PRINTER'S NO. 397
No. 364 Session of 1987
INTRODUCED BY MICHLOVIC, McVERRY, DAWIDA, KUKOVICH, VAN HORNE,
ARTY, MURPHY, COWELL, TIGUE, TRELLO, PISTELLA, NAHILL, ITKIN,
MRKONIC, LASHINGER, STEIGHNER, JOSEPHS, STABACK, J. TAYLOR,
SHOWERS, CLYMER, WAMBACH, DeLUCA, MORRIS, FOX, HALUSKA, BOOK,
GAMBLE, JOHNSON, PRESTON, KOSINSKI, CAWLEY, J. L. WRIGHT,
BOYES, MARKOSEK, DOMBROWSKI, CALTAGIRONE, MAIALE, HOWLETT,
REBER, OLIVER, HAGARTY, OLASZ, WIGGINS, FREEMAN, COLAFELLA,
BUNT, SAURMAN, MICOZZIE, GEIST, SEVENTY, LINTON, VEON,
LEVDANSKY, DURHAM, E. Z. TAYLOR, CORNELL, WOZNIAK, FISCHER,
BORTNER AND PETRARCA, FEBRUARY 23, 1987
REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 23, 1987
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," authorizing stock insurers to
12 establish more than one class or series of shares and to
13 permit different voting rights according to the class of
14 shares; requiring coverage benefits for the treatment of
15 mental disorders; and adding a sunset provision.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
19 as The Insurance Company Law of 1921, is amended by adding an
20 article to read:
1 ARTICLE VI-B.
2 BENEFITS FOR THE TREATMENT OF MENTAL DISORDERS
3 Section 601-B. Definitions.--As used in this article the
4 following words and phrases shall have the meanings given to
5 them in this section:
6 "Inpatient services." The provision of medically or
7 psychologically necessary therapeutic services twenty-four hours
8 a day in a treatment facility according to individualized
9 treatment plans by or under the direct supervision of a licensed
10 physician or licensed psychologist.
11 "Mental disorder." A syndrome of clinically significant
12 behavioral, biological or psychological abnormalities that
13 result in painful symptoms (distress) or impairment, or both, in
14 one or more areas of functioning (disability). In the resulting
15 disability, there is a clinically significant behavioral,
16 biological or psychological dysfunction which is not primarily
17 in the relationship between the individual and society. Mental
18 disorders included under this definition are:
19 (1) Acute, chronic or recurrent disorders. Those disorders
20 exclusively identified as organic mental disorders,
21 schizophrenic disorders, paranoid disorders, other psychotic
22 disorders, affective disorders (bipolar disorders and recurrent
23 major depression), as described in the current edition of the
24 Diagnostic and Statistical Manual of Mental Disorders of the
25 American Psychiatric Association.
26 (2) Other mental, emotional and behavioral disorders. Those
27 disorders described in the current edition of the Diagnostic and
28 Statistical Manual of Mental Disorders of the American
29 Psychiatric Association, which are not included within the
30 definitions of acute, chronic or recurrent mental disorders or
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1 conditions not attributed to mental, emotional or behavioral
2 disorders. Current and long-term dysfunction that causes either
3 significant impairment in social or occupational function or
4 significant emotional distress.
5 (3) Conditions not attributable to mental, emotional or
6 behavioral disorders. Those conditions described in the V codes
7 of the current edition of the Diagnostic and Statistical Manual
8 of Mental Disorders of the American Psychiatric Association.
9 "Outpatient services." A nonresidential treatment modality
10 which is provided on an ambulatory basis to patients with mental
11 disorders and includes psychiatric, psychological or social
12 services carried out by or under the direct supervision of a
13 licensed physician or licensed psychologist, according to an
14 individualized treatment plan.
15 "Partial hospitalization services." The provision of
16 medically or psychologically necessary therapeutic services to
17 patients according to an individualized treatment plan performed
18 by or under the direct supervision of a licensed physician or
19 licensed psychologist. It is designed for patients with moderate
20 to severe mental disorders. Partial hospitalization patients
21 require less than twenty-four hours care, but more intensive and
22 comprehensive services than are offered in outpatient care.
23 Partial hospitalization is provided on a planned and regularly
24 scheduled basis for a minimum of three hours but less than
25 twenty-four hours in any one day.
26 "Treatment facility." A facility licensed by the Department
27 of Health or the Department of Public Welfare.
28 Section 602-B. Policy Coverages and Options.--(a) All group
29 health or sickness or accident insurance policies providing
30 hospital or medical or surgical coverage and all group
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1 subscriber contracts or certificates issued by any entity
2 subject to this act, to 40 Pa.C.S. Ch. 61 (relating to hospital
3 plan corporations) or Ch. 63 (relating to professional health
4 services plan corporations), the act of December 29, 1972
5 (P.L.1701, No.364), known as the "Health Maintenance
6 Organization Act," or the act of July 29, 1977 (P.L.105, No.38),
7 known as the "Fraternal Benefit Society Code," providing
8 hospital or medical/surgical coverage, shall in addition to
9 other provisions required by this act include within the
10 coverage those benefits for the treatment of mental, emotional
11 and behavioral disorders provided in sections 603-B, 604-B and
12 605-B.
