HOUSE AMENDED PRIOR PRINTER'S NO. 89 PRINTER'S NO. 2082
No. 91 Session of 1997
INTRODUCED BY HOLL, JANUARY 21, 1997
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, JUNE 9, 1998
AN ACT 1 Amending the act of June 5, 1968 (P.L.140, No.78), entitled "An <-- 2 act regulating the writing, cancellation of or refusal to 3 renew policies of automobile insurance; and imposing powers 4 and duties on the Insurance Commissioner therefor," further 5 providing for cancellation or refusal to renew and for review 6 procedures and policy termination. 7 AMENDING THE ACT OF MAY 17, 1921 (P.L.682, NO.284), ENTITLED "AN <-- 8 ACT RELATING TO INSURANCE; AMENDING, REVISING, AND 9 CONSOLIDATING THE LAW PROVIDING FOR THE INCORPORATION OF 10 INSURANCE COMPANIES, AND THE REGULATION, SUPERVISION, AND 11 PROTECTION OF HOME AND FOREIGN INSURANCE COMPANIES, LLOYDS 12 ASSOCIATIONS, RECIPROCAL AND INTER-INSURANCE EXCHANGES, AND 13 FIRE INSURANCE RATING BUREAUS, AND THE REGULATION AND 14 SUPERVISION OF INSURANCE CARRIED BY SUCH COMPANIES, 15 ASSOCIATIONS, AND EXCHANGES, INCLUDING INSURANCE CARRIED BY 16 THE STATE WORKMEN'S INSURANCE FUND; PROVIDING PENALTIES; AND 17 REPEALING EXISTING LAWS," PROVIDING FOR AUTOMOBILE INSURANCE 18 ISSUANCE, RENEWAL, CANCELLATION AND REFUSAL; PROVIDING FOR 19 QUALITY HEALTH CARE ACCOUNTABILITY AND PROTECTION, FOR 20 RESPONSIBILITIES OF MANAGED CARE PLANS, FOR DISCLOSURE, FOR 21 UTILIZATION REVIEW, FOR COMPLAINTS AND GRIEVANCES, FOR 22 DEPARTMENTAL POWERS AND DUTIES AND FOR PENALTIES; PROVIDING 23 FOR COMPREHENSIVE HEALTH CARE FOR UNINSURED CHILDREN; AND 24 MAKING REPEALS. 25 The General Assembly of the Commonwealth of Pennsylvania 26 hereby enacts as follows: 27 Section 1. Section 5(1) of the act of June 5, 1968 (P.L.140, <--
1 No.78), entitled "An act regulating the writing, cancellation of 2 or refusal to renew policies of automobile insurance; and 3 imposing powers and duties on the Insurance Commissioner 4 therefor," amended July 14, 1988 (P.L.546, No.97), is amended to 5 read: 6 Section 5. No cancellation or refusal to renew by an insurer 7 of a policy of automobile insurance shall be effective unless 8 the insurer shall deliver or mail, to the named insured at the 9 address shown in the policy a written notice of the cancellation 10 or refusal to renew. Such notice shall: 11 (1) Be [approved as to form by the Insurance Commissioner 12 prior to use] in a form acceptable to the Insurance 13 Commissioner; 14 * * * 15 Section 2. Sections 8 and 9 of the act, amended October 5, 16 1978 (P.L.1060, No.248), are amended to read: 17 Section 8. (a) Any insured may within [twenty] thirty days 18 of the receipt by the insured of notice of cancellation or 19 notice of intention not to renew, and of the receipt of the 20 reason or reasons for the cancellation or refusal to renew as 21 stated in the notice, request in writing to the Insurance 22 Commissioner that [he] the commissioner review the action of the 23 insurer in cancelling or refusing to renew the policy of such 24 insured. 25 (b) Any applicant for a policy who is refused such policy by 26 an insurer shall be given a written notice of refusal to write 27 by the insurer. Such notice shall state the specific reason or 28 reasons of the insurer for refusal to write a policy for the 29 applicant. Within [twenty] thirty days of the receipt of such 30 reasons, the applicant may request in writing to the Insurance 19970S0091B2082 - 2 -
1 Commissioner that [he] the commissioner review the action of the 2 insurer in refusing to write a policy for the applicant. 3 Section 9. (a) On receipt of a request for review [or if as 4 a result of investigation, the Insurance Commissioner has good 5 cause to believe that an insurer is violating the act], the 6 Insurance Commissioner [or his designated representative] shall 7 notify the insurer [thereof and shall] that a review has been 8 requested. The commissioner shall review the matter to determine 9 whether the cancellation or refusal to renew or to write was in 10 violation of this act, and shall within forty days of the 11 receipt of such request either order the policy written or 12 reinstated or uphold the cancellation or refusal to renew. [If 13 either of the parties shall dispute the commissioner's findings, 14 such party shall have the right to a formal hearing. In the 15 event a hearing is requested, the commissioner shall immediately 16 issue notice of said hearing which shall state the time and 17 place for hearing which shall not be less than thirty days from 18 the date of the notice.] 19 (b) [At the time and place fixed for the hearing in the 20 notice, the parties shall have an opportunity to be heard and to 21 show cause why an order should not be made by the commissioner 22 to cease and desist from acts constituting a violation of this 23 act.] After a review of a cancellation of or refusal to renew a 24 policy, if the commissioner finds the insurer not to be in 25 violation of this act, the policy shall remain in effect until 26 the date referred to in clause (2) of section 5, or thirty days 27 following the conclusion of the review provided for in 28 subsection (a), whichever is later. Provided, however, for 29 review of cancellations under clause (1) of section 4, the 30 policy shall terminate as of the date provided in the notice 19970S0091B2082 - 3 -
1 under clause (2) of section 5 unless the policy is reinstated. 2 Nothing in this subsection shall be construed to prevent the 3 insurer, at its discretion, from continuing coverage after the 4 initial review period until such time as the commissioner has 5 issued a final order. 6 (c) [Upon good cause shown, the commissioner shall permit 7 any person to intervene, appear and be heard at the hearing, in 8 person or by counsel.] After review of a cancellation of or 9 refusal to renew a policy, if the commissioner finds the insurer 10 to be in violation of this act, and the insurer requests a 11 hearing pursuant to subsection (d), the policy shall remain in 12 effect until such time as the commissioner has issued a final 13 order. 14 (d) [The commissioner may administer oaths, examine and 15 cross-examine witnesses, receive oral and documentary evidence 16 and subpoena witnesses, compel their attendance and require the 17 production of books, papers, records, or other documents which 18 he deems relevant to the hearing. The commissioner shall cause a 19 record to be kept of all evidence and all proceedings at the 20 hearing.] If either of the parties shall dispute the 21 commissioner's findings, that party shall have the right to a 22 formal hearing. In the event a hearing is requested, the 23 commissioner shall issue notice of the hearing, which shall 24 state the time and place for the hearing which shall not be less 25 than thirty days from the date of notice. 26 (e) [Following the hearing, the commissioner shall issue a 27 written order resolving the factual issues presented at the 28 hearing and stating what remedial action, if any, is required. 29 The commissioner shall send a copy of the order to the persons 30 participating in the hearing. In the case of a cancellation of 19970S0091B2082 - 4 -
1 or refusal to renew a policy, said policy shall remain in effect 2 until the conclusion of such review or the date referred to in 3 clause (2) of section 5, whichever is later, except for review 4 of cancellations under clause (1) of section 4 in which case the 5 policy shall terminate as of the date provided in the notice 6 under clause (2) of section 5 unless the cancellation or refusal 7 to renew is upheld or the policy reinstated.] At the time and 8 place fixed for the hearing in the notice, the parties shall 9 have an opportunity to be heard. 10 (f) Upon good cause shown, the commissioner shall permit any 11 person to intervene, appear and be heard at the hearing, in 12 person or by counsel. 13 (g) The commissioner may administer oaths, examine and 14 cross-examine witnesses, receive oral and documentary evidence 15 and subpoena witnesses, compel their attendance and require the 16 production of books, papers, records or other documents which he 17 deems relevant to the hearing. The commissioner shall cause a 18 record to be kept of all evidence and all proceedings at the 19 hearings. 20 (h) The insurer shall bear the burden at the hearing to 21 prove that the cancellation or refusal to renew complies with 22 this act. However, if the insured requested the hearing, and 23 fails to appear at the time and place for the hearing, the 24 commissioner may consider a motion to dismiss and shall not be 25 compelled to take evidence at the scheduled hearing. In addition 26 to any remedy in subsection (i), the commissioner shall have the 27 authority to order an insurer to cease and desist from acts 28 constituting a violation of this act. 29 (i) Following the hearing, the commissioner shall issue a 30 written order resolving the factual issues presented at the 19970S0091B2082 - 5 -
1 hearing and stating what remedial action, if any, is required. 2 If the commissioner finds that the cancellation or refusal to 3 renew violates this act, then the remedial action ordered by the 4 commissioner shall include at least one of the following: 5 (1) That the insurer reimburse the insured for any increase 6 in the cost of insurance and any short-term cancellation fees 7 which are incurred. 8 (2) That the insurer reinstate the original policy 9 prospectively. 10 (3) That if an insurer has elected to continue coverage 11 pursuant to subsection (b), the coverage shall remain in full 12 force and effect under the terms of the policy. 13 Reimbursement shall be in the amount incurred by the insured to 14 secure replacement coverage during the pendency of the hearing 15 process, which cost exceeds the cost which would have been 16 incurred had the policy under review remained in effect. The 17 reimbursement shall be based on the difference of the cost of 18 the policies to the extent that the coverage and limits of the 19 replacement coverage does not exceed the original coverage. The 20 insured shall bear the burden to request reimbursement and prove 21 any increase in the cost of insurance. In addition, if a 22 prospective reinstatement of the original policy is ordered, 23 then the reinstatement shall take effect on the next policy 24 anniversary date, unless the insured requests that the 25 reinstatement take effect at an earlier date. 26 (j) The commissioner shall send a copy of the order to the 27 parties participating in the hearing. 28 (k) All of the actions which may be performed by the 29 commissioner in this section may be performed by the 30 commissioner's designated representative. 19970S0091B2082 - 6 -
1 Section 3. This act shall take effect in 60 days. 2 SECTION 1. THE ACT OF MAY 17, 1921 (P.L.682, NO.284), KNOWN <-- 3 AS THE INSURANCE COMPANY LAW OF 1921, IS AMENDED BY ADDING 4 ARTICLES TO READ: 5 ARTICLE XX. 6 AUTOMOBILE INSURANCE ISSUANCE, RENEWAL, 7 CANCELLATION AND REFUSAL. 8 SECTION 2001. DEFINITIONS.--AS USED IN THIS ARTICLE THE 9 FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO 10 THEM IN THIS SECTION: 11 "COMMISSIONER." THE INSURANCE COMMISSIONER OF THIS 12 COMMONWEALTH. 13 "INSURER." AN INSURANCE COMPANY, ASSOCIATION OR EXCHANGE 14 AUTHORIZED TO TRANSACT THE BUSINESS OF AUTOMOBILE INSURANCE IN 15 THIS COMMONWEALTH. 16 "NONPAYMENT OF PREMIUM." FAILURE OF THE NAMED INSURED TO 17 DISCHARGE WHEN DUE ANY OBLIGATION IN CONNECTION WITH THE PAYMENT 18 OF PREMIUMS ON A POLICY OR ANY INSTALLMENT OF SUCH PREMIUM, 19 WHETHER THE PREMIUM IS PAYABLE DIRECTLY TO THE INSURER OR ITS 20 AGENT OR INDIRECTLY UNDER ANY PREMIUM FINANCE PLAN OR EXTENSION 21 OR CREDIT. 22 "POLICY OF AUTOMOBILE INSURANCE" OR "POLICY." A POLICY 23 DELIVERED OR ISSUED FOR DELIVERY IN THIS COMMONWEALTH INSURING A 24 NATURAL PERSON AS NAMED INSURED OR ONE OR MORE RELATED 25 INDIVIDUALS RESIDENT OF THE SAME HOUSEHOLD, AND UNDER WHICH THE 26 INSURED VEHICLES THEREIN DESIGNATED ARE OF THE FOLLOWING TYPES 27 ONLY: 28 (I) A MOTOR VEHICLE OF THE PRIVATE PASSENGER OR STATION 29 WAGON TYPE THAT IS NOT USED AS A PUBLIC OR LIVERY CONVEYANCE FOR 30 PASSENGERS AND IS NOT RENTED TO OTHERS; OR 19970S0091B2082 - 7 -
1 (II) ANY OTHER FOUR-WHEEL MOTOR VEHICLE WITH A GROSS WEIGHT 2 NOT EXCEEDING NINE THOUSAND POUNDS WHICH IS NOT PRINCIPALLY USED 3 IN THE OCCUPATION, PROFESSION OR BUSINESS OF THE INSURED OTHER 4 THAN FARMING. 5 "RENEWAL" OR "TO RENEW." TO ISSUE AND DELIVER AT THE END OF 6 AN INSURANCE POLICY PERIOD A POLICY WHICH SUPERSEDES A POLICY 7 PREVIOUSLY ISSUED AND DELIVERED BY THE SAME INSURER AND WHICH 8 PROVIDES TYPES AND LIMITS OF COVERAGE AT LEAST EQUAL TO THOSE 9 CONTAINED IN THE POLICY BEING SUPERSEDED, OR TO ISSUE AND 10 DELIVER A CERTIFICATE OR NOTICE EXTENDING THE TERM OF A POLICY 11 BEYOND ITS POLICY PERIOD OR TERM WITH TYPES AND LIMITS OF 12 COVERAGE AT LEAST EQUAL TO THOSE CONTAINED IN THE POLICY BEING 13 EXTENDED: PROVIDED, HOWEVER, THAT ANY POLICY WITH A POLICY 14 PERIOD OR TERM OF LESS THAN TWELVE (12) MONTHS OR ANY PERIOD 15 WITH NO FIXED EXPIRATION DATE SHALL FOR THE PURPOSE OF THIS 16 ARTICLE BE CONSIDERED AS IF WRITTEN FOR SUCCESSIVE POLICY 17 PERIODS OR TERMS OF TWELVE (12) MONTHS. 18 SECTION 2002. APPLICABILITY.--(A) THIS ARTICLE SHALL APPLY 19 ONLY TO: 20 (1) THAT PORTION OF A POLICY OF AUTOMOBILE INSURANCE 21 PROVIDING BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 22 COMPREHENSIVE AND COLLISION COVERAGES; AND 23 (2) TO THE POLICY'S PROVISIONS, IF ANY, RELATING TO MEDICAL 24 PAYMENTS AND UNINSURED MOTORISTS COVERAGE. 25 (B) THIS ARTICLE SHALL NOT APPLY TO: 26 (1) ANY POLICY ISSUED UNDER AN AUTOMOBILE ASSIGNED RISK 27 PLAN; 28 (2) ANY POLICY INSURING MORE THAN FOUR AUTOMOBILES; OR 29 (3) ANY POLICY COVERING GARAGE, AUTOMOBILE SALES AGENCY 30 REPAIR SHOP, SERVICE STATION OR PUBLIC PARKING PLACE OPERATION 19970S0091B2082 - 8 -
