PRINTER'S NO. 3566
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2173
Session of
2015
INTRODUCED BY MURT, DAVIDSON, D. MILLER, ACOSTA, BRADFORD,
V. BROWN, BULLOCK, D. COSTA, DEAN, DeLUCA, DiGIROLAMO,
FRANKEL, FREEMAN, HARPER, KAVULICH, KINSEY, LEWIS, MAHONEY,
McNEILL, ROEBUCK, ROZZI, SANTORA, TAYLOR, THOMAS, TRUITT AND
WATSON, JUNE 20, 2016
REFERRED TO COMMITTEE ON INSURANCE, JUNE 20, 2016
AN ACT
Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
act relating to insurance; amending, revising, and
consolidating the law providing for the incorporation of
insurance companies, and the regulation, supervision, and
protection of home and foreign insurance companies, Lloyds
associations, reciprocal and inter-insurance exchanges, and
fire insurance rating bureaus, and the regulation and
supervision of insurance carried by such companies,
associations, and exchanges, including insurance carried by
the State Workmen's Insurance Fund; providing penalties; and
repealing existing laws," in casualty insurance, further
providing for mental illness coverage; in benefits for
alcohol abuse and dependency, further providing for
outpatient alcohol or other drugs services; and, in health
insurance coverage parity and nondiscrimination, further
providing for adoption for Federal acts, for penalties and
for regulations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 635.1(a) and (c) of the act of May 17,
1921 (P.L.682, No.284), known as The Insurance Company Law of
1921, added December 21, 1998 (P.L.1108, No.150), are amended to
read:
Section 635.1. Mental Illness Coverage.--(a) As used in
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this section:
(1) ["Serious mental illness"] "Mental illness and alcohol
or other drug abuse and dependency" means [any of the following
mental illnesses as defined by the American Psychiatric
Association in the most recent edition of the Diagnostic and
Statistical Manual: schizophrenia, bipolar disorder, obsessive-
compulsive disorder, major depressive disorder, panic disorder,
anorexia nervosa, bulimia nervosa, schizoaffective disorder and
delusional disorder.] any condition or disorder that involves a
mental health condition or substance use disorder that falls
under any of the diagnostic categories listed in the current
edition of the mental disorders section of the current
International Statistical Classification of Diseases and Related
Health Problems or that is listed in the most recent version of
the Diagnostic and Statistical Manual of Mental Disorders.
(2) "Health insurance policy" means any group health,
sickness or accident policy or subscriber contract or
certificate issued by an entity subject to one (1) of the
following:
(i) This act.
(ii) The act of December 29, 1972 (P.L.1701, No.364), known
as the "Health Maintenance Organization Act."
(iii) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations) or 63 (relating to professional health services
plan corporations).
(3) "Nonquantitative treatment limitations" or "NQTL" means
processes, strategies, evidentiary standards or other factors
that are not expressed numerically, but otherwise limit the
scope or duration of benefits for treatment. NQTLs include, but
are not limited to:
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(i) Medical management standards limiting or excluding
benefits based on medical necessity or medical appropriateness,
or based on whether the treatment is experimental or
investigative.
(ii) Formulary design for prescription drugs.
(iii) For plans with multiple network tiers, such as
preferred providers and participating providers, network tier
design.
(iv) Standards for provider admission to participate in a
network, including reimbursement rates.
(v) Plan methods for determining usual, customary and
reasonable charges.
(vi) Refusal to pay for higher-cost therapies until it can
be shown that a lower-cost therapy is not effective.
(vii) Exclusions based on failure to complete a course of
treatment.
(viii) Restrictions based on geographic location, facility
type, provider specialty and other criteria that limit the scope
or duration of benefits for services provided under the plan or
coverage.
(ix) In-network and out-of-network geographic limitations.
(x) Limitations on inpatient services for situations where
the participant is a threat to self or others.
(xi) Exclusions for court-ordered and involuntary holds.
(xii) Experimental treatment limitations.
(xiii) Service coding.