13 (b) The benefits specified in subsection (a) may be provided
14 through a combination of such policies, contracts or
15 certificates.
16 (c) The benefits specified in subsection (a) may be provided
17 through prospective payment plans.
18 (d) The provisions of subsection (a) shall not apply to
19 Medicare or Medicaid supplemental contracts or limited coverage
20 accident and sickness policies, such as, but not limited to,
21 cancer insurance, polio insurance, dental care and similar
22 policies as may be identified as exempt from this section by the
23 Insurance Commissioner.
24 Section 603-B. Benefits for Acute, Chronic or Recurrent
25 Mental Disorders.--Inpatient, partial hospitalization and
26 outpatient treatment of acute, chronic or recurrent mental
27 disorders shall be covered by benefits no less favorable than
28 those provided for physical illness until twenty per centum
29 (20%) of the medical benefit provided by the insurer or health
30 plan carrier or one hundred thousand dollars ($100,000) has been
19870H0364B0397 - 4 -
1 utilized, whichever is lower.
2 Section 604-B. Benefits for Other Mental, Emotional and
3 Behavioral Disorders.--Inpatient, partial hospitalization and
4 outpatient treatment of other mental, emotional and behavioral
5 disorders shall be covered by benefits no less favorable than
6 those provided for physical illness until ten per centum (10%)
7 of the medical benefit provided by the insurer or health plan
8 carrier or fifty thousand dollars ($50,000) has been utilized,
9 whichever is lower.
10 Section 605-B. Benefits for Conditions not Attributable to a
11 Mental, Emotional or Behavioral Disorder.--Inpatient, partial
12 hospitalization and outpatient treatment for conditions not
13 attributable to a mental, emotional or behavioral disorder may
14 be subject to reasonable deductible or copayment plans, or both,
15 after approved by the Insurance Commissioner.
16 Section 606-B. Limitation of Benefits.--(a) Covered
17 benefits for the treatment of mental disorders in insurance
18 policies subject to this act shall be limited to those services
19 certified as medically or psychologically necessary by a
20 licensed physician or licensed psychologist.
21 (b) Covered benefits, as set forth in this act, shall be
22 subject to professional utilization and peer review procedures.
23 (c) All treatment occurring after the first five days on
24 which such services are delivered in any calendar year shall be
25 covered by an individualized treatment plan which is subject to
26 prospective and concurrent utilization and peer review. A
27 treatment plan shall contain an organized set of services to be
28 provided to an individual patient based on that patient's needs
29 and selected as appropriate for that patient. The treatment plan
30 shall be designed to provide a balanced set of services which
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1 emphasize, as appropriate, progressively less intensive or
2 restrictive treatment.
3 (d) In no instance shall the covered benefits cumulatively
4 exceed the maximum established in section 603-B.
5 (e) The criteria for renewability of lifetime maximum
6 benefits shall be the same as those for benefits for physical
7 illness.
8 Section 607-B. Eligibility to Receive Reimbursement.--Those
9 eligible to receive reimbursement for services provided during
10 the treatment of the conditions defined above include:
11 (a) Treatment facilities licensed by the Department of
12 Health or the Department of Public Welfare.
13 (b) Individuals who are:
14 (1) Licensed physicians or licensed psychologists.
15 (2) Other currently licensed health care professionals with
16 training and experience in the provision of treatment of mental
17 disorders.
18 Section 608-B. Rules and Regulations.--The Insurance
19 Commissioner, in consultation with the Secretary of Health and
20 the Commissioner of Professional and Occupational Affairs shall
21 jointly promulgate those rules and regulations as are deemed
22 necessary for the effective implementation and operation of this
23 article.
24 Section 609-B. Preservation of Certain Benefits.--(a) No
25 policy, contract or benefit plan of health insurance shall
26 reduce or eliminate the amount, duration or level of health care
27 insurance issued or in effect on January 1, 1986, unless any
28 such reduction or other change is equally applicable to all
29 conditions covered under the policy.
30 (b) Nothing in this act shall prevent the offering or
19870H0364B0397 - 6 -
1 acceptance of benefits which exceed the minimum benefits
2 required in this act.
3 Section 2. The requirements imposed by Article VI-B of the
4 act shall not be applicable to coverage provided by any plan or
5 insurer for employees, pursuant to a policy or contract or under
6 a collective bargaining agreement entered into prior to January
7 1, 1987, but shall apply only to plans or insurance policies
8 entered into, amended or renewed on or after that date or after
9 the expiration of any applicable collective bargaining agreement
10 entered into prior to that date, whichever occurs later.
11 Section 3. The Insurance Department shall be subject to the
12 act of December 22, 1981 (P.L.508, No.142), known as the Sunset
13 Act, on the same basis as agencies specified in that act for
14 reestablishment or termination by December 31, 1987.
15 Section 4. This act shall take effect immediately.
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