1 HAZARDS. 2 (C) NOTHING IN THIS ARTICLE SHALL APPLY: 3 (1) IF THE INSURER HAS MANIFESTED ITS WILLINGNESS TO RENEW 4 BY ISSUING OR OFFERING TO ISSUE A RENEWAL POLICY, CERTIFICATE OR 5 OTHER EVIDENCE OF RENEWAL, OR HAS MANIFESTED SUCH INTENTION BY 6 ANY OTHER MEANS. 7 (2) IF THE NAMED INSURED HAS DEMONSTRATED BY SOME OVERT 8 ACTION TO THE INSURER OR ITS AGENT THAT HE WISHES THE POLICY TO 9 BE CANCELLED OR THAT HE DOES NOT WISH THE POLICY TO BE RENEWED. 10 (3) TO ANY POLICY OF AUTOMOBILE INSURANCE WHICH HAS BEEN IN 11 EFFECT LESS THAN SIXTY (60) DAYS, UNLESS IT IS A RENEWAL POLICY, 12 EXCEPT THAT NO INSURER SHALL DECLINE TO CONTINUE IN FORCE SUCH A 13 POLICY OF AUTOMOBILE INSURANCE ON THE BASIS OF THE GROUNDS SET 14 FORTH IN SECTION 2003(A) AND EXCEPT THAT IF AN INSURER CANCELS A 15 POLICY OF AUTOMOBILE INSURANCE IN THE FIRST SIXTY (60) DAYS, THE 16 INSURER SHALL SUPPLY THE INSURED WITH A WRITTEN STATEMENT OF THE 17 REASON FOR CANCELLATION. 18 SECTION 2003. DISCRIMINATION PROHIBITED.--(A) AN INSURER 19 MAY NOT CANCEL OR REFUSE TO WRITE OR RENEW A POLICY OF 20 AUTOMOBILE INSURANCE FOR ANY OF THE FOLLOWING REASONS: 21 (1) AGE. 22 (2) RESIDENCE OR OPERATION OF A MOTOR VEHICLE IN A SPECIFIC 23 GEOGRAPHIC AREA. 24 (3) RACE. 25 (4) COLOR. 26 (5) CREED. 27 (6) NATIONAL ORIGIN. 28 (7) ANCESTRY. 29 (8) MARITAL STATUS. 30 (9) SEX. 19970S0091B2082 - 9 -
1 (10) LAWFUL OCCUPATION (INCLUDING MILITARY SERVICE). 2 (11) THE REFUSAL OF ANOTHER INSURER TO WRITE A POLICY, OR 3 THE CANCELLATION OR REFUSAL TO RENEW AN EXISTING POLICY BY 4 ANOTHER INSURER. 5 (12) ILLNESS OR PERMANENT OR TEMPORARY DISABILITY, WHERE THE 6 INSURED CAN MEDICALLY DOCUMENT THAT SUCH ILLNESS OR DISABILITY 7 WILL NOT IMPAIR HIS ABILITY TO OPERATE A MOTOR VEHICLE. FAILURE 8 TO PROVIDE SUCH DOCUMENTATION SHALL BE PROPER REASON FOR THE 9 INSURER TO AMEND THE POLICY OF THE NAMED INSURED TO EXCLUDE SUCH 10 DISABLED INSURED FROM COVERAGE UNDER THE POLICY WHILE OPERATING 11 A MOTOR VEHICLE AFTER THE EFFECTIVE DATE OF SUCH POLICY 12 AMENDMENT, BUT SHALL NOT BE PROPER REASON TO CANCEL OR REFUSE TO 13 WRITE OR RENEW THE POLICY. NOTHING IN THIS PROVISION SHALL BE 14 CONSTRUED TO EFFECT SUCH EXCLUDED INDIVIDUAL'S ELIGIBILITY FOR 15 COVERAGE UNDER THE NAMED INSURED'S POLICY FOR ANY INJURY 16 SUSTAINED WHILE NOT OPERATING A MOTOR VEHICLE. ILLNESS, OR 17 PERMANENT OR TEMPORARY DISABILITY, ON THE PART OF ANY INSURED 18 SHALL NOT BE PROPER REASON FOR CANCELLING THE POLICY OF THE 19 NAMED INSURED. 20 (13) ANY ACCIDENT WHICH OCCURRED UNDER THE FOLLOWING 21 CIRCUMSTANCES: 22 (I) AUTOMOBILE LAWFULLY PARKED (IF THE PARKED VEHICLE ROLLS 23 FROM THE PARKED POSITION, THEN ANY SUCH ACCIDENT IS CHARGED TO 24 THE PERSON WHO PARKED THE AUTOMOBILE); 25 (II) THE APPLICANT, OWNER OR OTHER RESIDENT OPERATOR IS 26 REIMBURSED BY, OR ON BEHALF OF, A PERSON WHO IS RESPONSIBLE FOR 27 THE ACCIDENT OR HAS JUDGMENT AGAINST SUCH PERSON; 28 (III) AUTOMOBILE IS STRUCK IN THE REAR BY ANOTHER VEHICLE 29 AND THE APPLICANT OR OTHER RESIDENT OPERATOR HAS NOT BEEN 30 CONVICTED OF A MOVING TRAFFIC VIOLATION IN CONNECTION WITH THIS 19970S0091B2082 - 10 -
1 ACCIDENT; 2 (IV) OPERATOR OF THE OTHER AUTOMOBILE INVOLVED IN THE 3 ACCIDENT WAS CONVICTED OF A MOVING TRAFFIC VIOLATION AND THE 4 APPLICANT OR RESIDENT OPERATOR WAS NOT CONVICTED OF A MOVING 5 TRAFFIC VIOLATION IN CONNECTION WITH THE ACCIDENT; 6 (V) AUTOMOBILE OPERATED BY THE APPLICANT OR ANY RESIDENT 7 OPERATOR IS STRUCK BY A "HIT-AND-RUN" VEHICLE, IF THE ACCIDENT 8 IS REPORTED TO THE PROPER AUTHORITY WITHIN TWENTY-FOUR (24) 9 HOURS BY THE APPLICANT OR RESIDENT OPERATOR; 10 (VI) ACCIDENT INVOLVING DAMAGE BY CONTACT WITH ANIMALS OR 11 FOWL; 12 (VII) ACCIDENT INVOLVING PHYSICAL DAMAGE, LIMITED TO AND 13 CAUSED BY FLYING GRAVEL, MISSILES, OR FALLING OBJECTS; 14 (VIII) ACCIDENT OCCURRING WHEN USING AUTOMOBILE IN RESPONSE 15 TO ANY EMERGENCY IF THE OPERATOR OF THE AUTOMOBILE AT THE TIME 16 OF THE ACCIDENT WAS A PAID OR VOLUNTEER MEMBER OF ANY POLICE OR 17 FIRE DEPARTMENT, FIRST-AID SQUAD, OR ANY LAW ENFORCEMENT AGENCY. 18 THIS EXCEPTION DOES NOT INCLUDE AN ACCIDENT OCCURRING AFTER THE 19 AUTOMOBILE CEASES TO BE USED IN RESPONSE TO SUCH EMERGENCY; OR 20 (IX) ACCIDENTS WHICH OCCURRED MORE THAN THIRTY-SIX (36) 21 MONTHS PRIOR TO THE LATER OF THE INCEPTION OF THE INSURANCE 22 POLICY OR THE UPCOMING ANNIVERSARY DATE OF THE POLICY. 23 (14) ANY CLAIM UNDER THE COMPREHENSIVE PORTION OF THE POLICY 24 UNLESS SUCH LOSS WAS INTENTIONALLY CAUSED BY THE INSURED. 25 (B) AN INSURER MAY NOT CANCEL OR REFUSE TO RENEW A POLICY OF 26 AUTOMOBILE INSURANCE ON THE BASIS OF ONE ACCIDENT WITHIN THE 27 THIRTY-SIX (36) MONTH PERIOD PRIOR TO THE UPCOMING ANNIVERSARY 28 DATE OF THE POLICY. 29 (C) FOR A PERIOD TWELVE (12) MONTHS AFTER NOTICE OF 30 TERMINATION GIVEN TO AN AGENT: 19970S0091B2082 - 11 -
1 (1) AN INSURER MAY NOT CANCEL OR REFUSE TO RENEW EXISTING 2 POLICIES WRITTEN THROUGH THE TERMINATED AGENT BECAUSE OF SUCH 3 TERMINATION EXCEPT AS PROVIDED IN PARAGRAPH (2). 4 (2) AN INSURER MAY CANCEL OR REFUSE TO RENEW ONLY SUCH 5 POLICIES AS COULD HAVE BEEN CANCELLED OR NONRENEWED HAD THE 6 AGENCY RELATIONSHIP CONTINUED. 7 (3) AN INSURER SHALL BE OBLIGATED TO PAY COMMISSIONS FOR 8 SUCH POLICIES THAT ARE CONTINUED OR RENEWED THROUGH THE 9 TERMINATED AGENT, EXCEPT WHERE: 10 (I) THE INSURER RETAINED OWNERSHIP OF THE EXPIRATIONS OF 11 SUCH POLICIES; OR 12 (II) THE AGENT HAS MISAPPROPRIATED FUNDS OR PROPERTY OF THE 13 INSURER OR HAS FAILED TO REMIT TO THE INSURER FUNDS DUE IT 14 PROMPTLY UPON DEMAND OR HAS BEEN TERMINATED FOR INSOLVENCY, 15 ABANDONMENT, GROSS AND WILFUL MISCONDUCT OR HAS HAD HIS LICENSE 16 SUSPENDED OR REVOKED. 17 (D) SUBSEQUENT TO THE TWELVE (12) MONTH PERIOD AFTER NOTICE 18 OF TERMINATION GIVEN TO AN AGENT, AN INSURER MAY NOT CANCEL OR 19 REFUSE TO RENEW EXISTING POLICIES WRITTEN THROUGH THE TERMINATED 20 AGENT WITHOUT OFFERING EACH SUCH INSURED COVERAGE ON A DIRECT 21 BASIS OR OFFERING TO REFER THE INSURED TO ONE OR MORE NEW AGENTS 22 IN THE EVENT THE TERMINATED AGENT COULD NOT FIND A SUITABLE 23 INSURER ACCEPTABLE TO THE POLICYHOLDER FOR SUCH BUSINESS. THE 24 OFFER NEED NOT BE MADE IF THE INSURER COULD HAVE CANCELLED OR 25 NONRENEWED THE POLICY HAD THE AGENCY RELATIONSHIP CONTINUED. IF 26 THE INSURER RETAINS OWNERSHIP OF THE EXPIRATIONS OF SUCH 27 POLICIES, THE INSURER NEED NOT OFFER A NEW AGENT. 28 (E) AN INSURER MAY NOT CANCEL OR REFUSE TO RENEW A POLICY OF 29 AUTOMOBILE INSURANCE FOR TWO OR FEWER MOVING VIOLATIONS IN ANY 30 JURISDICTION OR JURISDICTIONS DURING A TWENTY-FOUR (24) MONTH 19970S0091B2082 - 12 -
1 PERIOD WHEN THE OPERATOR'S RECORD INDICATES THAT THE NAMED 2 INSURED PRESENTLY BEARS FIVE POINTS OR FEWER, UNLESS 3 (1) ALL FIVE POINTS WERE INCURRED FROM ONE VIOLATION. 4 (2) THE DRIVER'S LICENSE OR MOTOR VEHICLE REGISTRATION OF 5 THE NAMED INSURED HAS BEEN SUSPENDED OR REVOKED. 6 (3) IF, HOWEVER, THE DRIVER'S LICENSE HAS BEEN SUSPENDED 7 UNDER 75 PA.C.S. § 1533 (RELATING TO SUSPENSION OF OPERATING 8 PRIVILEGE FOR FAILURE TO RESPOND TO CITATION) AND THE INSURED IS 9 ABLE TO PRODUCE PROOF THAT HE OR SHE HAS RESPONDED TO ALL 10 CITATIONS AND PAID ALL FINES AND PENALTIES IMPOSED UNDER THAT 11 SECTION AND THAT HE OR SHE HAS DONE SO ON OR BEFORE THE 12 TERMINATION DATE OF THE POLICY, THIS SUSPENSION SHALL NOT BE 13 GROUNDS FOR CANCELLATION OR FOR REFUSAL TO RENEW. 14 (F) THE APPLICABILITY OF SUBSECTION (E) TO ONE, OTHER THAN 15 THE NAMED INSURED, WHO EITHER IS A RESIDENT IN THE SAME 16 HOUSEHOLD OR WHO CUSTOMARILY OPERATES AN AUTOMOBILE INSURED 17 UNDER THE POLICY SHALL BE PROPER REASON FOR THE INSURER TO 18 EXCLUDE THAT INDIVIDUAL FROM COVERAGE UNDER THE POLICY BUT NOT 19 FOR CANCELLING THE POLICY. 20 (G) AS USED IN SUBSECTION (E), "POINTS" SHALL MEAN POINTS AS 21 SET FORTH IN 75 PA.C.S. § 1501 (RELATING TO LICENSING OF 22 DRIVERS). 23 SECTION 2004. VALID REASONS TO CANCEL POLICY.--AN INSURER 24 MAY NOT CANCEL A POLICY EXCEPT FOR ONE OR MORE OF THE FOLLOWING 25 SPECIFIED REASONS: 26 (1) NONPAYMENT OF PREMIUM. 27 (2) THE DRIVER'S LICENSE OR MOTOR VEHICLE REGISTRATION OF 28 THE NAMED INSURED HAS BEEN UNDER SUSPENSION OR REVOCATION DURING 29 THE POLICY PERIOD; THE APPLICABILITY OF THIS REASON TO ONE WHO 30 EITHER IS A RESIDENT IN THE SAME HOUSEHOLD OR WHO CUSTOMARILY 19970S0091B2082 - 13 -
1 OPERATES AN AUTOMOBILE INSURED UNDER THE POLICY SHALL BE PROPER 2 REASON FOR THE INSURER THEREAFTER EXCLUDING SUCH INDIVIDUAL FROM 3 COVERAGE UNDER THE POLICY, BUT NOT FOR CANCELLING THE POLICY. 4 (3) A DETERMINATION THAT THE INSURED HAS CONCEALED A 5 MATERIAL FACT, OR HAS MADE A MATERIAL ALLEGATION CONTRARY TO 6 FACT, OR HAS MADE A MISREPRESENTATION OF A MATERIAL FACT AND 7 THAT SUCH CONCEALMENT, ALLEGATION OR MISREPRESENTATION WAS 8 MATERIAL TO THE ACCEPTANCE OF THE RISK BY THE INSURER. 9 SECTION 2005. POLICY PREMIUM INCREASES.--(A) AN INSURER MAY 10 NOT INCREASE AN INDIVIDUAL INSURED'S PREMIUM OR ASSESS A PREMIUM 11 SURCHARGE ON THE BASIS OF ANY MOVING TRAFFIC VIOLATION RECORDS, 12 ANY REVOCATION OR SUSPENSION RECORDS, OR ANY ACCIDENT RECORDS, 13 IF ANY OF THE FOLLOWING OCCURS: 14 (1) THE INSURED ESTABLISHES THAT THE RECORDS ARE ERRONEOUS 15 OR INACCURATE. 16 (2) THE CITATION IS IMPOSED UNDER 75 PA.C.S. § 1533 17 (RELATING TO SUSPENSION OF OPERATING PRIVILEGE FOR FAILURE TO 18 RESPOND TO CITATION) AND THE INSURED IS ABLE TO PRODUCE PROOF 19 THAT HE OR SHE HAS RESPONDED TO THE CITATION AND PAID THE FINES 20 AND PENALTIES IMPOSED UNDER THAT SECTION. AN INCREASE OR 21 SURCHARGE IMPOSED PRIOR TO THE DATE WHEN AN INSURED PROVIDES 22 THIS PROOF SHALL TERMINATE AS OF THE DATE THE INSURED RESPONDED 23 TO THE CITATION WHICH IS THE SUBJECT OF THE INCREASE OR 24 SURCHARGE. 25 (B) AT THE TIME AN INCREASE OR SURCHARGE IS APPLIED, THE 26 INSURER SHALL NOTIFY THE INSURED THAT THE INCREASE OR SURCHARGE 27 WILL BE TERMINATED IF THE INSURED IS ABLE TO PROVIDE THE INSURER 28 WITH PROOF THAT THE INSURED HAS RESPONDED TO ALL CITATIONS 29 IMPOSED UNDER 75 PA.C.S. § 1533 AND PAID ANY FINES AND PENALTIES 30 IMPOSED UNDER THAT SECTION. 19970S0091B2082 - 14 -
1 (C) ALL INSURERS SHALL PROVIDE TO INSUREDS A DETAILED 2 STATEMENT OF THE COMPONENTS OF A PREMIUM AND SHALL SPECIFICALLY 3 SHOW THE AMOUNT OF A SURCHARGE OR OTHER ADDITIONAL AMOUNT THAT 4 IS CHARGED AS A RESULT OF A CLAIM HAVING BEEN MADE UNDER A 5 POLICY OF INSURANCE OR AS A RESULT OF ANY OTHER FACTORS. 6 SECTION 2006. PROPER NOTIFICATION OF INTENTION TO CANCEL.--A 7 CANCELLATION OR REFUSAL TO RENEW BY AN INSURER OF A POLICY OF 8 AUTOMOBILE INSURANCE SHALL NOT BE EFFECTIVE UNLESS THE INSURER 9 DELIVERS OR MAILS TO THE NAMED INSURED AT THE ADDRESS SHOWN IN 10 THE POLICY A WRITTEN NOTICE OF THE CANCELLATION OR REFUSAL TO 11 RENEW. THE NOTICE SHALL: 12 (1) BE IN A FORM ACCEPTABLE TO THE INSURANCE COMMISSIONER. 13 (2) STATE THE DATE, NOT LESS THAN SIXTY (60) DAYS AFTER THE 14 DATE OF THE MAILING OR DELIVERY, ON WHICH CANCELLATION OR 15 REFUSAL TO RENEW SHALL BECOME EFFECTIVE. WHEN THE POLICY IS 16 BEING CANCELLED OR NOT RENEWED FOR THE REASONS SET FORTH IN 17 SECTION 2004(1) AND (2), HOWEVER, THE EFFECTIVE DATE MAY BE 18 FIFTEEN (15) DAYS FROM THE DATE OF MAILING OR DELIVERY. 19 (3) STATE THE SPECIFIC REASON OR REASONS OF THE INSURER FOR 20 CANCELLATION OR REFUSAL TO RENEW. 21 (4) ADVISE THE INSURED OF HIS RIGHT TO REQUEST IN WRITING, 22 WITHIN THIRTY (30) DAYS OF THE RECEIPT OF THE NOTICE OF 23 CANCELLATION OR INTENTION NOT TO RENEW AND OF THE RECEIPT OF THE 24 REASON OR REASONS FOR THE CANCELLATION OR REFUSAL TO RENEW AS 25 STATED IN THE NOTICE OF CANCELLATION OR OF INTENTION NOT TO 26 RENEW, THAT THE INSURANCE COMMISSIONER REVIEW THE ACTION OF THE 27 INSURER. 28 (5) EITHER IN THE NOTICE OR IN AN ACCOMPANYING STATEMENT 29 ADVISE THE INSURED OF HIS POSSIBLE ELIGIBILITY FOR INSURANCE 30 THROUGH THE AUTOMOBILE ASSIGNED RISK PLAN. 19970S0091B2082 - 15 -