(xiv) Exclusions for services provided by clinical social
workers.
(xv) Network adequacy.
(xvi) Provider reimbursement rates, including rates of
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reimbursement for mental health and substance use services in
primary care.
* * *
(c) Health insurance policies covered under this section
shall provide coverage for [serious] mental illnesses and
alcohol or other drug abuse and dependency that meet at a
minimum the following standards:
(1) coverage for [serious] mental illnesses and alcohol or
other drug abuse and dependency shall include at least thirty
(30) inpatient and sixty (60) outpatient days annually;
(2) a person covered under such policies 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 [serious] mental
illnesses and alcohol or other drug abuse and dependency and any
other illnesses;
(4) there shall be no difference in cost-sharing
arrangements, including, but not limited to, deductibles and
copayments for coverage of [serious] mental illnesses[, shall
not prohibit access to care. The department shall set up a
method to determine whether any cost-sharing arrangements
violate this subsection.] and alcohol or other drug abuse and
dependency and for coverage of any other illnesses; and
(5) a health insurance policy may not impose an NQTL with
respect to a mental illness or 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 processes,
strategies, evidentiary standards or other factors used in
applying the NQTL to mental illness or alcohol or other drug
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abuse and dependency benefits in the classification are
comparable to, and are applied no more stringently than, the
processes, strategies, evidentiary standards or other factors
used in applying the NQTL with respect to medical or surgical
benefits in the same classification.
* * *
Section 2. Section 605-A of the act, amended December 22,
1989 (P.L.755, No.106), is amended to read:
Section 605-A. Outpatient Alcohol or Other Drug Services.--
(a) Minimal additional treatment as a covered benefit under
this article shall be provided in a facility appropriately
licensed by the Department of Health as an alcoholism or drug
addiction treatment program. 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) The following services shall be covered under this
section:
(1) Physician, 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.
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(c) Treatment under this section shall be covered as
required by this act for a minimum of thirty outpatient, full-
session visits or equivalent partial visits per year. Treatment
may be subject to a lifetime limit, for any covered individual,
of one hundred and twenty outpatient, full-session visits or
equivalent partial visits.
(d) In addition, treatment under this section shall be
covered as required by this act for a minimum of thirty separate
sessions of outpatient or partial hospitalization services per
year, which may be exchanged on a two-to-one basis to secure up
to fifteen additional non-hospital, residential alcohol
treatment days.
(e) 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.
(f) 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 such 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.
Section 3. Sections 604-B, 605-B(b) and 606-B of the act,
added March 22, 2010 (P.L.147, No.14), are amended to read:
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Section 604-B. Adoption of and compliance with Federal acts.
(a) General rule.--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 will also comply in accordance with the Final Rules for
"Medicaid Program; Deadline for Access Monitoring Review Plan
Submissions" contained 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
within each classification of benefits as the denominator and
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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
written and in operation, to medical and surgical benefits.
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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.
(6) The rates of and reasons for denial of claims for
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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 Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008 (Public Law 110-343, 122 Stat.
3881), and any amendments thereto, and Federal guidelines or
regulations issued under those acts, 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.
(c) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Nonquantitative treatment limitations" or "NQTL."
Processes, strategies, evidentiary standards or other factors
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that are not expressed numerically, but otherwise limit the
scope or duration of benefits for treatment. The term includes,
but is not limited to:
(1) Medical management standards limiting or excluding
benefits based on medical necessity or medical
appropriateness, or based on whether the treatment is
experimental or investigative.
(2) Formulary design for prescription drugs.
(3) For plans with multiple network tiers, such as
preferred providers and participating providers, network tier
design.
(4) Standards for provider admission to participate in a
network, including reimbursement rates.
(5) Plan methods 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) Exclusions based on failure to complete a course of
treatment.
(8) Restrictions based on geographic location, facility
type, provider specialty and other criteria that limit the
scope or duration of benefits for services provided under the
plan or coverage.
(9) In-network and out-of-network geographic
limitations.
(10) Limitations on inpatient services for situations
where the participant is a threat to self or others.
