amount remaining in the beneficiary's pooled trust account may
7 be retained by the trust without any obligation to reimburse the
8 department.
9 (4) The department, upon review of the trust, must determine
10 that the trust conforms to the requirements of Title XIX of the
11 Social Security Act (42 U.S.C. § 1396 et seq.), this section,
12 any other State law and any regulations or statements of policy
13 adopted by the department to implement this section.
14 (c) If at any time it appears that any of the requirements
15 of subsection (b) are not satisfied or the trustee refuses
16 without good cause to make payments from the trust for the
17 special needs of the beneficiary, and provided that the
18 department or any other public agency in this Commonwealth has a
19 claim against trust property, the department or other public
20 agency may petition the court for an order terminating the
21 trust.
22 (d) Before the funding of a special needs trust, all liens
23 and claims in favor of the department for repayment of cash and
24 medical assistance shall first be satisfied.
25 (e) At the death of the beneficiary or upon earlier
26 termination of the trust, the trustee shall notify and request a
27 statement of claim from the department, addressed to the
28 secretary.
29 (f) As used in this section, the following words and phrases
30 shall have the following meanings:
20050H1168B2560 - 29 -
1 "Pooled trust" means a trust subject to the act of December
2 9, 2002 (P.L.1379, No.168), known as the "Pooled Trust Act."
3 "Special needs" means those items, products or services not
4 covered by the medical assistance program, insurance or other
5 third-party liability source for which a beneficiary of a
6 special needs trust or his parents are personally liable, and
7 that can be provided to the beneficiary to increase the
8 beneficiary's quality of life, to assist in, and are related to,
9 the treatment of the beneficiary's disability. The term may
10 include medical expenses, dental expenses, nursing and custodial
11 care, psychiatric/psychological services, recreational therapy,
12 occupational therapy, physical therapy, vocational therapy,
13 durable medical needs, prosthetic devices, special
14 rehabilitative services or equipment, disability-related
15 training, education, transportation and travel expenses, dietary
16 needs and supplements, related insurance and other goods and
17 services specified by the department.
18 "Special needs trust" means a trust or an account in a pooled
19 trust that is established in compliance with this section for a
20 beneficiary who is an individual who is disabled, as such term
21 is defined in Title XVI of the Social Security Act (42 U.S.C. §
22 1382c(a)(3)), as amended, consists of assets of the individual,
23 and is established for the purpose or with the effect of
24 establishing or maintaining the beneficiary's resource
25 eligibility for medical assistance.
26 Section 1415. Health Insurance Premium Payment Program.--(a)
27 The department is authorized to purchase employe group health
28 care coverage on behalf of any medical assistance recipient
29 whenever it is cost effective to do so.
30 (b) Upon request of the department, every insurer shall
20050H1168B2560 - 30 -
1 provide the department with benefit information needed to
2 determine the eligibility of a medical assistance recipient for
3 employe group health care coverage.
4 (c) Every insurer shall honor a request for enrollment and
5 purchase of employe group health insurance submitted by the
6 department with respect to a medical assistance recipient with
7 consideration for enrollment season restrictions, but no
8 enrollment restrictions shall delay enrollment more than ninety
9 days from the date of the department's request. Once enrolled,
10 the insurer shall honor a request for disenrollment submitted by
11 the department, without imposing personal liability upon the
12 medical assistance recipient, whenever it is no longer cost
13 effective for the department to pay the premiums or when the
14 recipient is no longer eligible for medical assistance.
15 (d) The department may administratively impose a civil
16 penalty of up to one thousand dollars ($1,000) per violation
17 against any insurer who fails to comply with the requirements of
18 this section.
19 (e) This section shall apply to all such policies,
20 contracts, certificates or programs issued, renewed, modified,
21 altered, amended or reissued on or after the effective date of
22 this section.
23 (f) As used in this section, the following words and phrases
24 shall have the following meanings:
25 (1) The term "insurer" includes:
26 (i) A stock insurance company incorporated for any of the
27 purposes set forth in section 202(c) of the act of May 17, 1921
28 (P.L.682, No.284), known as "The Insurance Company Law of 1921."