1 (6) ADVISE THE INSURED THAT HE MUST OBTAIN COMPULSORY 2 AUTOMOBILE INSURANCE COVERAGE IF HE OPERATES OR REGISTERS A 3 MOTOR VEHICLE IN THIS COMMONWEALTH, THAT THE INSURER IS 4 NOTIFYING THE DEPARTMENT OF TRANSPORTATION THAT THE INSURANCE IS 5 BEING CANCELLED OR NOT RENEWED, AND THAT THE INSURED MUST NOTIFY 6 THE DEPARTMENT OF TRANSPORTATION THAT HE HAS REPLACED SAID 7 COVERAGE. 8 (7) CLEARLY STATE THAT, WHEN COVERAGE IS TO BE TERMINATED 9 DUE TO NONRESPONSE TO A CITATION IMPOSED UNDER 75 PA.C.S. § 1533 10 (RELATING TO SUSPENSION OF OPERATING PRIVILEGE FOR FAILURE TO 11 RESPOND TO CITATION) OR NONPAYMENT OF A FINE OR PENALTY IMPOSED 12 UNDER THAT SECTION, COVERAGE SHALL NOT TERMINATE IF THE INSURED 13 PROVIDES THE INSURER WITH PROOF THAT THE INSURED HAS RESPONDED 14 TO ALL CITATIONS AND PAID ALL FINES AND PENALTIES AND THAT HE 15 HAS DONE SO ON OR BEFORE THE TERMINATION DATE OF THE POLICY. 16 SECTION 2007. EXEMPTION FROM LIABILITY.--THERE SHALL BE NO 17 LIABILITY ON THE PART OF AND NO CAUSE OF ACTION OF ANY NATURE 18 SHALL ARISE AGAINST THE INSURANCE COMMISSIONER, ANY INSURER, THE 19 AUTHORIZED REPRESENTATIVES, AGENTS AND EMPLOYES OF EITHER OR ANY 20 FIRM, PERSON OR CORPORATION FURNISHING TO THE INSURER 21 INFORMATION AS TO REASONS FOR CANCELLATION OR REFUSAL TO WRITE 22 OR RENEW FOR ANY STATEMENT MADE BY ANY OF THEM IN COMPLYING WITH 23 THIS ACT OR FOR THE PROVIDING OF INFORMATION PERTAINING THERETO. 24 THE INSURER MUST FURNISH THE INSURED THE NOTIFICATION REQUIRED 25 BY THE FEDERAL FAIR CREDIT REPORTING ACT, 15 U.S.C. § 1601 ET 26 SEQ., WHEN SUCH CANCELLATIONS OR REFUSAL TO WRITE OR RENEW 27 OCCUR. 28 SECTION 2008. REQUEST FOR REVIEW.--(A) ANY INSURED MAY, 29 WITHIN THIRTY (30) DAYS OF THE RECEIPT BY THE INSURED OF NOTICE 30 OF CANCELLATION OR NOTICE OF INTENTION NOT TO RENEW AND OF THE 19970S0091B2082 - 16 -
1 RECEIPT OF THE REASON OR REASONS FOR THE CANCELLATION OR REFUSAL 2 TO RENEW AS STATED IN THE NOTICE, REQUEST IN WRITING TO THE 3 INSURANCE COMMISSIONER THAT THE INSURANCE COMMISSIONER REVIEW 4 THE ACTION OF THE INSURER IN CANCELLING OR REFUSING TO RENEW THE 5 POLICY OF SUCH INSURED. 6 (B) ANY APPLICANT FOR A POLICY WHO IS REFUSED A POLICY BY AN 7 INSURER SHALL BE GIVEN A WRITTEN NOTICE OF REFUSAL TO WRITE BY 8 THE INSURER. THE NOTICE SHALL STATE THE SPECIFIC REASON OR 9 REASONS OF THE INSURER FOR REFUSAL TO WRITE A POLICY FOR THE 10 APPLICANT. WITHIN THIRTY (30) DAYS OF THE RECEIPT OF SUCH 11 REASONS, THE APPLICANT MAY REQUEST IN WRITING TO THE INSURANCE 12 COMMISSIONER THAT THE INSURANCE COMMISSIONER REVIEW THE ACTION 13 OF THE INSURER IN REFUSING TO WRITE A POLICY FOR THE APPLICANT. 14 SECTION 2009. REVIEW PROCEDURE.--(A) ON RECEIPT OF A 15 REQUEST FOR REVIEW, THE INSURANCE COMMISSIONER SHALL NOTIFY THE 16 INSURER THAT A REVIEW HAS BEEN REQUESTED. THE INSURANCE 17 COMMISSIONER SHALL REVIEW THE MATTER TO DETERMINE WHETHER THE 18 CANCELLATION OR REFUSAL TO RENEW OR TO WRITE WAS IN VIOLATION OF 19 THIS ARTICLE AND SHALL, WITHIN FORTY (40) DAYS OF THE RECEIPT OF 20 SUCH REQUEST, EITHER ORDER THE POLICY WRITTEN OR REINSTATED OR 21 UPHOLD THE CANCELLATION OR REFUSAL TO RENEW. 22 (B) AFTER A REVIEW OF A CANCELLATION OF OR REFUSAL TO RENEW 23 A POLICY, IF THE INSURANCE COMMISSIONER FINDS THE INSURER NOT TO 24 BE IN VIOLATION OF THIS ARTICLE, THE POLICY SHALL REMAIN IN 25 EFFECT UNTIL THE DATE REFERRED TO IN SECTION 2006(2), OR THIRTY 26 (30) DAYS FOLLOWING THE CONCLUSION OF THE REVIEW PROVIDED FOR IN 27 SUBSECTION (A), WHICHEVER IS LATER. PROVIDED, HOWEVER, FOR 28 REVIEW OF CANCELLATIONS UNDER SECTION 2004(1), THE POLICY SHALL 29 TERMINATE AS OF THE DATE PROVIDED IN THE NOTICE UNDER SECTION 30 2006(2) UNLESS THE POLICY IS REINSTATED. NOTHING IN THIS 19970S0091B2082 - 17 -
1 SUBSECTION SHALL BE CONSTRUED TO PREVENT THE INSURER, AT ITS 2 DISCRETION, FROM CONTINUING COVERAGE AFTER THE INITIAL REVIEW 3 PERIOD UNTIL SUCH TIME AS THE INSURANCE COMMISSIONER HAS ISSUED 4 A FINAL ORDER. 5 (C) AFTER REVIEW OF A CANCELLATION OF OR REFUSAL TO RENEW A 6 POLICY, IF THE INSURANCE COMMISSIONER FINDS THE INSURER TO BE IN 7 VIOLATION OF THIS ARTICLE, AND THE INSURER REQUESTS A HEARING 8 PURSUANT TO SUBSECTION (D), THE POLICY SHALL REMAIN IN EFFECT 9 UNTIL SUCH TIME AS THE INSURANCE COMMISSIONER HAS ISSUED A FINAL 10 ORDER. 11 (D) IF EITHER OF THE PARTIES SHALL DISPUTE THE INSURANCE 12 COMMISSIONER'S FINDINGS, THAT PARTY SHALL HAVE THE RIGHT TO A 13 FORMAL HEARING. IN THE EVENT A HEARING IS REQUESTED, THE 14 INSURANCE COMMISSIONER SHALL ISSUE NOTICE OF THE HEARING, WHICH 15 SHALL STATE THE TIME AND PLACE FOR THE HEARING WHICH SHALL NOT 16 BE LESS THAN THIRTY (30) DAYS FROM THE DATE OF NOTICE. 17 (E) AT THE TIME AND PLACE FIXED FOR THE HEARING IN THE 18 NOTICE, THE PARTIES SHALL HAVE AN OPPORTUNITY TO BE HEARD. 19 (F) UPON GOOD CAUSE SHOWN, THE INSURANCE COMMISSIONER SHALL 20 PERMIT ANY PERSON TO INTERVENE, APPEAR AND BE HEARD AT THE 21 HEARING, IN PERSON OR BY COUNSEL. 22 (G) THE INSURANCE COMMISSIONER MAY ADMINISTER OATHS, EXAMINE 23 AND CROSS-EXAMINE WITNESSES, RECEIVE ORAL AND DOCUMENTARY 24 EVIDENCE AND SUBPOENA WITNESSES, COMPEL THEIR ATTENDANCE AND 25 REQUIRE THE PRODUCTION OF BOOKS, PAPERS, RECORDS OR OTHER 26 DOCUMENTS WHICH HE DEEMS RELEVANT TO THE HEARING. THE INSURANCE 27 COMMISSIONER SHALL CAUSE A RECORD TO BE KEPT OF ALL EVIDENCE AND 28 ALL PROCEEDINGS AT THE HEARINGS. 29 (H) THE INSURER SHALL BEAR THE BURDEN AT THE HEARING TO 30 PROVE THAT THE CANCELLATION OR REFUSAL TO RENEW COMPLIES WITH 19970S0091B2082 - 18 -
1 THIS ARTICLE. HOWEVER, IF THE INSURED REQUESTED THE HEARING, AND 2 FAILS TO APPEAR AT THE TIME AND PLACE FOR THE HEARING, THE 3 INSURANCE COMMISSIONER MAY CONSIDER A MOTION TO DISMISS AND 4 SHALL NOT BE COMPELLED TO TAKE EVIDENCE AT THE SCHEDULED 5 HEARING. IN ADDITION TO ANY REMEDY IN SUBSECTION (I), THE 6 INSURANCE COMMISSIONER SHALL HAVE THE AUTHORITY TO ORDER AN 7 INSURER TO CEASE AND DESIST FROM ACTS CONSTITUTING A VIOLATION 8 OF THIS ARTICLE. 9 (I) FOLLOWING THE HEARING, THE INSURANCE COMMISSIONER SHALL 10 ISSUE A WRITTEN ORDER RESOLVING THE FACTUAL ISSUES PRESENTED AT 11 THE HEARING AND STATING WHAT REMEDIAL ACTION, IF ANY, IS 12 REQUIRED. IF THE INSURANCE COMMISSIONER FINDS THAT THE 13 CANCELLATION OR REFUSAL TO RENEW VIOLATES THIS ARTICLE, THEN THE 14 REMEDIAL ACTION ORDERED BY THE INSURANCE COMMISSIONER SHALL 15 INCLUDE AT LEAST ONE OF THE FOLLOWING: 16 (1) THAT THE INSURER REIMBURSE THE INSURED FOR ANY INCREASE 17 IN THE COST OF INSURANCE AND ANY SHORT-TERM CANCELLATION FEES 18 WHICH ARE INCURRED. 19 (2) THAT THE INSURER REINSTATE THE ORIGINAL POLICY 20 PROSPECTIVELY. 21 (3) THAT IF AN INSURER HAS ELECTED TO CONTINUE COVERAGE 22 PURSUANT TO SUBSECTION (B), THE COVERAGE SHALL REMAIN IN FULL 23 FORCE AND EFFECT UNDER THE TERMS OF THE POLICY. REIMBURSEMENT 24 SHALL BE IN THE AMOUNT INCURRED BY THE INSURED TO SECURE 25 REPLACEMENT COVERAGE DURING THE PENDENCY OF THE HEARING PROCESS, 26 WHICH COST EXCEEDS THE COST WHICH WOULD HAVE BEEN INCURRED HAD 27 THE POLICY UNDER REVIEW REMAINED IN EFFECT. THE REIMBURSEMENT 28 SHALL BE BASED ON THE DIFFERENCE OF THE COST OF THE POLICIES TO 29 THE EXTENT THAT THE COVERAGE AND LIMITS OF THE REPLACEMENT 30 COVERAGE DOES NOT EXCEED THE ORIGINAL COVERAGE. THE INSURED 19970S0091B2082 - 19 -
1 SHALL BEAR THE BURDEN TO REQUEST REIMBURSEMENT AND PROVE ANY 2 INCREASE IN THE COST OF INSURANCE. IN ADDITION, IF A PROSPECTIVE 3 REINSTATEMENT OF THE ORIGINAL POLICY IS ORDERED, THEN THE 4 REINSTATEMENT SHALL TAKE EFFECT ON THE NEXT POLICY ANNIVERSARY 5 DATE, UNLESS THE INSURED REQUESTS THAT THE REINSTATEMENT TAKE 6 EFFECT AT AN EARLIER DATE. 7 (J) THE INSURANCE COMMISSIONER SHALL SEND A COPY OF THE 8 ORDER TO THE PARTIES PARTICIPATING IN THE HEARING. 9 (K) ALL OF THE ACTIONS WHICH MAY BE PERFORMED BY THE 10 INSURANCE COMMISSIONER IN THIS SECTION MAY BE PERFORMED BY THE 11 INSURANCE COMMISSIONER'S DESIGNATED REPRESENTATIVE. 12 SECTION 2010. REGULATIONS.--(A) THE INSURANCE COMMISSIONER 13 SHALL PROMULGATE RULES AND REGULATIONS NECESSARY FOR THE 14 ADMINISTRATION OF THIS ARTICLE. 15 (B) THE INSURANCE COMMISSIONER MAY PROVIDE IN SUCH RULES AND 16 REGULATIONS FOR THE ESTABLISHMENT OF A FILING FEE NOT EXCEEDING 17 FIFTEEN DOLLARS ($15) TO ACCOMPANY THE REQUEST FOR REVIEW. 18 SHOULD THE INSURANCE COMMISSIONER DECIDE THE APPEAL IN FAVOR OF 19 THE INSURED, THE FILING FEE SHALL BE RETURNED IMMEDIATELY AND 20 THE FEE SHALL BE PAID BY THE INSURER. NO PART OF THE REVIEW BY 21 THE INSURANCE COMMISSIONER SHALL BE SUBJECT TO THE PROVISIONS OF 22 2 PA.C.S. §§ 501 THROUGH 508 (RELATING TO PRACTICE AND PROCEDURE 23 OF COMMONWEALTH AGENCIES). 24 SECTION 2011. APPEAL.--(A) THE DECISION OF THE INSURANCE 25 COMMISSIONER SHALL BE SUBJECT TO APPEAL IN ACCORDANCE WITH 2 26 PA.C.S. §§ 701 THROUGH 704 (RELATING TO JUDICIAL REVIEW OF 27 COMMONWEALTH AGENCY ACTION), BUT THE COURT HEARING AN APPEAL 28 SHALL NOT DECLINE TO AFFIRM A DECISION ON THE GROUND THAT THE 29 REQUIREMENTS OF 2 PA.C.S. §§ 501 THROUGH 508 WERE NOT FULFILLED. 30 (B) UPON A DETERMINATION THAT THIS ARTICLE HAS BEEN 19970S0091B2082 - 20 -
1 VIOLATED, THE INSURANCE COMMISSIONER MAY ISSUE AN ORDER 2 REQUIRING THE INSURER TO CEASE AND DESIST FROM ENGAGING IN SUCH 3 VIOLATION. 4 (C) WHENEVER A VIOLATOR FAILS TO COMPLY WITH AN ORDER OF THE 5 INSURANCE COMMISSIONER TO CEASE AND DESIST FROM ENGAGING IN SUCH 6 VIOLATION, THE INSURANCE COMMISSIONER MAY CAUSE AN ACTION FOR 7 INJUNCTION TO BE FILED IN COURT REGARDLESS OF WHETHER AN INSURER 8 IS LICENSED BY THE INSURANCE COMMISSIONER. 9 SECTION 2012. INFORMATION AND REPORT.--EACH INSURER SHALL 10 MAINTAIN RECORDS OF THE NUMBERS OF CANCELLATIONS AND REFUSALS TO 11 WRITE OR RENEW POLICIES AND THE REASONS THEREFOR AND SHALL 12 SUPPLY THIS INFORMATION TO THE INSURANCE COMMISSIONER UPON HIS 13 REQUEST. 14 SECTION 2013. PENALTY.--ANY INDIVIDUAL OR INSURER WHO 15 VIOLATES ANY OF THE PROVISIONS OF THIS ARTICLE MAY BE SENTENCED 16 TO PAY A FINE NOT TO EXCEED FIVE THOUSAND DOLLARS ($5,000). 17 ARTICLE XXI. 18 QUALITY HEALTH CARE ACCOUNTABILITY AND PROTECTION. 19 (A) PRELIMINARY PROVISIONS 20 SECTION 2101. SCOPE.--THIS ARTICLE GOVERNS QUALITY HEALTH 21 CARE ACCOUNTABILITY AND PROTECTION. 22 SECTION 2102. DEFINITIONS.--AS USED IN THIS ARTICLE THE 23 FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO 24 THEM IN THIS SECTION: 25 "ACTIVE CLINICAL PRACTICE." THE PRACTICE OF CLINICAL 26 MEDICINE BY A HEALTH CARE PROVIDER FOR AN AVERAGE OF NOT LESS 27 THAN TWENTY (20) HOURS PER WEEK. 28 "ANCILLARY SERVICE PLANS." ANY INDIVIDUAL OR GROUP HEALTH 29 INSURANCE PLAN, SUBSCRIBER CONTRACT OR CERTIFICATE THAT PROVIDES 30 EXCLUSIVE COVERAGE FOR DENTAL SERVICES OR VISION SERVICES. THE 19970S0091B2082 - 21 -
1 TERM ALSO INCLUDES MEDICARE SUPPLEMENT POLICIES SUBJECT TO 2 SECTION 1882 OF THE SOCIAL SECURITY ACT (49 STAT. 620, 42 U.S.C. 3 § 1395SS) AND THE CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE 4 UNIFORMED SERVICES (CHAMPUS) SUPPLEMENT. 5 "CLEAN CLAIM." A CLAIM FOR PAYMENT FOR A HEALTH CARE SERVICE 6 WHICH HAS NO DEFECT OR IMPROPRIETY. A DEFECT OR IMPROPRIETY 7 SHALL INCLUDE LACK OF REQUIRED SUBSTANTIATING DOCUMENTATION OR A 8 PARTICULAR CIRCUMSTANCE REQUIRING SPECIAL TREATMENT WHICH 9 PREVENTS TIMELY PAYMENT FROM BEING MADE ON THE CLAIM. THE TERM 10 SHALL NOT INCLUDE A CLAIM FROM A HEALTH CARE PROVIDER WHO IS 11 UNDER INVESTIGATION FOR FRAUD OR ABUSE REGARDING THAT CLAIM. 12 "COMPLAINT." A DISPUTE OR OBJECTION REGARDING A 13 PARTICIPATING HEALTH CARE PROVIDER OR THE COVERAGE, OPERATIONS 14 OR MANAGEMENT POLICIES OF A MANAGED CARE PLAN, WHICH HAS NOT 15 BEEN RESOLVED BY THE MANAGED CARE PLAN AND HAS BEEN FILED WITH 16 THE PLAN OR WITH THE DEPARTMENT OF HEALTH OR THE INSURANCE 17 DEPARTMENT OF THE COMMONWEALTH. THE TERM DOES NOT INCLUDE A 18 GRIEVANCE. 19 "CONCURRENT UTILIZATION REVIEW." A REVIEW BY A UTILIZATION 20 REVIEW ENTITY OF ALL REASONABLY NECESSARY SUPPORTING 21 INFORMATION, WHICH OCCURS DURING AN ENROLLEE'S HOSPITAL STAY OR 22 COURSE OF TREATMENT AND RESULTS IN A DECISION TO APPROVE OR DENY 23 PAYMENT FOR THE HEALTH CARE SERVICE. 24 "DEPARTMENT." THE DEPARTMENT OF HEALTH OF THE COMMONWEALTH. 25 "DRUG FORMULARY." A LISTING OF MANAGED CARE PLAN PREFERRED 26 THERAPEUTIC DRUGS. 27 "EMERGENCY SERVICE." ANY HEALTH CARE SERVICE PROVIDED TO AN 28 ENROLLEE AFTER THE SUDDEN ONSET OF A MEDICAL CONDITION THAT 29 MANIFESTS ITSELF BY ACUTE SYMPTOMS OF SUFFICIENT SEVERITY OR 30 SEVERE PAIN, SUCH THAT A PRUDENT LAYPERSON, WHO POSSESSES AN 19970S0091B2082 - 22 -
1 AVERAGE KNOWLEDGE OF HEALTH AND MEDICINE, COULD REASONABLY 2 EXPECT THE ABSENCE OF IMMEDIATE MEDICAL ATTENTION TO RESULT IN: 3 (1) PLACING THE HEALTH OF THE ENROLLEE, OR, WITH RESPECT TO 4 A PREGNANT WOMAN, THE HEALTH OF THE WOMAN OR HER UNBORN CHILD, 5 IN SERIOUS JEOPARDY; 6 (2) SERIOUS IMPAIRMENT TO BODILY FUNCTIONS; OR 7 (3) SERIOUS DYSFUNCTION OF ANY BODILY ORGAN OR PART. 8 EMERGENCY TRANSPORTATION AND RELATED EMERGENCY SERVICE PROVIDED 9 BY A LICENSED AMBULANCE SERVICE SHALL CONSTITUTE AN EMERGENCY 10 SERVICE. 11 "ENROLLEE." ANY POLICYHOLDER, SUBSCRIBER, COVERED PERSON OR 12 OTHER INDIVIDUAL WHO IS ENTITLED TO RECEIVE HEALTH CARE SERVICES 13 UNDER A MANAGED CARE PLAN. 14 "GRIEVANCE." AS PROVIDED IN SUBARTICLE (I), A REQUEST BY AN 15 ENROLLEE OR A HEALTH CARE PROVIDER, WITH THE WRITTEN CONSENT OF 16 THE ENROLLEE, TO HAVE A MANAGED CARE PLAN OR UTILIZATION REVIEW 17 ENTITY RECONSIDER A DECISION SOLELY CONCERNING THE MEDICAL 18 NECESSITY AND APPROPRIATENESS OF A HEALTH CARE SERVICE. IF THE 19 MANAGED CARE PLAN IS UNABLE TO RESOLVE THE MATTER, A GRIEVANCE 20 MAY BE FILED REGARDING THE DECISION THAT: 21 (1) DISAPPROVES FULL OR PARTIAL PAYMENT FOR A REQUESTED 22 HEALTH CARE SERVICE; 23 (2) APPROVES THE PROVISION OF A REQUESTED HEALTH CARE 24 SERVICE FOR A LESSER SCOPE OR DURATION THAN REQUESTED; OR 25 (3) DISAPPROVES PAYMENT FOR THE PROVISION OF A REQUESTED 26 HEALTH CARE SERVICE BUT APPROVES PAYMENT FOR THE PROVISION OF AN 27 ALTERNATIVE HEALTH CARE SERVICE. 28 THE TERM DOES NOT INCLUDE A COMPLAINT. 29 "HEALTH CARE PROVIDER." A LICENSED HOSPITAL OR HEALTH CARE 30 FACILITY, MEDICAL EQUIPMENT SUPPLIER OR PERSON WHO IS LICENSED, 19970S0091B2082 - 23 -