(11) Exclusions for court-ordered and involuntary holds.
(12) Experimental treatment limitations.
(13) Service coding.
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(14) Exclusions for services provided by clinical social
workers.
(15) Network adequacy.
(16) Provider reimbursement rates, including rates of
reimbursement for mental health and substance use services in
primary care.
Section 605-B. Penalties.
* * *
[(b) Limitation.--Penalties imposed against a person under
this article and under section 5 of the act of June 25, 1997
(P.L.295, No.29), known as the Pennsylvania Health Care
Insurance Portability Act, shall not exceed $500,000 in the
aggregate during a single calendar year.]
Section 606-B. Regulations and regulatory implementation.
(a) Regulations.--The department may promulgate such
regulations as may be necessary or appropriate to carry out this
article.
(b) Implementation of Federal act.--The department shall
implement and enforce applicable provisions of the Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008 (Public Law 110-343, 122 Stat. 3881) and
Federal guidelines or regulations issued under those acts,
including 45 CFR Pts. 146 (relating to regulations for the group
health insurance market) and 147 (relating to health insurance
reform regulations 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
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group health insurance policies.
(3) Accepting, evaluating and responding to complaints
regarding such 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
policies, including, but not limited to, reviews of network
adequacy, reimbursement rates, denials and prior
authorizations.
(c) Report.--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. The
report and presentation shall:
(1) 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).
(2) Cover the methodology the department is using to
check for compliance with sections 601-A, 602-A, 603-A, 604-
A, 605-A, 606-A, 607-A, 608-A and 635.1.
(3) 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:
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(i) The number of market conduct examinations
initiated and completed.
(ii) The benefit classifications examined by each
market conduct examination.
(iii) The subject matter of each market conduct
examination, including quantitative and nonquantitative
treatment limitations.
(iv) A summary of the basis for the final decision
rendered in each market conduct examination.
(v) Individually identifiable information shall be
excluded from the reports consistent with Federal privacy
protections.
(4) Detail any educational or corrective actions the
regulatory agency has taken to ensure insurer compliance with
MHPAEA, 42 U.S.C. 18031(j) and sections 601-A, 602-A, 603-A,
604-A, 605-A, 606-A, 607-A, 608-A, and 635.1.
(5) 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.
(6) The report must be written in nontechnical, readily
understandable language and shall be made available to the
public by, among such other means as the department finds
appropriate, posting the report on the department's publicly
accessible Internet website.
(d) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in
this subsection unless the context clearly indicates
otherwise:
"Nonquantitative treatment limitations" or "NQTL."
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Processes, strategies, evidentiary standards or other factors
that are not expressed numerically, but otherwise limit the
scope or duration of benefits for treatment. The term includes,
but is not limited to:
(1) Medical management standards limiting or excluding
benefits based on medical necessity or medical
appropriateness, or based on whether the treatment is
experimental or investigative.
(2) Formulary design for prescription drugs.
(3) For plans with multiple network tiers, such as
preferred providers and participating providers, network tier
design.
(4) Standards for provider admission to participate in a
network, including reimbursement rates.
(5) Plan methods 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) Exclusions based on failure to complete a course of
treatment.
(8) Restrictions based on geographic location, facility
type, provider specialty and other criteria that limit the
scope or duration of benefits for services provided under the
plan or coverage.
(9) In-network and out-of-network geographic
limitations.
(10) Limitations on inpatient services for situations
where the participant is a threat to self or others.
(11) Exclusions for court-ordered and involuntary holds.
(12) Experimental treatment limitations.
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(13) Service coding.
(14) Exclusions for services provided by clinical social
workers.
(15) Network adequacy.
(16) Provider reimbursement rates, including rates of
reimbursement for mental health and substance use services in
primary care.
"Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008" or "MHPAEA." The Paul Wellstone
and Pete Domenici Mental Health Parity and Addiction Equity Act
of 2008 (Public Law 110-343, 122 Stat. 3881).
Section 4. This act shall take effect immediately.
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