29 (ii) A mutual insurance company incorporated for any of the
30 purposes set forth in section 202(d) of "The Insurance Company
20050H1168B2560 - 31 -
1 Law of 1921."
2 (iii) A professional health services plan corporation as
3 defined in 40 Pa.C.S. Ch. 63 (relating to professional health
4 services plan corporations).
5 (iv) A hospital plan corporation as defined in 40 Pa.C.S.
6 Ch. 61 (relating to hospital plan corporations).
7 (v) A fraternal benefit society as defined in 40 Pa.C.S. Ch.
8 63.
9 (vi) A health maintenance organization as defined in the
10 "Health Maintenance Organization Act."
11 (vii) Any other person who sells or issues contracts or
12 certificates of insurance.
13 (viii) A person, including an employer or third party
14 administrator, providing or administering employee group health
15 care coverage, to the maximum extent permitted by Federal law.
16 (2) The phrase "employe group health care coverage" means
17 health care coverage that the department is authorized to
18 purchase for medical assistance recipients in section 1906 of
19 the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396e).
20 Section 1416. Parity in Insurance Coverage for State-Owned
21 Psychiatric Hospitals.--(a) No insurer providing inpatient
22 psychiatric care coverage to individuals covered by that
23 insurer's plan shall deny payment to a State-owned psychiatric
24 hospital for medically necessary services provided to that
25 individual solely on the basis that the hospital is a
26 government-owned facility; has no signed provider agreement with
27 the insurer; or does not participate in the insurer's network.
28 (b) The provision of psychiatric services at a State-owned
29 psychiatric hospital shall be an assignment by operation of law
30 to the hospital of the individual's right to recover for such
20050H1168B2560 - 32 -
1 services from that individual's insurer. The department may sue
2 for and recover any amounts due from that individual's insurer.
3 (c) In determining the medical necessity of any inpatient
4 psychiatric stay at a State-owned psychiatric hospital, it shall
5 be rebuttably presumed that the patient could not be treated in
6 an alternative setting if either of the following applies:
7 (1) The stay was required by court order.
8 (2) The patient was transferred to the State-owned
9 psychiatric hospital from an acute psychiatric care facility, or
10 from an acute psychiatric care unit of a general hospital,
11 because the patient was determined medically inappropriate for
12 discharge.
13 (d) State-owned psychiatric hospitals may enter into
14 provider agreements with insurers and may accept payments under
15 such provider agreements as payment in full, excluding the
16 patient's liability for unpaid deductible and coinsurance
17 amounts. In the absence of a provider agreement, the insurer
18 shall make payment for a hospital stay at its usual rate of
19 payment to contracted psychiatric hospital providers, or in the
20 absence of such a rate, the rate that the medical assistance
21 program would pay for such care.
22 (e) The department may administratively impose a penalty of
23 up to one thousand dollars ($1,000) per violation against any
24 insurer that fails to comply with the requirements of this
25 section.
26 (f) For the purposes of this section, the term "insurer"
27 includes:
28 (1) A stock insurance company incorporated for any of the
29 purposes set forth in section 202(c) of the act of May 17, 1921
30 (P.L.682, No.284), known as "The Insurance Company Law of 1921."
20050H1168B2560 - 33 -
1 (2) A mutual insurance company incorporated for any of the
2 purposes set forth in section 202(d) of "The Insurance Company
3 Law of 1921."
4 (3) A professional health services plan corporation as
5 defined in 40 Pa.C.S. Ch. 63 (relating to professional health
6 services plan corporations).
7 (4) A hospital plan corporation as defined in 40 Pa.C.S. Ch.
8 61 (relating to hospital plan corporations).
9 (5) A fraternal benefit society as defined in 40 Pa.C.S. Ch.
10 63.
11 (6) A health maintenance organization as defined in the act
12 of December 29, 1972 (P.L.1701, No.364), known as the "Health
13 Maintenance Organization Act."
14 (7) Any other person who sells or issues contracts or
15 certificates of insurance.
16 (8) Any person, including an employer or third-party
17 administrator, providing or administering employe group health
18 care coverage, to the maximum extent permitted by Federal law.
19 Section 10. This act shall take effect immediately.
B16L67MRD/20050H1168B2560 - 34 -