1 CERTIFIED OR OTHERWISE REGULATED TO PROVIDE HEALTH CARE SERVICES 2 UNDER THE LAWS OF THIS COMMONWEALTH, INCLUDING A PHYSICIAN, 3 PODIATRIST, OPTOMETRIST, PSYCHOLOGIST, PHYSICAL THERAPIST, 4 CERTIFIED NURSE PRACTITIONER, REGISTERED NURSE, NURSE MIDWIFE, 5 PHYSICIAN'S ASSISTANT, CHIROPRACTOR, DENTIST, PHARMACIST OR AN 6 INDIVIDUAL ACCREDITED OR CERTIFIED TO PROVIDE BEHAVIORAL HEALTH 7 SERVICES. 8 "HEALTH CARE SERVICE." ANY COVERED TREATMENT, ADMISSION, 9 PROCEDURE, MEDICAL SUPPLIES AND EQUIPMENT, OR OTHER SERVICES, 10 INCLUDING BEHAVIORAL HEALTH, PRESCRIBED OR OTHERWISE PROVIDED OR 11 PROPOSED TO BE PROVIDED BY A HEALTH CARE PROVIDER TO AN ENROLLEE 12 UNDER A MANAGED CARE PLAN CONTRACT. 13 "MANAGED CARE PLAN." A HEALTH CARE PLAN THAT: USES A 14 GATEKEEPER TO MANAGE THE UTILIZATION OF HEALTH CARE SERVICES; 15 INTEGRATES THE FINANCING AND DELIVERY OF HEALTH CARE SERVICES TO 16 ENROLLEES BY ARRANGEMENTS WITH HEALTH CARE PROVIDERS SELECTED TO 17 PARTICIPATE ON THE BASIS OF SPECIFIC STANDARDS; AND PROVIDES 18 FINANCIAL INCENTIVES FOR ENROLLEES TO USE THE PARTICIPATING 19 HEALTH CARE PROVIDERS IN ACCORDANCE WITH PROCEDURES ESTABLISHED 20 BY THE PLAN. A MANAGED CARE PLAN INCLUDES HEALTH CARE ARRANGED 21 THROUGH AN ENTITY OPERATING UNDER ANY OF THE FOLLOWING: 22 (1) SECTION 630. 23 (2) THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), KNOWN 24 AS THE "HEALTH MAINTENANCE ORGANIZATION ACT." 25 (3) THE ACT OF DECEMBER 14, 1992 (P.L.835, NO.134), KNOWN AS 26 THE "FRATERNAL BENEFIT SOCIETIES CODE." 27 (4) 40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN 28 CORPORATIONS). 29 (5) 40 PA.C.S. CH. 63 (RELATING TO PROFESSIONAL HEALTH 30 SERVICES PLAN CORPORATIONS). 19970S0091B2082 - 24 -
1 THE TERM INCLUDES AN ENTITY, INCLUDING A MUNICIPALITY, WHETHER 2 LICENSED OR UNLICENSED, THAT CONTRACTS WITH OR FUNCTIONS AS A 3 MANAGED CARE PLAN TO PROVIDE HEALTH CARE SERVICES TO ENROLLEES. 4 THE TERM DOES NOT INCLUDE ANCILLARY SERVICE PLANS OR AN 5 INDEMNITY ARRANGEMENT WHICH IS PRIMARILY FEE FOR SERVICE. 6 "PLAN." A MANAGED CARE PLAN. 7 "PRIMARY CARE PROVIDER." A HEALTH CARE PROVIDER WHO, WITHIN 8 THE SCOPE OF THE PROVIDER'S PRACTICE: SUPERVISES, COORDINATES, 9 PRESCRIBES OR OTHERWISE PROVIDES OR PROPOSES TO PROVIDE HEALTH 10 CARE SERVICES TO AN ENROLLEE; INITIATES ENROLLEE REFERRAL FOR 11 SPECIALIST CARE; AND MAINTAINS CONTINUITY OF ENROLLEE CARE. 12 "PROSPECTIVE UTILIZATION REVIEW." A REVIEW BY A UTILIZATION 13 REVIEW ENTITY OF ALL REASONABLY NECESSARY SUPPORTING INFORMATION 14 THAT OCCURS PRIOR TO THE DELIVERY OR PROVISION OF A HEALTH CARE 15 SERVICE AND RESULTS IN A DECISION TO APPROVE OR DENY PAYMENT FOR 16 THE HEALTH CARE SERVICE. 17 "PROVIDER NETWORK." THE HEALTH CARE PROVIDERS DESIGNATED BY 18 A MANAGED CARE PLAN TO PROVIDE HEALTH CARE SERVICES. 19 "REFERRAL." A PRIOR AUTHORIZATION FROM A MANAGED CARE PLAN 20 OR A PARTICIPATING HEALTH CARE PROVIDER THAT ALLOWS AN ENROLLEE 21 TO HAVE ONE OR MORE APPOINTMENTS WITH A HEALTH CARE PROVIDER FOR 22 A HEALTH CARE SERVICE. 23 "RETROSPECTIVE UTILIZATION REVIEW." A REVIEW BY A 24 UTILIZATION REVIEW ENTITY OF ALL REASONABLY NECESSARY SUPPORTING 25 INFORMATION, WHICH OCCURS FOLLOWING DELIVERY OR PROVISION OF A 26 HEALTH CARE SERVICE AND RESULTS IN A DECISION TO APPROVE OR DENY 27 PAYMENT FOR THE HEALTH CARE SERVICE. 28 "SERVICE AREA." THE GEOGRAPHIC AREA FOR WHICH THE MANAGED 29 CARE PLAN IS LICENSED OR HAS BEEN ISSUED A CERTIFICATE OF 30 AUTHORITY. 19970S0091B2082 - 25 -
1 "SPECIALIST." A HEALTH CARE PROVIDER WHOSE PRACTICE IS NOT 2 LIMITED TO PRIMARY HEALTH CARE SERVICES AND WHO: HAS ADDITIONAL 3 POSTGRADUATE OR SPECIALIZED TRAINING; HAS BOARD CERTIFICATION; 4 OR PRACTICES IN A LICENSED SPECIALIZED AREA OF HEALTH CARE. THE 5 TERM INCLUDES A HEALTH CARE PROVIDER WHO IS NOT CLASSIFIED BY A 6 PLAN SOLELY AS A PRIMARY CARE PROVIDER. 7 "UTILIZATION REVIEW." A SYSTEM OF PROSPECTIVE, CONCURRENT OR 8 RETROSPECTIVE UTILIZATION REVIEW PERFORMED BY A UTILIZATION 9 REVIEW ENTITY OF THE MEDICAL NECESSITY AND APPROPRIATENESS OF 10 HEALTH CARE SERVICES PRESCRIBED, PROVIDED OR PROPOSED TO BE 11 PROVIDED TO AN ENROLLEE. THE TERM DOES NOT INCLUDE ANY OF THE 12 FOLLOWING: 13 (1) REQUESTS FOR CLARIFICATION OF COVERAGE, ELIGIBILITY OR 14 HEALTH CARE SERVICE VERIFICATION. 15 (2) A HEALTH CARE PROVIDER'S INTERNAL QUALITY ASSURANCE OR 16 UTILIZATION REVIEW PROCESS UNLESS THE REVIEW RESULTS IN DENIAL 17 OF PAYMENT FOR A HEALTH CARE SERVICE. 18 "UTILIZATION REVIEW ENTITY." ANY ENTITY CERTIFIED PURSUANT 19 TO SUBARTICLE (H) THAT PERFORMS UTILIZATION REVIEW ON BEHALF OF 20 A MANAGED CARE PLAN. 21 (B) MANAGED CARE PLAN REQUIREMENTS 22 SECTION 2111. RESPONSIBILITIES OF MANAGED CARE PLANS.--A 23 MANAGED CARE PLAN SHALL DO ALL OF THE FOLLOWING: 24 (1) ASSURE AVAILABILITY AND ACCESSIBILITY OF ADEQUATE HEALTH 25 CARE PROVIDERS IN A TIMELY MANNER, WHICH ENABLES ENROLLEES TO 26 HAVE ACCESS TO QUALITY CARE AND CONTINUITY OF HEALTH CARE 27 SERVICES. 28 (2) CONSULT WITH HEALTH CARE PROVIDERS IN ACTIVE CLINICAL 29 PRACTICE REGARDING PROFESSIONAL QUALIFICATIONS AND NECESSARY 30 SPECIALISTS TO BE INCLUDED IN THE PLAN. 19970S0091B2082 - 26 -
1 (3) ADOPT AND MAINTAIN A DEFINITION OF MEDICAL NECESSITY 2 USED BY THE PLAN IN DETERMINING HEALTH CARE SERVICES. 3 (4) ENSURE THAT EMERGENCY SERVICES ARE PROVIDED TWENTY-FOUR 4 (24) HOURS A DAY, SEVEN (7) DAYS A WEEK AND PROVIDE REASONABLE 5 PAYMENT OR REIMBURSEMENT FOR EMERGENCY SERVICES. 6 (5) ADOPT AND MAINTAIN PROCEDURES BY WHICH AN ENROLLEE CAN 7 OBTAIN HEALTH CARE SERVICES OUTSIDE THE PLAN'S SERVICE AREA. 8 (6) ADOPT AND MAINTAIN PROCEDURES BY WHICH AN ENROLLEE WITH 9 A LIFE-THREATENING, DEGENERATIVE OR DISABLING DISEASE OR 10 CONDITION SHALL, UPON REQUEST, RECEIVE AN EVALUATION, AND IF THE 11 PLAN'S ESTABLISHED STANDARDS ARE MET, BE PERMITTED TO RECEIVE: 12 (I) A STANDING REFERRAL TO A SPECIALIST WITH CLINICAL 13 EXPERTISE IN TREATING THE DISEASE OR CONDITION; OR 14 (II) THE DESIGNATION OF A SPECIALIST TO PROVIDE AND 15 COORDINATE THE ENROLLEE'S PRIMARY AND SPECIALTY CARE. 16 THE REFERRAL TO OR DESIGNATION OF A SPECIALIST SHALL BE 17 PURSUANT TO A TREATMENT PLAN APPROVED BY THE MANAGED CARE PLAN, 18 IN CONSULTATION WITH THE PRIMARY CARE PROVIDER, THE ENROLLEE, 19 AND, AS APPROPRIATE, THE SPECIALIST. WHEN POSSIBLE, THE 20 SPECIALIST MUST BE A HEALTH CARE PROVIDER PARTICIPATING IN THE 21 PLAN. 22 (7) PROVIDE DIRECT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL 23 SERVICES BY PERMITTING AN ENROLLEE TO SELECT A HEALTH CARE 24 PROVIDER PARTICIPATING IN THE PLAN TO OBTAIN MATERNITY AND 25 GYNECOLOGICAL CARE, INCLUDING MEDICALLY NECESSARY AND 26 APPROPRIATE FOLLOW-UP CARE AND REFERRALS FOR DIAGNOSTIC TESTING 27 RELATED TO MATERNITY AND GYNECOLOGICAL CARE, WITHOUT PRIOR 28 APPROVAL FROM A PRIMARY CARE PROVIDER. THE HEALTH CARE SERVICES 29 SHALL BE WITHIN THE SCOPE OF PRACTICE OF THE SELECTED HEALTH 30 CARE PROVIDER. THE SELECTED HEALTH CARE PROVIDER SHALL INFORM 19970S0091B2082 - 27 -
1 THE ENROLLEE'S PRIMARY CARE PROVIDER OF ALL HEALTH CARE SERVICES 2 PROVIDED. 3 (8) ADOPT AND MAINTAIN A COMPLAINT PROCESS AS SET FORTH IN 4 SUBARTICLE (G). 5 (9) ADOPT AND MAINTAIN A GRIEVANCE PROCESS AS SET FORTH IN 6 SUBARTICLE (I). 7 (10) ADOPT AND MAINTAIN CREDENTIALING STANDARDS FOR HEALTH 8 CARE PROVIDERS AS SET FORTH IN SUBARTICLE (D). 9 (11) ENSURE THAT THERE ARE PARTICIPATING HEALTH CARE 10 PROVIDERS THAT ARE PHYSICALLY ACCESSIBLE TO PEOPLE WITH 11 DISABILITIES AND CAN COMMUNICATE WITH INDIVIDUALS WITH SENSORY 12 DISABILITIES IN ACCORDANCE WITH TITLE III OF THE AMERICANS WITH 13 DISABILITIES ACT OF 1990 (PUBLIC LAW 101-336, 42 U.S.C. § 12181 14 ET SEQ.). 15 (12) PROVIDE A LIST OF HEALTH CARE PROVIDERS PARTICIPATING 16 IN THE PLAN TO THE DEPARTMENT EVERY TWO (2) YEARS, OR AS MAY 17 OTHERWISE BE REQUIRED BY THE DEPARTMENT. THE LIST SHALL INCLUDE 18 THE EXTENT TO WHICH HEALTH CARE PROVIDERS IN THE PLAN ARE 19 ACCEPTING NEW ENROLLEES. 20 (13) REPORT TO THE DEPARTMENT AND THE INSURANCE DEPARTMENT 21 IN ACCORDANCE WITH THE REQUIREMENTS OF THIS ARTICLE. SUCH 22 INFORMATION SHALL INCLUDE THE NUMBER, TYPE AND DISPOSITION OF 23 ALL COMPLAINTS AND GRIEVANCES FILED WITH THE PLAN. 24 SECTION 2112. FINANCIAL INCENTIVES PROHIBITION.--NO MANAGED 25 CARE PLAN SHALL USE ANY FINANCIAL INCENTIVE THAT COMPENSATES A 26 HEALTH CARE PROVIDER FOR PROVIDING LESS THAN MEDICALLY NECESSARY 27 AND APPROPRIATE CARE TO AN ENROLLEE. NOTHING IN THIS SECTION 28 SHALL BE DEEMED TO PROHIBIT A MANAGED CARE PLAN FROM USING A 29 CAPITATED PAYMENT ARRANGEMENT OR OTHER RISK-SHARING ARRANGEMENT. 30 SECTION 2113. MEDICAL GAG CLAUSE PROHIBITION.--(A) NO 19970S0091B2082 - 28 -
1 MANAGED CARE PLAN MAY PENALIZE OR RESTRICT A HEALTH CARE 2 PROVIDER FROM DISCUSSING: 3 (1) THE PROCESS THAT THE PLAN OR ANY ENTITY CONTRACTING WITH 4 THE PLAN USES OR PROPOSES TO USE TO DENY PAYMENT FOR A HEALTH 5 CARE SERVICE; 6 (2) MEDICALLY NECESSARY AND APPROPRIATE CARE WITH OR ON 7 BEHALF OF AN ENROLLEE, INCLUDING INFORMATION REGARDING THE 8 NATURE OF TREATMENT; RISKS OF TREATMENT; ALTERNATIVE TREATMENTS; 9 OR THE AVAILABILITY OF ALTERNATE THERAPIES, CONSULTATION OR 10 TESTS; OR 11 (3) THE DECISION OF ANY MANAGED CARE PLAN TO DENY PAYMENT 12 FOR A HEALTH CARE SERVICE. 13 (B) A PROVISION TO PROHIBIT OR RESTRICT DISCLOSURE OF 14 MEDICALLY NECESSARY AND APPROPRIATE HEALTH CARE INFORMATION 15 CONTAINED IN A CONTRACT WITH A HEALTH CARE PROVIDER IS CONTRARY 16 TO PUBLIC POLICY AND SHALL BE VOID AND UNENFORCEABLE. 17 (C) NO MANAGED CARE PLAN SHALL TERMINATE THE EMPLOYMENT OF 18 OR A CONTRACT WITH A HEALTH CARE PROVIDER FOR ANY OF THE 19 FOLLOWING: 20 (1) ADVOCATING FOR MEDICALLY NECESSARY AND APPROPRIATE 21 HEALTH CARE CONSISTENT WITH THE DEGREE OF LEARNING AND SKILL 22 ORDINARILY POSSESSED BY A REPUTABLE HEALTH CARE PROVIDER 23 PRACTICING ACCORDING TO THE APPLICABLE LEGAL STANDARD OF CARE. 24 (2) FILING A GRIEVANCE PURSUANT TO THE PROCEDURES SET FORTH 25 IN THIS ARTICLE. 26 (3) PROTESTING A DECISION, POLICY OR PRACTICE THAT THE 27 HEALTH CARE PROVIDER, CONSISTENT WITH THE DEGREE OF LEARNING AND 28 SKILL ORDINARILY POSSESSED BY A REPUTABLE HEALTH CARE PROVIDER 29 PRACTICING ACCORDING TO THE APPLICABLE LEGAL STANDARD OF CARE, 30 REASONABLY BELIEVES INTERFERES WITH THE HEALTH CARE PROVIDER'S 19970S0091B2082 - 29 -
1 ABILITY TO PROVIDE MEDICALLY NECESSARY AND APPROPRIATE HEALTH 2 CARE. 3 (D) NOTHING IN THIS SECTION SHALL: 4 (1) PROHIBIT A MANAGED CARE PLAN FROM MAKING A DETERMINATION 5 NOT TO PAY FOR A PARTICULAR MEDICAL TREATMENT, SUPPLY OR 6 SERVICE, ENFORCING REASONABLE PEER REVIEW OR UTILIZATION REVIEW 7 PROTOCOLS OR MAKING A DETERMINATION THAT A HEALTH CARE PROVIDER 8 HAS OR HAS NOT COMPLIED WITH APPROPRIATE PROTOCOLS. 9 (2) BE CONSTRUED AS REQUIRING A MANAGED CARE PLAN TO 10 PROVIDE, REIMBURSE FOR OR COVER COUNSELING, REFERRAL, OR OTHER 11 HEALTH CARE SERVICES IF THE PLAN: 12 (I) OBJECTS TO THE PROVISION OF THAT SERVICE ON MORAL OR 13 RELIGIOUS GROUNDS; AND 14 (II) MAKES AVAILABLE INFORMATION ON ITS POLICIES REGARDING 15 SUCH HEALTH CARE SERVICES TO ENROLLEES AND PROSPECTIVE 16 ENROLLEES. 17 (C) MEDICAL SERVICES 18 SECTION 2116. EMERGENCY SERVICES.--IF AN ENROLLEE SEEKS 19 EMERGENCY SERVICES AND THE EMERGENCY HEALTH CARE PROVIDER 20 DETERMINES THAT EMERGENCY SERVICES ARE NECESSARY, THE EMERGENCY 21 HEALTH CARE PROVIDER SHALL INITIATE NECESSARY INTERVENTION TO 22 EVALUATE AND, IF NECESSARY, STABILIZE THE CONDITION OF THE 23 ENROLLEE WITHOUT SEEKING OR RECEIVING AUTHORIZATION FROM THE 24 MANAGED CARE PLAN. THE MANAGED CARE PLAN SHALL PAY ALL 25 REASONABLY NECESSARY COSTS ASSOCIATED WITH THE EMERGENCY 26 SERVICES PROVIDED DURING THE PERIOD OF THE EMERGENCY. WHEN 27 PROCESSING A REIMBURSEMENT CLAIM FOR EMERGENCY SERVICES, A 28 MANAGED CARE PLAN SHALL CONSIDER BOTH THE PRESENTING SYMPTOMS 29 AND THE SERVICES PROVIDED. THE EMERGENCY HEALTH CARE PROVIDER 30 SHALL NOTIFY THE ENROLLEE'S MANAGED CARE PLAN OF THE PROVISION 19970S0091B2082 - 30 -
1 OF EMERGENCY SERVICES AND THE CONDITION OF THE ENROLLEE. IF AN 2 ENROLLEE'S CONDITION HAS STABILIZED AND THE ENROLLEE CAN BE 3 TRANSPORTED WITHOUT SUFFERING DETRIMENTAL CONSEQUENCES OR 4 AGGRAVATING THE ENROLLEE'S CONDITION, THE ENROLLEE MAY BE 5 RELOCATED TO ANOTHER FACILITY TO RECEIVE CONTINUED CARE AND 6 TREATMENT AS NECESSARY. 7 SECTION 2117. CONTINUITY OF CARE.--(A) EXCEPT AS PROVIDED 8 UNDER SUBSECTION (B), IF A MANAGED CARE PLAN INITIATES 9 TERMINATION OF ITS CONTRACT WITH A PARTICIPATING HEALTH CARE 10 PROVIDER, AN ENROLLEE MAY CONTINUE AN ONGOING COURSE OF 11 TREATMENT WITH THAT HEALTH CARE PROVIDER, AT THE ENROLLEE'S 12 OPTION, FOR A TRANSITIONAL PERIOD OF UP TO SIXTY (60) DAYS FROM 13 THE DATE THE ENROLLEE WAS NOTIFIED BY THE PLAN OF THE 14 TERMINATION OR PENDING TERMINATION. THE MANAGED CARE PLAN, IN 15 CONSULTATION WITH THE ENROLLEE AND THE HEALTH CARE PROVIDER, MAY 16 EXTEND THE TRANSITIONAL PERIOD IF DETERMINED TO BE CLINICALLY 17 APPROPRIATE. IN THE CASE OF AN ENROLLEE IN THE SECOND OR THIRD 18 TRIMESTER OF PREGNANCY AT THE TIME OF NOTICE OF THE TERMINATION 19 OR PENDING TERMINATION, THE TRANSITIONAL PERIOD SHALL EXTEND 20 THROUGH POSTPARTUM CARE RELATED TO THE DELIVERY. ANY HEALTH CARE 21 SERVICE PROVIDED UNDER THIS SECTION SHALL BE COVERED BY THE 22 MANAGED CARE PLAN UNDER THE SAME TERMS AND CONDITIONS AS 23 APPLICABLE FOR PARTICIPATING HEALTH CARE PROVIDERS. 24 (B) IF THE PLAN TERMINATES THE CONTRACT OF A PARTICIPATING 25 HEALTH CARE PROVIDER FOR CAUSE, INCLUDING BREACH OF CONTRACT, 26 FRAUD, CRIMINAL ACTIVITY OR POSING A DANGER TO AN ENROLLEE OR 27 THE HEALTH, SAFETY OR WELFARE OF THE PUBLIC AS DETERMINED BY THE 28 PLAN, THE PLAN SHALL NOT BE RESPONSIBLE FOR HEALTH CARE SERVICES 29 PROVIDED TO THE ENROLLEE FOLLOWING THE DATE OF TERMINATION. 30 (C) IF THE PLAN TERMINATES THE CONTRACT OF A PARTICIPATING 19970S0091B2082 - 31 -
1 PRIMARY CARE PROVIDER, THE PLAN SHALL NOTIFY EVERY ENROLLEE 2 SERVED BY THAT PROVIDER OF THE PLAN'S TERMINATION OF ITS 3 CONTRACT AND SHALL REQUEST THAT THE ENROLLEE SELECT ANOTHER 4 PRIMARY CARE PROVIDER. 5 (D) A NEW ENROLLEE MAY CONTINUE AN ONGOING COURSE OF 6 TREATMENT WITH A NONPARTICIPATING HEALTH CARE PROVIDER FOR A 7 TRANSITIONAL PERIOD OF UP TO SIXTY (60) DAYS FROM THE EFFECTIVE 8 DATE OF ENROLLMENT IN A MANAGED CARE PLAN. THE MANAGED CARE 9 PLAN, IN CONSULTATION WITH THE ENROLLEE AND THE HEALTH CARE 10 PROVIDER, MAY EXTEND THIS TRANSITIONAL PERIOD IF DETERMINED TO 11 BE CLINICALLY APPROPRIATE. IN THE CASE OF A NEW ENROLLEE IN THE 12 SECOND OR THIRD TRIMESTER OF PREGNANCY ON THE EFFECTIVE DATE OF 13 ENROLLMENT, THE TRANSITIONAL PERIOD SHALL EXTEND THROUGH 14 POSTPARTUM CARE RELATED TO THE DELIVERY. ANY HEALTH CARE SERVICE 15 PROVIDED UNDER THIS SECTION SHALL BE COVERED BY THE MANAGED CARE 16 PLAN UNDER THE SAME TERMS AND CONDITIONS AS APPLICABLE FOR 17 PARTICIPATING HEALTH CARE PROVIDERS. 18 (E) A PLAN MAY REQUIRE A NONPARTICIPATING HEALTH CARE 19 PROVIDER WHOSE HEALTH CARE SERVICES ARE COVERED UNDER THIS 20 SECTION TO MEET THE SAME TERMS AND CONDITIONS AS A PARTICIPATING 21 HEALTH CARE PROVIDER. 22 (F) NOTHING IN THIS SECTION SHALL REQUIRE A MANAGED CARE 23 PLAN TO PROVIDE HEALTH CARE SERVICES THAT ARE NOT OTHERWISE 24 COVERED UNDER THE TERMS AND CONDITIONS OF THE PLAN. 25 (D) PROVIDER CREDENTIALING 26 SECTION 2121. PROCEDURES.--(A) A MANAGED CARE PLAN SHALL 27 ESTABLISH A CREDENTIALING PROCESS TO ENROLL QUALIFIED HEALTH 28 CARE PROVIDERS AND CREATE AN ADEQUATE PROVIDER NETWORK. THE 29 PROCESS SHALL BE APPROVED BY THE DEPARTMENT AND SHALL INCLUDE 30 WRITTEN CRITERIA AND PROCEDURES FOR INITIAL ENROLLMENT, RENEWAL, 19970S0091B2082 - 32 -
1 RESTRICTIONS AND TERMINATION OF CREDENTIALS FOR HEALTH CARE 2 PROVIDERS. 3 (B) THE DEPARTMENT SHALL ESTABLISH CREDENTIALING STANDARDS 4 FOR MANAGED CARE PLANS. THE DEPARTMENT MAY ADOPT NATIONALLY 5 RECOGNIZED ACCREDITING STANDARDS TO ESTABLISH THE CREDENTIALING 6 STANDARDS FOR MANAGED CARE PLANS. 7 (C) A MANAGED CARE PLAN SHALL SUBMIT A REPORT TO THE 8 DEPARTMENT REGARDING ITS CREDENTIALING PROCESS AT LEAST EVERY 9 TWO (2) YEARS OR AS MAY OTHERWISE BE REQUIRED BY THE DEPARTMENT. 10 (D) A MANAGED CARE PLAN SHALL DISCLOSE RELEVANT 11 CREDENTIALING CRITERIA AND PROCEDURES TO HEALTH CARE PROVIDERS 12 THAT APPLY TO PARTICIPATE OR THAT ARE PARTICIPATING IN THE 13 PLAN'S PROVIDER NETWORK. A MANAGED CARE PLAN SHALL ALSO DISCLOSE 14 RELEVANT CREDENTIALING CRITERIA AND PROCEDURES PURSUANT TO A 15 COURT ORDER OR RULE. ANY INDIVIDUAL PROVIDING INFORMATION DURING 16 THE CREDENTIALING PROCESS OF A MANAGED CARE PLAN SHALL HAVE THE 17 PROTECTIONS SET FORTH IN THE ACT OF JULY 20, 1974 (P.L.564, 18 NO.193), KNOWN AS THE "PEER REVIEW PROTECTION ACT." 19 (E) NO MANAGED CARE PLAN SHALL EXCLUDE OR TERMINATE A HEALTH 20 CARE PROVIDER FROM PARTICIPATION IN THE PLAN DUE TO ANY OF THE 21 FOLLOWING: 22 (1) THE HEALTH CARE PROVIDER ENGAGED IN ANY OF THE 23 ACTIVITIES SET FORTH IN SECTION 2113(C). 24 (2) THE HEALTH CARE PROVIDER HAS A PRACTICE THAT INCLUDES A 25 SUBSTANTIAL NUMBER OF PATIENTS WITH EXPENSIVE MEDICAL 26 CONDITIONS. 27 (3) THE HEALTH CARE PROVIDER OBJECTS TO THE PROVISION OF OR 28 REFUSES TO PROVIDE A HEALTH CARE SERVICE ON MORAL OR RELIGIOUS 29 GROUNDS. 30 (F) IF A MANAGED CARE PLAN DENIES ENROLLMENT OR RENEWAL OF 19970S0091B2082 - 33 -
1 CREDENTIALS TO A HEALTH CARE PROVIDER, THE MANAGED CARE PLAN 2 SHALL PROVIDE THE HEALTH CARE PROVIDER WITH WRITTEN NOTICE OF 3 THE DECISION. THE NOTICE SHALL INCLUDE A CLEAR RATIONALE FOR THE 4 DECISION. 5 (E) CONFIDENTIALITY 6 SECTION 2131. CONFIDENTIALITY.--(A) A MANAGED CARE PLAN AND 7 A UTILIZATION REVIEW ENTITY SHALL ADOPT AND MAINTAIN PROCEDURES 8 TO ENSURE THAT ALL IDENTIFIABLE INFORMATION REGARDING ENROLLEE 9 HEALTH, DIAGNOSIS AND TREATMENT IS ADEQUATELY PROTECTED AND 10 REMAINS CONFIDENTIAL IN COMPLIANCE WITH ALL APPLICABLE FEDERAL 11 AND STATE LAWS AND REGULATIONS AND PROFESSIONAL ETHICAL 12 STANDARDS. 13 (B) TO THE EXTENT A MANAGED CARE PLAN MAINTAINS MEDICAL 14 RECORDS, THE PLAN SHALL ADOPT AND MAINTAIN PROCEDURES TO ENSURE 15 THAT ENROLLEES HAVE TIMELY ACCESS TO THEIR MEDICAL RECORDS, 16 UNLESS PROHIBITED BY FEDERAL OR STATE LAW OR REGULATION. 17 (C) (1) INFORMATION REGARDING AN ENROLLEE'S HEALTH OR 18 TREATMENT SHALL BE AVAILABLE TO THE ENROLLEE, THE ENROLLEE'S 19 DESIGNEE OR AS NECESSARY TO PREVENT DEATH OR SERIOUS INJURY. 20 (2) NOTHING IN THIS SECTION SHALL: 21 (I) PREVENT DISCLOSURE NECESSARY TO DETERMINE COVERAGE, 22 REVIEW COMPLAINTS OR GRIEVANCES, CONDUCT UTILIZATION REVIEW OR 23 FACILITATE PAYMENT OF A CLAIM. 24 (II) DENY THE DEPARTMENT, THE INSURANCE DEPARTMENT OR THE 25 DEPARTMENT OF PUBLIC WELFARE ACCESS TO RECORDS FOR PURPOSES OF 26 QUALITY ASSURANCE, INVESTIGATION OF COMPLAINTS OR GRIEVANCES, 27 ENFORCEMENT OR OTHER ACTIVITIES RELATED TO COMPLIANCE WITH THIS 28 ARTICLE AND OTHER LAWS OF THIS COMMONWEALTH. RECORDS SHALL BE 29 ACCESSIBLE ONLY TO DEPARTMENT EMPLOYES OR AGENTS WITH DIRECT 30 RESPONSIBILITIES UNDER THE PROVISIONS OF THIS SUBPARAGRAPH. 19970S0091B2082 - 34 -
1 (III) DENY ACCESS TO INFORMATION NECESSARY FOR A UTILIZATION 2 REVIEW ENTITY TO CONDUCT A REVIEW UNDER THIS ARTICLE. 3 (IV) DENY ACCESS TO THE MANAGED CARE PLAN FOR INTERNAL 4 QUALITY REVIEW, INCLUDING REVIEWS CONDUCTED AS PART OF THE 5 PLAN'S QUALITY OVERSIGHT PROCESS. DURING SUCH REVIEWS, ENROLLEES 6 SHALL REMAIN ANONYMOUS TO THE GREATEST EXTENT POSSIBLE. 7 (V) DENY ACCESS TO MANAGED CARE PLANS, HEALTH CARE PROVIDERS 8 AND THEIR RESPECTIVE DESIGNEES, FOR THE PURPOSE OF PROVIDING 9 PATIENT CARE MANAGEMENT, OUTCOMES IMPROVEMENT AND RESEARCH. FOR 10 THIS PURPOSE, ENROLLEES SHALL PROVIDE CONSENT AND SHALL REMAIN 11 ANONYMOUS TO THE GREATEST EXTENT POSSIBLE. 12 (F) INFORMATION FOR ENROLLEES 13 SECTION 2136. REQUIRED DISCLOSURE.--(A) A MANAGED CARE PLAN 14 SHALL SUPPLY EACH ENROLLEE AND, UPON WRITTEN REQUEST, EACH 15 PROSPECTIVE ENROLLEE OR HEALTH CARE PROVIDER, WITH THE FOLLOWING 16 WRITTEN INFORMATION. SUCH INFORMATION SHALL BE EASILY 17 UNDERSTANDABLE BY THE LAYPERSON AND SHALL INCLUDE, BUT NOT BE 18 LIMITED TO: 19 (1) A DESCRIPTION OF COVERAGE, BENEFITS AND BENEFIT 20 MAXIMUMS, INCLUDING BENEFIT LIMITATIONS AND EXCLUSIONS OF 21 COVERAGE, HEALTH CARE SERVICES AND THE DEFINITION OF MEDICAL 22 NECESSITY USED BY THE PLAN IN DETERMINING WHETHER THESE BENEFITS 23 WILL BE COVERED. THE FOLLOWING STATEMENT SHALL BE INCLUDED IN 24 ALL MARKETING MATERIALS IN BOLDFACE TYPE: 25 THIS MANAGED CARE PLAN MAY NOT COVER ALL YOUR HEALTH CARE 26 EXPENSES. READ YOUR CONTRACT CAREFULLY TO DETERMINE WHICH 27 HEALTH CARE SERVICES ARE COVERED. 28 THE NOTICE SHALL BE FOLLOWED BY A TELEPHONE NUMBER TO CONTACT 29 THE PLAN. 30 (2) A DESCRIPTION OF ALL NECESSARY PRIOR AUTHORIZATIONS OR 19970S0091B2082 - 35 -
1 OTHER REQUIREMENTS FOR NONEMERGENCY HEALTH CARE SERVICES. 2 (3) AN EXPLANATION OF AN ENROLLEE'S FINANCIAL RESPONSIBILITY 3 FOR PAYMENT OF PREMIUMS, COINSURANCE, COPAYMENTS, DEDUCTIBLES 4 AND OTHER CHARGES, ANNUAL LIMITS ON AN ENROLLEE'S FINANCIAL 5 RESPONSIBILITY AND CAPS ON PAYMENTS FOR HEALTH CARE SERVICES 6 PROVIDED UNDER THE PLAN. 7 (4) AN EXPLANATION OF AN ENROLLEE'S FINANCIAL RESPONSIBILITY 8 FOR PAYMENT WHEN A HEALTH CARE SERVICE IS PROVIDED BY A 9 NONPARTICIPATING HEALTH CARE PROVIDER, WHEN A HEALTH CARE 10 SERVICE IS PROVIDED BY ANY HEALTH CARE PROVIDER WITHOUT REQUIRED 11 AUTHORIZATION OR WHEN THE CARE RENDERED IS NOT COVERED BY THE 12 PLAN. 13 (5) A DESCRIPTION OF HOW THE MANAGED CARE PLAN ADDRESSES THE 14 NEEDS OF NON-ENGLISH-SPEAKING ENROLLEES. 15 (6) A NOTICE OF MAILING ADDRESSES AND TELEPHONE NUMBERS 16 NECESSARY TO ENABLE AN ENROLLEE TO OBTAIN APPROVAL OR 17 AUTHORIZATION OF A HEALTH CARE SERVICE OR OTHER INFORMATION 18 REGARDING THE PLAN. 19 (7) A SUMMARY OF THE PLAN'S UTILIZATION REVIEW POLICIES AND 20 PROCEDURES. 21 (8) A SUMMARY OF ALL COMPLAINT AND GRIEVANCE PROCEDURES USED 22 TO RESOLVE DISPUTES BETWEEN THE MANAGED CARE PLAN AND AN 23 ENROLLEE OR A HEALTH CARE PROVIDER, INCLUDING: 24 (I) THE PROCEDURE TO FILE A COMPLAINT OR GRIEVANCE AS SET 25 FORTH IN THIS ARTICLE, INCLUDING A TOLL-FREE TELEPHONE NUMBER TO 26 OBTAIN INFORMATION REGARDING THE FILING AND STATUS OF A 27 COMPLAINT OR GRIEVANCE. 28 (II) THE RIGHT TO APPEAL A DECISION RELATING TO A COMPLAINT 29 OR GRIEVANCE. 30 (III) THE ENROLLEE'S RIGHT TO DESIGNATE A REPRESENTATIVE TO 19970S0091B2082 - 36 -
1 PARTICIPATE IN THE COMPLAINT OR GRIEVANCE PROCESS AS SET FORTH 2 IN THIS ARTICLE. 3 (IV) A NOTICE THAT ALL DISPUTES INVOLVING DENIAL OF PAYMENT 4 FOR A HEALTH CARE SERVICE WILL BE MADE BY QUALIFIED PERSONNEL 5 WITH EXPERIENCE IN THE SAME OR SIMILAR SCOPE OF PRACTICE AND 6 THAT ALL NOTICES OF DECISIONS WILL INCLUDE INFORMATION REGARDING 7 THE BASIS FOR THE DETERMINATION. 8 (9) A DESCRIPTION OF THE PROCEDURE FOR PROVIDING EMERGENCY 9 SERVICES TWENTY-FOUR (24) HOURS A DAY. THE DESCRIPTION SHALL 10 INCLUDE: 11 (I) A DEFINITION OF EMERGENCY SERVICES AS SET FORTH IN THIS 12 ARTICLE. 13 (II) NOTICE THAT EMERGENCY SERVICES ARE NOT SUBJECT TO PRIOR 14 APPROVAL. 15 (III) THE ENROLLEE'S FINANCIAL AND OTHER RESPONSIBILITIES 16 REGARDING EMERGENCY SERVICES, INCLUDING THE RECEIPT OF THESE 17 SERVICES OUTSIDE THE MANAGED CARE PLAN'S SERVICE AREA. 18 (10) A DESCRIPTION OF THE PROCEDURES FOR ENROLLEES TO SELECT 19 A PARTICIPATING HEALTH CARE PROVIDER, INCLUDING HOW TO DETERMINE 20 WHETHER A PARTICIPATING HEALTH CARE PROVIDER IS ACCEPTING NEW 21 ENROLLEES. 22 (11) A DESCRIPTION OF THE PROCEDURES FOR CHANGING PRIMARY 23 CARE PROVIDERS AND SPECIALISTS. 24 (12) A DESCRIPTION OF THE PROCEDURES BY WHICH AN ENROLLEE 25 MAY OBTAIN A REFERRAL TO A HEALTH CARE PROVIDER OUTSIDE THE 26 PROVIDER NETWORK WHEN THAT PROVIDER NETWORK DOES NOT INCLUDE A 27 HEALTH CARE PROVIDER WITH APPROPRIATE TRAINING AND EXPERIENCE TO 28 MEET THE HEALTH CARE SERVICE NEEDS OF AN ENROLLEE. 29 (13) A DESCRIPTION OF THE PROCEDURES THAT AN ENROLLEE WITH A 30 LIFE-THREATENING, DEGENERATIVE OR DISABLING DISEASE OR CONDITION 19970S0091B2082 - 37 -
1 SHALL FOLLOW AND SATISFY TO BE ELIGIBLE FOR: 2 (I) A STANDING REFERRAL TO A SPECIALIST WITH CLINICAL 3 EXPERTISE IN TREATING THE DISEASE OR CONDITION; OR 4 (II) THE DESIGNATION OF A SPECIALIST TO PROVIDE AND 5 COORDINATE THE ENROLLEE'S PRIMARY AND SPECIALTY CARE. 6 (14) A LIST BY SPECIALTY OF THE NAME, ADDRESS AND TELEPHONE 7 NUMBER OF ALL PARTICIPATING HEALTH CARE PROVIDERS. THE LIST MAY 8 BE A SEPARATE DOCUMENT AND SHALL BE UPDATED AT LEAST ANNUALLY. 9 (15) A LIST OF THE INFORMATION AVAILABLE TO ENROLLEES OR 10 PROSPECTIVE ENROLLEES, UPON WRITTEN REQUEST, UNDER SUBSECTION 11 (B). 12 (B) EACH MANAGED CARE PLAN SHALL, UPON WRITTEN REQUEST OF AN 13 ENROLLEE OR PROSPECTIVE ENROLLEE, PROVIDE THE FOLLOWING WRITTEN 14 INFORMATION: 15 (1) A LIST OF THE NAMES, BUSINESS ADDRESSES AND OFFICIAL 16 POSITIONS OF THE MEMBERSHIP OF THE BOARD OF DIRECTORS OR 17 OFFICERS OF THE MANAGED CARE PLAN. 18 (2) THE PROCEDURES ADOPTED TO PROTECT THE CONFIDENTIALITY OF 19 MEDICAL RECORDS AND OTHER ENROLLEE INFORMATION. 20 (3) A DESCRIPTION OF THE CREDENTIALING PROCESS FOR HEALTH 21 CARE PROVIDERS. 22 (4) A LIST OF THE PARTICIPATING HEALTH CARE PROVIDERS 23 AFFILIATED WITH PARTICIPATING HOSPITALS. 24 (5) WHETHER A SPECIFICALLY IDENTIFIED DRUG IS INCLUDED OR 25 EXCLUDED FROM COVERAGE. 26 (6) A DESCRIPTION OF THE PROCESS BY WHICH A HEALTH CARE 27 PROVIDER CAN PRESCRIBE SPECIFIC DRUGS, DRUGS USED FOR AN OFF- 28 LABEL PURPOSE, BIOLOGICALS AND MEDICATIONS NOT INCLUDED IN THE 29 DRUG FORMULARY FOR PRESCRIPTION DRUGS OR BIOLOGICALS WHEN THE 30 FORMULARY'S EQUIVALENT HAS BEEN INEFFECTIVE IN THE TREATMENT OF 19970S0091B2082 - 38 -
1 THE ENROLLEE'S DISEASE OR IF THE DRUG CAUSES OR IS REASONABLY 2 EXPECTED TO CAUSE ADVERSE OR HARMFUL REACTIONS TO THE ENROLLEE. 3 (7) A DESCRIPTION OF THE PROCEDURES FOLLOWED BY THE MANAGED 4 CARE PLAN TO MAKE DECISIONS ABOUT THE EXPERIMENTAL NATURE OF 5 INDIVIDUAL DRUGS, MEDICAL DEVICES OR TREATMENTS. 6 (8) A SUMMARY OF THE METHODOLOGIES USED BY THE MANAGED CARE 7 PLAN TO REIMBURSE FOR HEALTH CARE SERVICES. NOTHING IN THIS 8 PARAGRAPH SHALL BE CONSTRUED TO REQUIRE DISCLOSURE OF INDIVIDUAL 9 CONTRACTS OR THE SPECIFIC DETAILS OF ANY FINANCIAL ARRANGEMENT 10 BETWEEN A MANAGED CARE PLAN AND A HEALTH CARE PROVIDER. 11 (9) A DESCRIPTION OF THE PROCEDURES USED IN THE MANAGED CARE 12 PLAN'S QUALITY ASSURANCE PROGRAM. 13 (10) OTHER INFORMATION AS MAY BE REQUIRED BY THE DEPARTMENT 14 OR THE INSURANCE DEPARTMENT. 15 (G) COMPLAINTS 16 SECTION 2141. INTERNAL COMPLAINT PROCESS.--(A) A MANAGED 17 CARE PLAN SHALL ESTABLISH AND MAINTAIN AN INTERNAL COMPLAINT 18 PROCESS WITH TWO LEVELS OF REVIEW BY WHICH AN ENROLLEE SHALL BE 19 ABLE TO FILE A COMPLAINT REGARDING A PARTICIPATING HEALTH CARE 20 PROVIDER OR THE COVERAGE, OPERATIONS OR MANAGEMENT POLICIES OF 21 THE MANAGED CARE PLAN. 22 (B) THE COMPLAINT PROCESS SHALL CONSIST OF AN INITIAL REVIEW 23 TO INCLUDE ALL OF THE FOLLOWING: 24 (1) A REVIEW BY AN INITIAL REVIEW COMMITTEE CONSISTING OF 25 ONE OR MORE EMPLOYES OF THE MANAGED CARE PLAN. 26 (2) THE ALLOWANCE OF A WRITTEN OR ORAL COMPLAINT. 27 (3) THE ALLOWANCE OF WRITTEN DATA OR OTHER INFORMATION. 28 (4) A REVIEW OR INVESTIGATION OF THE COMPLAINT, WHICH SHALL 29 BE COMPLETED WITHIN THIRTY (30) DAYS OF RECEIPT OF THE 30 COMPLAINT. 19970S0091B2082 - 39 -
1 (5) A WRITTEN NOTIFICATION TO THE ENROLLEE REGARDING THE 2 DECISION OF THE INITIAL REVIEW COMMITTEE WITHIN FIVE (5) 3 BUSINESS DAYS OF THE DECISION. NOTICE SHALL INCLUDE THE BASIS 4 FOR THE DECISION AND THE PROCEDURE TO FILE A REQUEST FOR A 5 SECOND LEVEL REVIEW OF THE DECISION OF THE INITIAL REVIEW 6 COMMITTEE. 7 (C) THE COMPLAINT PROCESS SHALL INCLUDE A SECOND LEVEL 8 REVIEW THAT INCLUDES ALL OF THE FOLLOWING: 9 (1) A REVIEW OF THE DECISION OF THE INITIAL REVIEW COMMITTEE 10 BY A SECOND LEVEL REVIEW COMMITTEE CONSISTING OF THREE OR MORE 11 INDIVIDUALS WHO DID NOT PARTICIPATE IN THE INITIAL REVIEW. AT 12 LEAST ONE THIRD OF THE SECOND LEVEL REVIEW COMMITTEE SHALL NOT 13 BE EMPLOYED BY THE MANAGED CARE PLAN. 14 (2) A WRITTEN NOTIFICATION TO THE ENROLLEE OF THE RIGHT TO 15 APPEAR BEFORE THE SECOND LEVEL REVIEW COMMITTEE. 16 (3) A REQUIREMENT THAT THE SECOND LEVEL REVIEW BE COMPLETED 17 WITHIN FORTY-FIVE (45) DAYS OF RECEIPT OF A REQUEST FOR SUCH 18 REVIEW. 19 (4) A WRITTEN NOTIFICATION TO THE ENROLLEE REGARDING THE 20 DECISION OF THE SECOND LEVEL REVIEW COMMITTEE WITHIN FIVE (5) 21 BUSINESS DAYS OF THE DECISION. THE NOTICE SHALL INCLUDE THE 22 BASIS FOR THE DECISION AND THE PROCEDURE FOR APPEALING THE 23 DECISION TO THE DEPARTMENT OR THE INSURANCE DEPARTMENT. 24 SECTION 2142. APPEAL OF COMPLAINT.--(A) AN ENROLLEE SHALL 25 HAVE FIFTEEN (15) DAYS FROM RECEIPT OF THE NOTICE OF THE 26 DECISION FROM THE SECOND LEVEL REVIEW COMMITTEE TO APPEAL THE 27 DECISION TO THE DEPARTMENT OR THE INSURANCE DEPARTMENT, AS 28 APPROPRIATE. 29 (B) ALL RECORDS FROM THE INITIAL REVIEW AND SECOND LEVEL 30 REVIEW SHALL BE TRANSMITTED TO THE APPROPRIATE DEPARTMENT IN THE 19970S0091B2082 - 40 -
1 MANNER PRESCRIBED. THE ENROLLEE, THE HEALTH CARE PROVIDER OR THE 2 MANAGED CARE PLAN MAY SUBMIT ADDITIONAL MATERIALS RELATED TO THE 3 COMPLAINT. 4 (C) THE ENROLLEE MAY BE REPRESENTED BY AN ATTORNEY OR OTHER 5 INDIVIDUAL BEFORE THE APPROPRIATE DEPARTMENT. 6 (D) THE APPROPRIATE DEPARTMENT SHALL DETERMINE WHETHER A 7 VIOLATION OF THIS ARTICLE HAS OCCURRED AND MAY IMPOSE ANY 8 PENALTIES AUTHORIZED BY THIS ARTICLE. 9 SECTION 2143. COMPLAINT RESOLUTION.--NOTHING IN THIS 10 SUBARTICLE SHALL PREVENT THE DEPARTMENT OR THE INSURANCE 11 DEPARTMENT FROM COMMUNICATING WITH THE ENROLLEE, THE HEALTH CARE 12 PROVIDER OR THE MANAGED CARE PLAN AS APPROPRIATE TO ASSIST IN 13 THE RESOLUTION OF A COMPLAINT. SUCH COMMUNICATION MAY OCCUR AT 14 ANY TIME DURING THE COMPLAINT PROCESS. 15 (H) UTILIZATION REVIEW 16 SECTION 2151. CERTIFICATION.--(A) A UTILIZATION REVIEW 17 ENTITY MAY NOT REVIEW HEALTH CARE SERVICES DELIVERED OR PROPOSED 18 TO BE DELIVERED IN THIS COMMONWEALTH UNLESS THE ENTITY IS 19 CERTIFIED BY THE DEPARTMENT TO PERFORM UTILIZATION REVIEW. A 20 UTILIZATION REVIEW ENTITY OPERATING IN THIS COMMONWEALTH ON OR 21 BEFORE THE EFFECTIVE DATE OF THIS ARTICLE SHALL HAVE ONE YEAR 22 FROM THE EFFECTIVE DATE OF THIS ARTICLE TO APPLY FOR 23 CERTIFICATION. 24 (B) THE DEPARTMENT SHALL GRANT CERTIFICATION TO A 25 UTILIZATION REVIEW ENTITY THAT MEETS THE REQUIREMENTS OF THIS 26 SECTION. CERTIFICATION SHALL BE RENEWED EVERY THREE YEARS UNLESS 27 OTHERWISE SUBJECT TO ADDITIONAL REVIEW, SUSPENSION OR REVOCATION 28 BY THE DEPARTMENT. 29 (C) THE DEPARTMENT MAY ADOPT A NATIONALLY RECOGNIZED 30 ACCREDITING BODY'S STANDARDS TO CERTIFY UTILIZATION REVIEW 19970S0091B2082 - 41 -
1 ENTITIES TO THE EXTENT THE STANDARDS MEET OR EXCEED THE 2 STANDARDS SET FORTH IN THIS ARTICLE. 3 (D) THE DEPARTMENT MAY PRESCRIBE APPLICATION AND RENEWAL 4 FEES FOR CERTIFICATION. THE FEES SHALL REFLECT THE 5 ADMINISTRATIVE COSTS OF CERTIFICATION AND SHALL BE DEPOSITED IN 6 THE GENERAL FUND. 7 (E) A LICENSED INSURER OR A MANAGED CARE PLAN WITH A 8 CERTIFICATE OF AUTHORITY SHALL COMPLY WITH THE STANDARDS AND 9 PROCEDURES OF THIS SUBARTICLE, BUT SHALL NOT BE REQUIRED TO 10 OBTAIN SEPARATE CERTIFICATION AS A UTILIZATION REVIEW ENTITY. 11 SECTION 2152. OPERATIONAL STANDARDS.--(A) A UTILIZATION 12 REVIEW ENTITY SHALL DO ALL OF THE FOLLOWING: 13 (1) RESPOND TO INQUIRIES RELATING TO UTILIZATION REVIEW 14 DETERMINATIONS BY: 15 (I) PROVIDING TOLL-FREE TELEPHONE ACCESS AT LEAST FORTY (40) 16 HOURS PER WEEK DURING NORMAL BUSINESS HOURS; 17 (II) MAINTAINING A TELEPHONE ANSWERING SERVICE OR RECORDING 18 SYSTEM DURING NONBUSINESS HOURS; AND 19 (III) RESPONDING TO EACH TELEPHONE CALL RECEIVED BY THE 20 ANSWERING SERVICE OR RECORDING SYSTEM REGARDING A UTILIZATION 21 REVIEW DETERMINATION WITHIN ONE (1) BUSINESS DAY OF THE RECEIPT 22 OF THE CALL. 23 (2) PROTECT THE CONFIDENTIALITY OF ENROLLEE MEDICAL RECORDS 24 AS SET FORTH IN SECTION 2131. 25 (3) ENSURE THAT A HEALTH CARE PROVIDER IS ABLE TO VERIFY 26 THAT AN INDIVIDUAL REQUESTING INFORMATION ON BEHALF OF THE 27 MANAGED CARE PLAN IS A LEGITIMATE REPRESENTATIVE OF THE PLAN. 28 (4) CONDUCT UTILIZATION REVIEWS BASED ON THE MEDICAL 29 NECESSITY AND APPROPRIATENESS OF THE HEALTH CARE SERVICE BEING 30 REVIEWED AND PROVIDE NOTIFICATION WITHIN THE FOLLOWING TIME 19970S0091B2082 - 42 -
1 FRAMES: 2 (I) A PROSPECTIVE UTILIZATION REVIEW DECISION SHALL BE 3 COMMUNICATED WITHIN TWO (2) BUSINESS DAYS OF THE RECEIPT OF ALL 4 SUPPORTING INFORMATION REASONABLY NECESSARY TO COMPLETE THE 5 REVIEW. 6 (II) A CONCURRENT UTILIZATION REVIEW DECISION SHALL BE 7 COMMUNICATED WITHIN ONE (1) BUSINESS DAY OF THE RECEIPT OF ALL 8 SUPPORTING INFORMATION REASONABLY NECESSARY TO COMPLETE THE 9 REVIEW. 10 (III) A RETROSPECTIVE UTILIZATION REVIEW DECISION SHALL BE 11 COMMUNICATED WITHIN THIRTY (30) DAYS OF THE RECEIPT OF ALL 12 SUPPORTING INFORMATION REASONABLY NECESSARY TO COMPLETE THE 13 REVIEW. 14 (5) ENSURE THAT PERSONNEL CONDUCTING A UTILIZATION REVIEW 15 HAVE CURRENT LICENSES IN GOOD STANDING OR OTHER REQUIRED 16 CREDENTIALS, WITHOUT RESTRICTIONS, FROM THE APPROPRIATE AGENCY. 17 (6) PROVIDE ALL DECISIONS IN WRITING TO INCLUDE THE BASIS 18 AND CLINICAL RATIONALE FOR THE DECISION. 19 (7) NOTIFY THE HEALTH CARE PROVIDER OF ADDITIONAL FACTS OR 20 DOCUMENTS REQUIRED TO COMPLETE THE UTILIZATION REVIEW WITHIN 21 FORTY-EIGHT (48) HOURS OF RECEIPT OF THE REQUEST FOR REVIEW. 22 (8) MAINTAIN A WRITTEN RECORD OF UTILIZATION REVIEW 23 DECISIONS ADVERSE TO ENROLLEES FOR NOT LESS THAN THREE (3) 24 YEARS, INCLUDING A DETAILED JUSTIFICATION AND ALL REQUIRED 25 NOTIFICATIONS TO THE HEALTH CARE PROVIDER AND THE ENROLLEE. 26 (B) COMPENSATION TO ANY PERSON OR ENTITY PERFORMING 27 UTILIZATION REVIEW MAY NOT CONTAIN INCENTIVES, DIRECT OR 28 INDIRECT, FOR THE PERSON OR ENTITY TO APPROVE OR DENY PAYMENT 29 FOR THE DELIVERY OF ANY HEALTH CARE SERVICE. 30 (C) UTILIZATION REVIEW THAT RESULTS IN A DENIAL OF PAYMENT 19970S0091B2082 - 43 -
1 FOR A HEALTH CARE SERVICE SHALL BE MADE BY A LICENSED PHYSICIAN, 2 EXCEPT AS PROVIDED IN SUBSECTION (D). 3 (D) A LICENSED PSYCHOLOGIST MAY PERFORM A UTILIZATION REVIEW 4 FOR BEHAVIORAL HEALTH CARE SERVICES WITHIN THE PSYCHOLOGIST'S 5 SCOPE OF PRACTICE IF THE PSYCHOLOGIST'S CLINICAL EXPERIENCE 6 PROVIDES SUFFICIENT EXPERIENCE TO REVIEW THAT SPECIFIC 7 BEHAVIORAL HEALTH CARE SERVICE. THE USE OF A LICENSED 8 PSYCHOLOGIST TO PERFORM A UTILIZATION REVIEW OF A BEHAVIORAL 9 HEALTH CARE SERVICE SHALL BE APPROVED BY THE DEPARTMENT AS PART 10 OF THE CERTIFICATION PROCESS UNDER SECTION 2151. A LICENSED 11 PSYCHOLOGIST SHALL NOT REVIEW THE DENIAL OF PAYMENT FOR A HEALTH 12 CARE SERVICE INVOLVING INPATIENT CARE OR A PRESCRIPTION DRUG. 13 (I) GRIEVANCES 14 SECTION 2161. INTERNAL GRIEVANCE PROCESS.--(A) A MANAGED 15 CARE PLAN SHALL ESTABLISH AND MAINTAIN AN INTERNAL GRIEVANCE 16 PROCESS WITH TWO LEVELS OF REVIEW AND AN EXPEDITED INTERNAL 17 GRIEVANCE PROCESS BY WHICH AN ENROLLEE OR A HEALTH CARE 18 PROVIDER, WITH THE WRITTEN CONSENT OF THE ENROLLEE, SHALL BE 19 ABLE TO FILE A WRITTEN GRIEVANCE REGARDING THE DENIAL OF PAYMENT 20 FOR A HEALTH CARE SERVICE. AN ENROLLEE WHO CONSENTS TO THE 21 FILING OF A GRIEVANCE BY A HEALTH CARE PROVIDER UNDER THIS 22 SECTION MAY NOT FILE A SEPARATE GRIEVANCE. 23 (B) THE INTERNAL GRIEVANCE PROCESS SHALL CONSIST OF AN 24 INITIAL REVIEW THAT INCLUDES ALL OF THE FOLLOWING: 25 (1) A REVIEW BY ONE OR MORE PERSONS SELECTED BY THE MANAGED 26 CARE PLAN, WHO DID NOT PREVIOUSLY PARTICIPATE IN THE DECISION TO 27 DENY PAYMENT FOR THE HEALTH CARE SERVICE. 28 (2) THE COMPLETION OF THE REVIEW WITHIN THIRTY (30) DAYS OF 29 RECEIPT OF THE GRIEVANCE. 30 (3) A WRITTEN NOTIFICATION TO THE ENROLLEE AND HEALTH CARE 19970S0091B2082 - 44 -
1 PROVIDER REGARDING THE DECISION WITHIN FIVE (5) BUSINESS DAYS OF 2 THE DECISION. THE NOTICE SHALL INCLUDE THE BASIS AND CLINICAL 3 RATIONALE FOR THE DECISION AND THE PROCEDURE TO FILE A REQUEST 4 FOR A SECOND LEVEL REVIEW OF THE DECISION. 5 (C) THE GRIEVANCE PROCESS SHALL INCLUDE A SECOND LEVEL 6 REVIEW THAT INCLUDES ALL OF THE FOLLOWING: 7 (1) A REVIEW OF THE DECISION ISSUED PURSUANT TO SUBSECTION 8 (B) BY A SECOND LEVEL REVIEW COMMITTEE CONSISTING OF THREE OR 9 MORE PERSONS WHO DID NOT PREVIOUSLY PARTICIPATE IN ANY DECISION 10 TO DENY PAYMENT FOR THE HEALTH CARE SERVICE. 11 (2) A WRITTEN NOTIFICATION TO THE ENROLLEE OR THE HEALTH 12 CARE PROVIDER OF THE RIGHT TO APPEAR BEFORE THE SECOND LEVEL 13 REVIEW COMMITTEE. 14 (3) THE COMPLETION OF THE SECOND LEVEL REVIEW WITHIN FORTY- 15 FIVE (45) DAYS OF RECEIPT OF A REQUEST FOR SUCH REVIEW. 16 (4) A WRITTEN NOTIFICATION TO THE ENROLLEE AND HEALTH CARE 17 PROVIDER REGARDING THE DECISION OF THE SECOND LEVEL REVIEW 18 COMMITTEE WITHIN FIVE (5) BUSINESS DAYS OF THE DECISION. THE 19 NOTICE SHALL INCLUDE THE BASIS AND CLINICAL RATIONALE FOR THE 20 DECISION AND THE PROCEDURE FOR APPEALING THE DECISION. 21 (D) ANY INITIAL REVIEW OR SECOND LEVEL REVIEW CONDUCTED 22 UNDER THIS SECTION SHALL INCLUDE A LICENSED PHYSICIAN, OR, WHERE 23 APPROPRIATE, AN APPROVED LICENSED PSYCHOLOGIST, IN THE SAME OR 24 SIMILAR SPECIALTY THAT TYPICALLY MANAGES OR CONSULTS ON THE 25 HEALTH CARE SERVICE. 26 (E) SHOULD THE ENROLLEE'S LIFE, HEALTH OR ABILITY TO REGAIN 27 MAXIMUM FUNCTION BE IN JEOPARDY, AN EXPEDITED INTERNAL GRIEVANCE 28 PROCESS SHALL BE AVAILABLE, WHICH SHALL INCLUDE A REQUIREMENT 29 THAT A DECISION, WITH APPROPRIATE NOTIFICATION TO THE ENROLLEE 30 AND HEALTH CARE PROVIDER, BE MADE WITHIN FORTY-EIGHT (48) HOURS 19970S0091B2082 - 45 -
1 OF THE FILING OF THE EXPEDITED GRIEVANCE. 2 SECTION 2162. EXTERNAL GRIEVANCE PROCESS.--(A) A MANAGED 3 CARE PLAN SHALL ESTABLISH AND MAINTAIN AN EXTERNAL GRIEVANCE 4 PROCESS BY WHICH AN ENROLLEE OR A HEALTH CARE PROVIDER, WITH THE 5 WRITTEN CONSENT OF THE ENROLLEE, MAY APPEAL THE DENIAL OF A 6 GRIEVANCE FOLLOWING COMPLETION OF THE INTERNAL GRIEVANCE 7 PROCESS. THE EXTERNAL GRIEVANCE PROCESS SHALL BE CONDUCTED BY AN 8 INDEPENDENT UTILIZATION REVIEW ENTITY NOT DIRECTLY AFFILIATED 9 WITH THE MANAGED CARE PLAN. 10 (B) TO CONDUCT EXTERNAL GRIEVANCES FILED UNDER THIS SECTION: 11 (1) THE DEPARTMENT SHALL RANDOMLY ASSIGN A UTILIZATION 12 REVIEW ENTITY ON A ROTATIONAL BASIS FROM THE LIST MAINTAINED 13 UNDER SUBSECTION (D) AND NOTIFY THE ASSIGNED UTILIZATION REVIEW 14 ENTITY AND THE MANAGED CARE PLAN WITHIN TWO (2) BUSINESS DAYS OF 15 RECEIVING THE REQUEST. IF THE DEPARTMENT FAILS TO SELECT A 16 UTILIZATION REVIEW ENTITY UNDER THIS SUBSECTION, THE MANAGED 17 CARE PLAN SHALL DESIGNATE AND NOTIFY A CERTIFIED UTILIZATION 18 REVIEW ENTITY TO CONDUCT THE EXTERNAL GRIEVANCE. 19 (2) THE MANAGED CARE PLAN SHALL NOTIFY THE ENROLLEE OR 20 HEALTH CARE PROVIDER OF THE NAME, ADDRESS AND TELEPHONE NUMBER 21 OF THE UTILIZATION REVIEW ENTITY ASSIGNED UNDER THIS SUBSECTION 22 WITH TWO (2) BUSINESS DAYS. 23 (C) THE EXTERNAL GRIEVANCE PROCESS SHALL MEET ALL OF THE 24 FOLLOWING REQUIREMENTS: 25 (1) ANY EXTERNAL GRIEVANCE SHALL BE FILED WITH THE MANAGED 26 CARE PLAN WITHIN FIFTEEN (15) DAYS OF RECEIPT OF A NOTICE OF 27 DENIAL RESULTING FROM THE INTERNAL GRIEVANCE PROCESS. THE FILING 28 OF THE EXTERNAL GRIEVANCE SHALL INCLUDE ANY MATERIAL 29 JUSTIFICATION AND ALL REASONABLY NECESSARY SUPPORTING 30 INFORMATION. WITHIN FIVE (5) BUSINESS DAYS OF THE FILING OF AN 19970S0091B2082 - 46 -
1 EXTERNAL GRIEVANCE, THE MANAGED CARE PLAN SHALL NOTIFY THE 2 ENROLLEE OR THE HEALTH CARE PROVIDER, THE UTILIZATION REVIEW 3 ENTITY THAT CONDUCTED THE INTERNAL GRIEVANCE AND THE DEPARTMENT 4 THAT AN EXTERNAL GRIEVANCE HAS BEEN FILED. 5 (2) THE UTILIZATION REVIEW ENTITY THAT CONDUCTED THE 6 INTERNAL GRIEVANCE SHALL FORWARD COPIES OF ALL WRITTEN 7 DOCUMENTATION REGARDING THE DENIAL, INCLUDING THE DECISION, ALL 8 REASONABLY NECESSARY SUPPORTING INFORMATION, A SUMMARY OF 9 APPLICABLE ISSUES, AND THE BASIS AND CLINICAL RATIONALE FOR THE 10 DECISION, TO THE UTILIZATION REVIEW ENTITY CONDUCTING THE 11 EXTERNAL GRIEVANCE WITHIN FIFTEEN (15) DAYS OF RECEIPT OF NOTICE 12 THAT THE EXTERNAL GRIEVANCE WAS FILED. ANY ADDITIONAL WRITTEN 13 INFORMATION MAY BE SUBMITTED BY THE ENROLLEE OR THE HEALTH CARE 14 PROVIDER WITHIN FIFTEEN (15) DAYS OF RECEIPT OF NOTICE THAT THE 15 EXTERNAL GRIEVANCE WAS FILED. 16 (3) THE UTILIZATION REVIEW ENTITY CONDUCTING THE EXTERNAL 17 GRIEVANCE SHALL REVIEW ALL INFORMATION CONSIDERED IN REACHING 18 ANY PRIOR DECISIONS TO DENY PAYMENT FOR THE HEALTH CARE SERVICE 19 AND ANY OTHER WRITTEN SUBMISSION BY THE ENROLLEE OR THE HEALTH 20 CARE PROVIDER. 21 (4) AN EXTERNAL GRIEVANCE DECISION SHALL BE MADE BY: 22 (I) ONE OR MORE LICENSED PHYSICIANS OR APPROVED LICENSED 23 PSYCHOLOGISTS IN ACTIVE CLINICAL PRACTICE OR IN THE SAME OR 24 SIMILAR SPECIALTY THAT TYPICALLY MANAGES OR RECOMMENDS TREATMENT 25 FOR THE HEALTH CARE SERVICE BEING REVIEWED; OR 26 (II) ONE OR MORE PHYSICIANS CURRENTLY CERTIFIED BY A BOARD 27 APPROVED BY THE AMERICAN BOARD OF MEDICAL SPECIALISTS OR THE 28 AMERICAN BOARD OF OSTEOPATHIC SPECIALTIES, IN THE SAME OR 29 SIMILAR SPECIALTY THAT TYPICALLY MANAGES OR RECOMMENDS TREATMENT 30 FOR THE HEALTH CARE SERVICE BEING REVIEWED. 19970S0091B2082 - 47 -
1 (5) WITHIN SIXTY (60) DAYS OF THE FILING OF THE EXTERNAL 2 GRIEVANCE, THE UTILIZATION REVIEW ENTITY CONDUCTING THE EXTERNAL 3 GRIEVANCE SHALL ISSUE A WRITTEN DECISION TO THE MANAGED CARE 4 PLAN, THE ENROLLEE AND THE HEALTH CARE PROVIDER, INCLUDING THE 5 BASIS AND CLINICAL RATIONALE FOR THE DECISION. THE STANDARD OF 6 REVIEW SHALL BE WHETHER THE HEALTH CARE SERVICE DENIED BY THE 7 INTERNAL GRIEVANCE PROCESS WAS MEDICALLY NECESSARY AND 8 APPROPRIATE UNDER THE TERMS OF THE PLAN. THE EXTERNAL GRIEVANCE 9 DECISION SHALL BE SUBJECT TO APPEAL TO A COURT OF COMPETENT 10 JURISDICTION WITHIN SIXTY (60) DAYS OF RECEIPT OF NOTICE OF THE 11 EXTERNAL GRIEVANCE DECISION. THERE SHALL BE A REBUTTABLE 12 PRESUMPTION IN FAVOR OF THE DECISION OF THE UTILIZATION REVIEW 13 ENTITY CONDUCTING THE EXTERNAL GRIEVANCE. 14 (6) THE MANAGED CARE PLAN SHALL AUTHORIZE ANY HEALTH CARE 15 SERVICE OR PAY A CLAIM DETERMINED TO BE MEDICALLY NECESSARY AND 16 APPROPRIATE UNDER PARAGRAPH (5) PURSUANT TO SECTION 2166, 17 WHETHER OR NOT AN APPEAL TO A COURT OF COMPETENT JURISDICTION 18 HAS BEEN FILED. 19 (7) ALL FEES AND COSTS, RELATED TO AN EXTERNAL GRIEVANCE 20 SHALL BE PAID BY THE NONPREVAILING PARTY, IF THE EXTERNAL 21 GRIEVANCE WAS FILED BY THE HEALTH CARE PROVIDER. THE HEALTH CARE 22 PROVIDER AND THE UTILIZATION REVIEW ENTITY OR MANAGED CARE PLAN 23 SHALL EACH PLACE IN ESCROW AN AMOUNT EQUAL TO ONE-HALF OF THE 24 ESTIMATED COSTS OF THE EXTERNAL GRIEVANCE PROCESS. IF THE 25 EXTERNAL GRIEVANCE WAS FILED BY THE ENROLLEE, ALL FEES AND COSTS 26 RELATED THERETO SHALL BE PAID BY THE MANAGED CARE PLAN. FOR 27 PURPOSES OF THIS PARAGRAPH, FEES AND COSTS SHALL NOT INCLUDE 28 ATTORNEY FEES. 29 (D) THE DEPARTMENT SHALL COMPILE AND MAINTAIN A LIST OF 30 CERTIFIED UTILIZATION REVIEW ENTITIES THAT MEET THE REQUIREMENTS 19970S0091B2082 - 48 -
1 OF THIS ARTICLE. THE DEPARTMENT MAY REMOVE A UTILIZATION REVIEW 2 ENTITY FROM THE LIST IF SUCH AN ENTITY IS INCAPABLE OF 3 PERFORMING ITS RESPONSIBILITIES IN A REASONABLE MANNER, CHARGES 4 EXCESSIVE FEES OR VIOLATES THIS ARTICLE. 5 (E) A FEE MAY BE IMPOSED BY A MANAGED CARE PLAN FOR FILING 6 AN EXTERNAL GRIEVANCE PURSUANT TO THIS ARTICLE WHICH SHALL NOT 7 EXCEED TWENTY-FIVE ($25) DOLLARS. 8 (F) WRITTEN CONTRACTS BETWEEN MANAGED CARE PLANS AND HEALTH 9 CARE PROVIDERS MAY PROVIDE AN ALTERNATIVE DISPUTE RESOLUTION 10 SYSTEM TO THE EXTERNAL GRIEVANCE PROCESS SET FORTH IN THIS 11 ARTICLE, IF THE DEPARTMENT APPROVES THE CONTRACT. THE 12 ALTERNATIVE DISPUTE RESOLUTION SYSTEM SHALL BE IMPARTIAL, 13 INCLUDE SPECIFIC TIME LIMITATIONS TO INITIATE APPEALS, RECEIVE 14 WRITTEN INFORMATION, CONDUCT HEARINGS AND RENDER DECISIONS AND 15 OTHERWISE SATISFY THE REQUIREMENTS OF SECTION 2162. A WRITTEN 16 DECISION PURSUANT TO AN ALTERNATIVE DISPUTE RESOLUTION SYSTEM 17 SHALL BE FINAL AND BINDING ON ALL PARTIES. AN ALTERNATIVE 18 DISPUTE RESOLUTION SYSTEM SHALL NOT BE UTILIZED FOR ANY EXTERNAL 19 GRIEVANCE FILED BY AN ENROLLEE. 20 SECTION 2163. RECORDS.--RECORDS REGARDING GRIEVANCES FILED 21 UNDER THIS SUBARTICLE THAT RESULT IN DECISIONS ADVERSE TO 22 ENROLLEES SHALL BE MAINTAINED BY THE PLAN FOR NOT LESS THAN 23 THREE (3) YEARS. THESE RECORDS SHALL BE PROVIDED TO THE 24 DEPARTMENT, IF REQUESTED, IN ACCORDANCE WITH SECTION 25 2131(C)(2)(II). 26 (J) PROMPT PAYMENT 27 SECTION 2166. PROMPT PAYMENT OF CLAIMS.--(A) A LICENSED 28 INSURER OR A MANAGED CARE PLAN SHALL PAY A CLEAN CLAIM SUBMITTED 29 BY A HEALTH CARE PROVIDER WITHIN FORTY-FIVE (45) DAYS OF RECEIPT 30 OF THE CLEAN CLAIM. 19970S0091B2082 - 49 -
1 (B) IF A LICENSED INSURER OR A MANAGED CARE PLAN FAILS TO 2 REMIT THE PAYMENT AS PROVIDED UNDER SUBSECTION (A), INTEREST AT 3 TEN PER CENTUM (10%) PER ANNUM SHALL BE ADDED TO THE AMOUNT OWED 4 ON THE CLEAN CLAIM. INTEREST SHALL BE CALCULATED BEGINNING THE 5 DAY AFTER THE REQUIRED PAYMENT DATE AND ENDING ON THE DATE THE 6 CLAIM IS PAID. THE LICENSED INSURER OR MANAGED CARE PLAN SHALL 7 NOT BE REQUIRED TO PAY ANY INTEREST CALCULATED TO BE LESS THAN 8 TWO ($2) DOLLARS. 9 (K) HEALTH CARE PROVIDER AND MANAGED CARE PLAN PROTECTION 10 SECTION 2171. HEALTH CARE PROVIDER AND MANAGED CARE PLAN 11 PROTECTION.--(A) A MANAGED CARE PLAN SHALL NOT EXCLUDE, 12 DISCRIMINATE AGAINST OR PENALIZE ANY HEALTH CARE PROVIDER FOR 13 ITS REFUSAL TO ALLOW, PERFORM, PARTICIPATE IN OR REFER FOR 14 HEALTH CARE SERVICES, WHEN THE REFUSAL OF THE HEALTH CARE 15 PROVIDER IS BASED ON MORAL OR RELIGIOUS GROUNDS AND THAT 16 PROVIDER MAKES ADEQUATE INFORMATION AVAILABLE TO ENROLLEES OR, 17 IF APPLICABLE, PROSPECTIVE ENROLLEES. 18 (B) NO PUBLIC INSTITUTION, PUBLIC OFFICIAL OR PUBLIC AGENCY 19 MAY TAKE DISCIPLINARY ACTION AGAINST, DENY LICENSURE OR 20 CERTIFICATION OR PENALIZE ANY PERSON, ASSOCIATION OR CORPORATION 21 ATTEMPTING TO ESTABLISH A PLAN, OR OPERATING, EXPANDING OR 22 IMPROVING AN EXISTING PLAN, BECAUSE THE PERSON, ASSOCIATION OR 23 CORPORATION REFUSES TO PROVIDE ANY PARTICULAR FORM OF HEALTH 24 CARE SERVICES OR OTHER SERVICES OR SUPPLIES COVERED BY OTHER 25 PLANS, WHEN THE REFUSAL IS BASED ON MORAL OR RELIGIOUS GROUNDS. 26 (L) ENFORCEMENT 27 SECTION 2181. DEPARTMENTAL POWERS AND DUTIES.--(A) THE 28 DEPARTMENT SHALL REQUIRE THAT RECORDS AND DOCUMENTS SUBMITTED TO 29 A MANAGED CARE PLAN OR UTILIZATION REVIEW ENTITY AS PART OF ANY 30 COMPLAINT OR GRIEVANCE BE MADE AVAILABLE TO THE DEPARTMENT, UPON 19970S0091B2082 - 50 -
1 REQUEST, FOR PURPOSES OF ENFORCEMENT OR COMPLIANCE WITH THIS 2 ARTICLE. 3 (B) THE DEPARTMENT SHALL COMPILE DATA RECEIVED FROM A 4 MANAGED CARE PLAN ON AN ANNUAL BASIS REGARDING THE NUMBER, TYPE 5 AND DISPOSITION OF COMPLAINTS AND GRIEVANCES FILED WITH A 6 MANAGED CARE PLAN UNDER THIS ARTICLE. 7 (C) THE DEPARTMENT SHALL ISSUE GUIDELINES IDENTIFYING THOSE 8 PROVISIONS OF THIS ARTICLE THAT EXCEED OR ARE NOT INCLUDED IN 9 THE "STANDARDS FOR THE ACCREDITATION OF MANAGED CARE 10 ORGANIZATIONS" PUBLISHED BY THE NATIONAL COMMITTEE FOR QUALITY 11 ASSURANCE. THESE GUIDELINES SHALL BE PUBLISHED IN THE 12 PENNSYLVANIA BULLETIN AND UPDATED AS NECESSARY. COPIES OF THE 13 GUIDELINES SHALL BE MADE AVAILABLE TO MANAGED CARE PLANS, HEALTH 14 CARE PROVIDERS AND ENROLLEES, UPON REQUEST. 15 (D) THE DEPARTMENT AND THE INSURANCE DEPARTMENT SHALL ENSURE 16 COMPLIANCE WITH THIS ARTICLE. THE APPROPRIATE DEPARTMENT SHALL 17 INVESTIGATE POTENTIAL VIOLATIONS OF THE ARTICLE BASED UPON 18 INFORMATION RECEIVED FROM ENROLLEES, HEALTH CARE PROVIDERS AND 19 OTHER SOURCES IN ORDER TO ENSURE COMPLIANCE WITH THIS ARTICLE. 20 (E) THE DEPARTMENT AND THE INSURANCE DEPARTMENT SHALL 21 PROMULGATE SUCH REGULATIONS AS MAY BE NECESSARY TO CARRY OUT THE 22 PROVISIONS OF THIS ARTICLE. 23 (F) THE DEPARTMENT IN COOPERATION WITH THE INSURANCE 24 DEPARTMENT SHALL SUBMIT AN ANNUAL REPORT TO THE GENERAL ASSEMBLY 25 REGARDING THE IMPLEMENTATION, OPERATION AND ENFORCEMENT OF THIS 26 ARTICLE. 27 SECTION 2182. PENALTIES AND SANCTIONS.--(A) THE DEPARTMENT 28 OR THE INSURANCE DEPARTMENT, AS APPROPRIATE, MAY IMPOSE A CIVIL 29 PENALTY OF UP TO FIVE THOUSAND ($5,000) DOLLARS FOR A VIOLATION 30 OF THIS ARTICLE. 19970S0091B2082 - 51 -
1 (B) A MANAGED CARE PLAN SHALL BE SUBJECT TO THE ACT OF JULY 2 22, 1974 (P.L.589, NO.205), KNOWN AS THE "UNFAIR INSURANCE 3 PRACTICES ACT." 4 (C) THE DEPARTMENT OR THE INSURANCE DEPARTMENT MAY MAINTAIN 5 AN ACTION IN THE NAME OF THE COMMONWEALTH FOR AN INJUNCTION TO 6 PROHIBIT ANY ACTIVITY WHICH VIOLATES THE PROVISIONS OF THIS 7 ARTICLE. 8 (D) THE DEPARTMENT MAY ISSUE AN ORDER TEMPORARILY 9 PROHIBITING A MANAGED CARE PLAN WHICH VIOLATES THIS ARTICLE FROM 10 ENROLLING NEW MEMBERS. 11 (E) THE DEPARTMENT MAY REQUIRE A MANAGED CARE PLAN TO 12 DEVELOP AND ADHERE TO A PLAN OF CORRECTION APPROVED BY THE 13 DEPARTMENT. THE DEPARTMENT SHALL MONITOR COMPLIANCE WITH THE 14 PLAN OF CORRECTION. THE PLAN OF CORRECTION SHALL BE AVAILABLE TO 15 ENROLLEES OF THE MANAGED CARE PLAN, UPON REQUEST. 16 (F) IN NO EVENT SHALL THE DEPARTMENT AND THE INSURANCE 17 DEPARTMENT IMPOSE A PENALTY FOR THE SAME VIOLATION. 18 SECTION 2183. ADMINISTRATIVE REVIEW.--THE PROVISIONS OF THIS 19 ARTICLE SHALL BE SUBJECT TO 2 PA.C.S. CH. 5 SUBCH. A (RELATING 20 TO PRACTICE AND PROCEDURE OF COMMONWEALTH AGENCIES). 21 (M) MISCELLANEOUS 22 SECTION 2191. COMPLIANCE WITH NATIONAL ACCREDITING 23 STANDARDS.--NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE 24 TO THE CONTRARY, THE DEPARTMENT SHALL GIVE CONSIDERATION TO A 25 MANAGED CARE PLAN'S DEMONSTRATED COMPLIANCE WITH THE STANDARDS 26 AND REQUIREMENTS SET FORTH IN THE "STANDARDS FOR THE 27 ACCREDITATION OF MANAGED CARE ORGANIZATIONS" PUBLISHED BY THE 28 NATIONAL COMMITTEE FOR QUALITY ASSURANCE OR OTHER DEPARTMENT- 29 APPROVED QUALITY REVIEW ORGANIZATIONS IN DETERMINING COMPLIANCE 30 WITH THE SAME OR SIMILAR PROVISIONS OF THIS ARTICLE. THE MANAGED 19970S0091B2082 - 52 -
1 CARE PLAN, HOWEVER, SHALL REMAIN SUBJECT TO AND SHALL COMPLY 2 WITH ANY OTHER PROVISIONS OF THIS ARTICLE THAT EXCEED OR ARE NOT 3 INCLUDED IN THE STANDARDS OF THE NATIONAL COMMITTEE FOR QUALITY 4 ASSURANCE OR OTHER DEPARTMENT-APPROVED QUALITY REVIEW 5 ORGANIZATIONS. 6 SECTION 2192. EXCEPTIONS.--THIS ARTICLE SHALL NOT APPLY TO 7 ANY OF THE FOLLOWING: 8 (1) THE ACT OF JUNE 2, 1915 (P.L.736, NO.338), KNOWN AS THE 9 "WORKERS' COMPENSATION ACT." 10 (2) THE ACT OF JULY 1, 1937 (P.L.2532, NO.470), KNOWN AS THE 11 "WORKERS' COMPENSATION SECURITY FUND ACT." 12 (3) PEER REVIEW, UTILIZATION REVIEW OR MENTAL OR PHYSICAL 13 EXAMINATIONS PERFORMED UNDER 75 PA.C.S. CH. 17 (RELATING TO 14 FINANCIAL RESPONSIBILITY). 15 (4) THE FEE-FOR-SERVICE PROGRAMS OPERATED BY THE DEPARTMENT 16 OF PUBLIC WELFARE UNDER TITLE XIX OF THE SOCIAL SECURITY ACT (49 17 STAT. 620, 42 U.S.C. § 1396 ET SEQ.). 18 SECTION 2193. PREEMPTION.--NOTHING IN THIS ARTICLE SHALL 19 REGULATE OR AUTHORIZE REGULATION WHICH WOULD BE INEFFECTIVE BY 20 REASON OF THE STATE LAW PREEMPTION PROVISIONS OF THE EMPLOYEE 21 RETIREMENT INCOME SECURITY ACT OF 1974 (PUBLIC LAW 93-406, 88 22 STAT. 829). 23 ARTICLE XXIII. 24 CHILDREN'S HEALTH CARE. 25 (A) GENERAL PROVISIONS 26 SECTION 2301. SHORT TITLE.--THIS ARTICLE SHALL BE KNOWN AND 27 MAY BE CITED AS THE "CHILDREN'S HEALTH CARE ACT." 28 SECTION 2302. LEGISLATIVE FINDINGS AND INTENT.--THE GENERAL 29 ASSEMBLY FINDS AND DECLARES AS FOLLOWS: 30 (1) ALL CITIZENS OF THIS COMMONWEALTH SHOULD HAVE ACCESS TO 19970S0091B2082 - 53 -
1 AFFORDABLE AND REASONABLY PRICED HEALTH CARE AND TO 2 NONDISCRIMINATORY TREATMENT BY HEALTH INSURERS AND PROVIDERS. 3 (2) THE UNINSURED HEALTH CARE POPULATION OF THIS 4 COMMONWEALTH IS ESTIMATED TO BE OVER ONE MILLION PERSONS, AND 5 MANY THOUSANDS MORE LACK ADEQUATE INSURANCE COVERAGE. IT IS ALSO 6 ESTIMATED THAT APPROXIMATELY TWO-THIRDS OF THE UNINSURED ARE 7 EMPLOYED OR DEPENDENTS OF EMPLOYED PERSONS. 8 (3) OVER ONE-THIRD OF THE UNINSURED HEALTH CARE POPULATION 9 ARE CHILDREN. UNINSURED CHILDREN ARE OF PARTICULAR CONCERN 10 BECAUSE OF THEIR NEED FOR ONGOING PREVENTIVE AND PRIMARY CARE. 11 MEASURES NOT TAKEN TO CARE FOR SUCH CHILDREN NOW WILL RESULT IN 12 HIGHER HUMAN AND FINANCIAL COSTS LATER. 13 (4) UNINSURED CHILDREN LACK ACCESS TO TIMELY AND APPROPRIATE 14 PRIMARY AND PREVENTIVE CARE. AS A RESULT, HEALTH CARE IS OFTEN 15 DELAYED OR FOREGONE RESULTING IN INCREASED RISK OF DEVELOPING 16 MORE SEVERE CONDITIONS WHICH, IN TURN, ARE MORE EXPENSIVE TO 17 TREAT. THIS TENDENCY TO DELAY CARE AND TO SEEK AMBULATORY CARE 18 IN HOSPITAL-BASED SETTINGS ALSO CAUSES INEFFICIENCIES IN THE 19 HEALTH CARE SYSTEM. 20 (5) HEALTH CARE MARKETS HAVE BEEN DISTORTED THROUGH COST 21 SHIFTS FOR THE UNCOMPENSATED HEALTH CARE COSTS OF UNINSURED 22 CITIZENS OF THIS COMMONWEALTH WHICH HAS CAUSED DECREASED 23 COMPETITIVE CAPACITY ON THE PART OF THOSE HEALTH CARE PROVIDERS 24 WHO SERVE THE POOR AND INCREASED COSTS OF OTHER HEALTH CARE 25 PAYORS. 26 (6) NO ONE SECTOR CAN ABSORB THE COST OF PROVIDING HEALTH 27 CARE TO CITIZENS OF THIS COMMONWEALTH WHO CANNOT AFFORD HEALTH 28 CARE ON THEIR OWN. THE COST IS TOO LARGE FOR THE PUBLIC SECTOR 29 ALONE TO BEAR AND INSTEAD REQUIRES THE ESTABLISHMENT OF A PUBLIC 30 AND PRIVATE PARTNERSHIP TO SHARE THE COSTS IN A MANNER 19970S0091B2082 - 54 -
1 ECONOMICALLY FEASIBLE FOR ALL INTERESTS. THE MAGNITUDE OF THIS 2 NEED ALSO REQUIRES THAT IT BE DONE ON A TIME-PHASED, COST- 3 MANAGED AND PLANNED BASIS. 4 (7) ELIGIBLE CHILDREN IN THIS COMMONWEALTH SHOULD HAVE 5 ACCESS TO COST-EFFECTIVE, COMPREHENSIVE PRIMARY HEALTH COVERAGE 6 IF THEY ARE UNABLE TO AFFORD COVERAGE OR OBTAIN IT. 7 (8) CARE SHOULD BE PROVIDED IN APPROPRIATE SETTINGS BY 8 EFFICIENT PROVIDERS, CONSISTENT WITH HIGH QUALITY CARE AND AT AN 9 APPROPRIATE STAGE, SOON ENOUGH TO AVERT THE NEED FOR OVERLY 10 EXPENSIVE TREATMENT. 11 (9) EQUITY SHOULD BE ASSURED AMONG HEALTH PROVIDERS AND 12 PAYORS BY PROVIDING A MECHANISM FOR PROVIDERS, EMPLOYERS, THE 13 PUBLIC SECTOR AND PATIENTS TO SHARE IN FINANCING INDIGENT 14 CHILDREN'S HEALTH CARE. 15 SECTION 2303. DEFINITIONS.--AS USED IN THIS ARTICLE, THE 16 FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO 17 THEM IN THIS SECTION: 18 "CHILD." A PERSON UNDER NINETEEN (19) YEARS OF AGE. 19 "CHILDREN'S MEDICAL ASSISTANCE." MEDICAL ASSISTANCE SERVICES 20 TO CHILDREN AS REQUIRED UNDER TITLE XIV OF THE SOCIAL SECURITY 21 ACT (49 STAT. 620, 42 U.S.C. § 301 ET SEQ.), INCLUDING EPSDT 22 SERVICES. 23 "CONTRACTOR." AN ENTITY AWARDED A CONTRACT UNDER SUBARTICLE 24 (B) TO PROVIDE HEALTH CARE SERVICES UNDER THIS ARTICLE. THE TERM 25 INCLUDES AN ENTITY AND ITS SUBSIDIARY WHICH IS ESTABLISHED UNDER 26 40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN CORPORATIONS) OR 63 27 (RELATING TO PROFESSIONAL HEALTH SERVICES PLAN CORPORATIONS); 28 THIS ACT; OR THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), 29 KNOWN AS THE "HEALTH MAINTENANCE ORGANIZATION ACT." 30 "COUNCIL." THE CHILDREN'S HEALTH ADVISORY COUNCIL 19970S0091B2082 - 55 -
1 ESTABLISHED IN SECTION 2311(I). 2 "EPSDT." EARLY AND PERIODIC SCREENING, DIAGNOSIS AND 3 TREATMENT. 4 "FUND." THE CHILDREN'S HEALTH FUND FOR HEALTH CARE FOR 5 INDIGENT CHILDREN ESTABLISHED BY SECTION 1296 OF THE ACT OF 6 MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE "TAX REFORM CODE OF 7 1971." 8 "GENETIC STATUS." THE PRESENCE OF A PHYSICAL CONDITION IN AN 9 INDIVIDUAL WHICH IS A RESULT OF AN INHERITED TRAIT. 10 "GROUP." A GROUP FOR WHICH A HEALTH INSURANCE POLICY IS 11 WRITTEN IN THIS COMMONWEALTH. 12 "HEALTH MAINTENANCE ORGANIZATION" OR "HMO." AN ENTITY 13 ORGANIZED AND REGULATED UNDER THE ACT OF DECEMBER 29, 1972 14 (P.L.1701, NO.364), KNOWN AS THE "HEALTH MAINTENANCE 15 ORGANIZATION ACT." 16 "HEALTH SERVICE CORPORATION." A PROFESSIONAL HEALTH SERVICE 17 CORPORATION AS DEFINED IN 40 PA.C.S. § 6302 (RELATING TO 18 DEFINITIONS). 19 "HOSPITAL." AN INSTITUTION HAVING AN ORGANIZED MEDICAL STAFF 20 WHICH IS ENGAGED PRIMARILY IN PROVIDING TO INPATIENTS, BY OR 21 UNDER THE SUPERVISION OF PHYSICIANS, DIAGNOSTIC AND THERAPEUTIC 22 SERVICES FOR THE CARE OF INJURED, DISABLED, PREGNANT, DISEASED 23 OR SICK OR MENTALLY ILL PERSONS. THE TERM INCLUDES FACILITIES 24 FOR THE DIAGNOSIS AND TREATMENT OF DISORDERS WITHIN THE SCOPE OF 25 SPECIFIC MEDICAL SPECIALTIES. THE TERM DOES NOT INCLUDE 26 FACILITIES CARING EXCLUSIVELY FOR THE MENTALLY ILL. 27 "HOSPITAL PLAN CORPORATION." A HOSPITAL PLAN CORPORATION AS 28 DEFINED IN 40 PA.C.S. § 6101 (RELATING TO DEFINITIONS). 29 "INSURER." ANY INSURANCE COMPANY, ASSOCIATION, RECIPROCAL, 30 NONPROFIT HOSPITAL PLAN CORPORATION, NONPROFIT PROFESSIONAL 19970S0091B2082 - 56 -
1 HEALTH SERVICE PLAN, HEALTH MAINTENANCE ORGANIZATION, FRATERNAL 2 BENEFITS SOCIETY OR A RISK-BEARING PPO OR NONRISK-BEARING PPO 3 NOT GOVERNED AND REGULATED UNDER THE EMPLOYEE RETIREMENT INCOME 4 SECURITY ACT OF 1974 (PUBLIC LAW 93-406, 29 U.S.C. § 1001 ET 5 SEQ.). 6 "MAAC." THE MEDICAL ASSISTANCE ADVISORY COMMITTEE. 7 "MANAGED CARE ORGANIZATION." HEALTH MAINTENANCE ORGANIZATION 8 ORGANIZED AND REGULATED UNDER THE ACT OF DECEMBER 29, 1972 9 (P.L.1701, NO.364), KNOWN AS THE "HEALTH MAINTENANCE 10 ORGANIZATION ACT," OR A RISK-ASSUMING PREFERRED PROVIDER 11 ORGANIZATION OR EXCLUSIVE PROVIDER ORGANIZATION, ORGANIZED AND 12 REGULATED UNDER THIS ACT. 13 "MCH." MATERNAL AND CHILD HEALTH. 14 "MEDICAID." THE FEDERAL MEDICAL ASSISTANCE PROGRAM 15 ESTABLISHED UNDER TITLE XIX OF THE SOCIAL SECURITY ACT (49 STAT. 16 620, 42 U.S.C. § 1396 ET SEQ.). 17 "MEDICAL ASSISTANCE." THE STATE PROGRAM OF MEDICAL 18 ASSISTANCE ESTABLISHED UNDER THE ACT OF JUNE 13, 1967 (P.L.31, 19 NO.21), KNOWN AS THE "PUBLIC WELFARE CODE." 20 "MID-LEVEL HEALTH PROFESSIONAL." A PHYSICIAN ASSISTANT, 21 CERTIFIED REGISTERED NURSE PRACTITIONER, NURSE PRACTITIONER OR A 22 CERTIFIED NURSE MIDWIFE. 23 "PARENT." A NATURAL PARENT, STEPPARENT, ADOPTIVE PARENT, 24 GUARDIAN OR CUSTODIAN OF A CHILD. 25 "PPO." A PREFERRED PROVIDER ORGANIZATION SUBJECT TO THE 26 PROVISIONS OF SECTION 630. 27 "PREEXISTING CONDITION." A DISEASE OR PHYSICAL CONDITION FOR 28 WHICH MEDICAL ADVICE OR TREATMENT HAS BEEN RECEIVED PRIOR TO THE 29 EFFECTIVE DATE OF COVERAGE. 30 "SUBGROUP." AN EMPLOYER COVERED UNDER A CONTRACT ISSUED TO A 19970S0091B2082 - 57 -
1 MULTIPLE EMPLOYER TRUST OR TO AN ASSOCIATION. 2 "TERMINATE." INCLUDES CANCELLATION, NONRENEWAL AND 3 RESCISSION. 4 "WAITING PERIOD." A PERIOD OF TIME AFTER THE EFFECTIVE DATE 5 OF ENROLLMENT DURING WHICH A HEALTH INSURANCE PLAN EXCLUDES 6 COVERAGE FOR THE DIAGNOSIS OR TREATMENT OF ONE OR MORE MEDICAL 7 CONDITIONS. 8 "WIC." THE FEDERAL SUPPLEMENTAL FOOD PROGRAM FOR WOMEN, 9 INFANTS AND CHILDREN. 10 (B) PRIMARY HEALTH CARE PROGRAMS 11 SECTION 2311. CHILDREN'S HEALTH CARE.--(A) THE FUND SHALL 12 BE DEDICATED EXCLUSIVELY FOR DISTRIBUTION BY THE INSURANCE 13 DEPARTMENT THROUGH CONTRACTS IN ORDER TO PROVIDE FREE AND 14 SUBSIDIZED HEALTH CARE SERVICES UNDER THIS SECTION AND TO 15 DEVELOP AND IMPLEMENT OUTREACH ACTIVITIES REQUIRED UNDER SECTION 16 2312. 17 (B) (1) THE FUND SHALL BE USED TO FUND HEALTH CARE SERVICES 18 FOR CHILDREN AS SPECIFIED IN THIS SECTION. THE INSURANCE 19 DEPARTMENT SHALL ASSURE THAT THE PROGRAM IS IMPLEMENTED 20 STATEWIDE. ALL CONTRACTS AWARDED UNDER THIS SECTION SHALL BE 21 AWARDED THROUGH A COMPETITIVE PROCUREMENT PROCESS. THE INSURANCE 22 DEPARTMENT SHALL USE ITS BEST EFFORTS TO ENSURE THAT ELIGIBLE 23 CHILDREN ACROSS THIS COMMONWEALTH HAVE ACCESS TO HEALTH CARE 24 SERVICES TO BE PROVIDED UNDER THIS ARTICLE. 25 (2) NO MORE THAN SEVEN AND ONE-HALF PER CENTUM (7 1/2%) OF 26 THE AMOUNT OF THE CONTRACT MAY BE USED FOR ADMINISTRATIVE 27 EXPENSES OF THE CONTRACTOR. IF, AFTER THE FIRST THREE (3) FULL 28 YEARS OF OPERATION, ANY CONTRACTOR PRESENTS DOCUMENTED EVIDENCE 29 THAT ADMINISTRATIVE EXPENSES ARE IN EXCESS OF SEVEN AND ONE-HALF 30 PER CENTUM (7 1/2%) OF THE AMOUNT OF THE CONTRACT, THE INSURANCE 19970S0091B2082 - 58 -
1 DEPARTMENT MAY MAKE AN ADDITIONAL ALLOTMENT OF FUNDS, NOT TO 2 EXCEED TWO AND ONE-HALF PER CENTUM (2 1/2%) OF THE AMOUNT OF THE 3 CONTRACT, FOR FUTURE ADMINISTRATIVE EXPENSES TO THE CONTRACTOR 4 TO THE EXTENT THAT THE INSURANCE DEPARTMENT FINDS THE EXPENSES 5 REASONABLE AND NECESSARY. 6 (3) NO LESS THAN SEVENTY PER CENTUM (70%) OF THE FUND SHALL 7 BE USED TO PROVIDE THE HEALTH CARE SERVICES PROVIDED UNDER THIS 8 ARTICLE FOR CHILDREN ELIGIBLE FOR FREE CARE UNDER SUBSECTION 9 (D). WHEN THE INSURANCE DEPARTMENT DETERMINES THAT SEVENTY PER 10 CENTUM (70%) OF THE FUND IS NOT NEEDED IN ORDER TO ACHIEVE 11 MAXIMUM ENROLLMENT OF CHILDREN ELIGIBLE FOR FREE CARE AND 12 PROMULGATES A FINAL FORM REGULATION, WITH PROPOSED RULEMAKING 13 OMITTED, THIS PARAGRAPH SHALL EXPIRE. 14 (4) TO ENSURE THAT INPATIENT HOSPITAL CARE IS PROVIDED TO 15 ELIGIBLE CHILDREN, EACH PRIMARY CARE PHYSICIAN PROVIDING PRIMARY 16 CARE SERVICES SHALL MAKE NECESSARY ARRANGEMENTS FOR ADMISSION TO 17 THE HOSPITAL AND FOR NECESSARY SPECIALTY CARE. 18 (C) (1) ANY ORGANIZATION OR CORPORATION RECEIVING FUNDS 19 FROM THE INSURANCE DEPARTMENT TO PROVIDE COVERAGE OF HEALTH CARE 20 SERVICES SHALL ENROLL, TO THE EXTENT THAT FUNDS ARE AVAILABLE, 21 ANY CHILD WHO MEETS ALL OF THE FOLLOWING: 22 (I) EXCEPT FOR NEWBORNS, HAS BEEN A RESIDENT OF THIS 23 COMMONWEALTH FOR AT LEAST THIRTY (30) DAYS PRIOR TO ENROLLMENT. 24 (II) IS NOT COVERED BY A HEALTH INSURANCE PLAN, A SELF- 25 INSURANCE PLAN OR A SELF-FUNDED PLAN OR IS NOT ELIGIBLE FOR OR 26 COVERED BY MEDICAL ASSISTANCE. 27 (III) IS QUALIFIED BASED ON INCOME UNDER SUBSECTION (D) OR 28 (E). 29 (IV) MEETS THE CITIZENSHIP REQUIREMENTS OF THE MEDICAID 30 PROGRAM ADMINISTERED BY THE DEPARTMENT OF PUBLIC WELFARE. 19970S0091B2082 - 59 -
1 (2) ENROLLMENT MAY NOT BE DENIED ON THE BASIS OF A 2 PREEXISTING CONDITION, NOR MAY DIAGNOSIS OR TREATMENT FOR THE 3 CONDITION BE EXCLUDED BASED ON THE CONDITION'S PREEXISTENCE. 4 (D) THE PROVISION OF HEALTH CARE INSURANCE FOR ELIGIBLE 5 CHILDREN SHALL BE FREE TO A CHILD UNDER NINETEEN (19) YEARS OF 6 AGE WHOSE FAMILY INCOME IS NO GREATER THAN TWO HUNDRED PER 7 CENTUM (200%) OF THE FEDERAL POVERTY LEVEL. 8 (E) (1) THE PROVISION OF HEALTH CARE INSURANCE FOR AN 9 ELIGIBLE CHILD WHO IS UNDER NINETEEN (19) YEARS OF AGE AND WHOSE 10 FAMILY INCOME IS GREATER THAN TWO HUNDRED PER CENTUM (200%) OF 11 THE FEDERAL POVERTY LEVEL BUT NO GREATER THAN TWO HUNDRED 12 THIRTY-FIVE PER CENTUM (235%) OF THE FEDERAL POVERTY LEVEL MAY 13 BE SUBSIDIZED BY THE FUND AT A RATE NOT TO EXCEED FIFTY PER 14 CENTUM (50%). 15 (2) THE DIFFERENCE BETWEEN THE PURE PREMIUM OF THE MINIMUM 16 BENEFIT PACKAGE IN SUBSECTION (L)(6) AND THE SUBSIDY PROVIDED 17 UNDER THIS SUBSECTION SHALL BE THE AMOUNT PAID BY THE FAMILY OF 18 THE ELIGIBLE CHILD PURCHASING THE MINIMUM BENEFIT PACKAGE. 19 (F) THE FAMILY OF AN ELIGIBLE CHILD WHOSE FAMILY INCOME 20 MAKES THE CHILD ELIGIBLE FOR FREE OR SUBSIDIZED CARE BUT WHO 21 CANNOT RECEIVE CARE DUE TO LACK OF FUNDS IN THE FUND MAY 22 PURCHASE COVERAGE FOR THE CHILD AT COST. 23 (G) THE INSURANCE DEPARTMENT SHALL: 24 (1) ADMINISTER THE CHILDREN'S HEALTH CARE PROGRAM PURSUANT 25 TO THIS ARTICLE. 26 (2) REVIEW ALL BIDS AND APPROVE AND EXECUTE ALL CONTRACTS 27 FOR THE PURPOSE OF EXPANDING ACCESS TO HEALTH CARE SERVICES FOR 28 ELIGIBLE CHILDREN AS PROVIDED FOR IN THIS SUBARTICLE. 29 (3) CONDUCT MONITORING AND OVERSIGHT OF CONTRACTS ENTERED 30 INTO. 19970S0091B2082 - 60 -
1 (4) ISSUE AN ANNUAL REPORT TO THE GOVERNOR, THE GENERAL 2 ASSEMBLY AND THE PUBLIC FOR EACH FISCAL YEAR OUTLINING PRIMARY 3 HEALTH SERVICES FUNDED FOR THE YEAR, DETAILING THE OUTREACH AND 4 ENROLLMENT EFFORTS, AND REPORTING BY COUNTY THE NUMBER OF 5 CHILDREN RECEIVING HEALTH CARE SERVICES FROM THE FUND, THE 6 PROJECTED NUMBER OF ELIGIBLE CHILDREN AND THE NUMBER OF ELIGIBLE 7 CHILDREN ON WAITING LISTS FOR HEALTH CARE SERVICES. 8 (5) IN CONSULTATION WITH APPROPRIATE COMMONWEALTH AGENCIES, 9 COORDINATE THE DEVELOPMENT AND SUPERVISION OF THE OUTREACH PLAN 10 REQUIRED UNDER SECTION 2312. 11 (6) IN CONSULTATION WITH APPROPRIATE COMMONWEALTH AGENCIES, 12 MONITOR, REVIEW AND EVALUATE THE ADEQUACY, ACCESSIBILITY AND 13 AVAILABILITY OF SERVICES DELIVERED TO CHILDREN WHO ARE ENROLLED 14 IN THE HEALTH INSURANCE PROGRAM ESTABLISHED UNDER THIS 15 SUBARTICLE. 16 (H) THE INSURANCE DEPARTMENT MAY PROMULGATE REGULATIONS 17 NECESSARY FOR THE IMPLEMENTATION AND ADMINISTRATION OF THIS 18 SUBARTICLE. 19 (I) THE CHILDREN'S HEALTH ADVISORY COUNCIL IS ESTABLISHED 20 WITHIN THE INSURANCE DEPARTMENT AS AN ADVISORY COUNCIL. THE 21 FOLLOWING SHALL APPLY: 22 (1) THE COUNCIL SHALL CONSIST OF FOURTEEN VOTING MEMBERS. 23 MEMBERS PROVIDED FOR IN SUBPARAGRAPHS (IV), (V), (VI), (VII), 24 (VIII), (X) AND (XI) SHALL BE APPOINTED BY THE INSURANCE 25 COMMISSIONER. THE COUNCIL SHALL BE GEOGRAPHICALLY BALANCED ON A 26 STATEWIDE BASIS AND SHALL INCLUDE: 27 (I) THE SECRETARY OF HEALTH EX OFFICIO OR A DESIGNEE. 28 (II) THE INSURANCE COMMISSIONER EX OFFICIO OR A DESIGNEE. 29 (III) THE SECRETARY OF PUBLIC WELFARE EX OFFICIO OR A 30 DESIGNEE. 19970S0091B2082 - 61 -
1 (IV) A REPRESENTATIVE WITH EXPERIENCE IN CHILDREN'S HEALTH 2 FROM A SCHOOL OF PUBLIC HEALTH LOCATED IN THIS COMMONWEALTH. 3 (V) A PHYSICIAN WITH EXPERIENCE IN CHILDREN'S HEALTH 4 APPOINTED FROM A LIST OF THREE QUALIFIED PERSONS RECOMMENDED BY 5 THE PENNSYLVANIA MEDICAL SOCIETY. 6 (VI) A REPRESENTATIVE OF A CHILDREN'S HOSPITAL OR A HOSPITAL 7 WITH A PEDIATRIC OUTPATIENT CLINIC APPOINTED FROM A LIST OF 8 THREE PERSONS SUBMITTED BY THE HOSPITAL ASSOCIATION OF 9 PENNSYLVANIA. 10 (VII) A PARENT OF A CHILD WHO RECEIVES PRIMARY HEALTH CARE 11 COVERAGE FROM THE FUND. 12 (VIII) A MIDLEVEL PROFESSIONAL APPOINTED FROM LISTS OF NAMES 13 RECOMMENDED BY STATEWIDE ASSOCIATIONS REPRESENTING MIDLEVEL 14 HEALTH PROFESSIONALS. 15 (IX) A SENATOR APPOINTED BY THE PRESIDENT PRO TEMPORE OF THE 16 SENATE, A SENATOR APPOINTED BY THE MINORITY LEADER OF THE 17 SENATE, A REPRESENTATIVE APPOINTED BY THE SPEAKER OF THE HOUSE 18 OF REPRESENTATIVES AND A REPRESENTATIVE APPOINTED BY THE 19 MINORITY LEADER OF THE HOUSE OF REPRESENTATIVES. 20 (X) A REPRESENTATIVE FROM A PRIVATE NONPROFIT FOUNDATION. 21 (XI) A REPRESENTATIVE OF BUSINESS WHO IS NOT A CONTRACTOR OR 22 PROVIDER OF PRIMARY HEALTH CARE INSURANCE UNDER THIS SUBARTICLE. 23 (2) IF ANY SPECIFIED ORGANIZATION SHOULD CEASE TO EXIST OR 24 FAIL TO MAKE A RECOMMENDATION WITHIN NINETY (90) DAYS OF A 25 REQUEST TO DO SO, THE COUNCIL SHALL SPECIFY A NEW EQUIVALENT 26 ORGANIZATION TO FULFILL THE RESPONSIBILITIES OF THIS SECTION. 27 (3) THE INSURANCE COMMISSIONER SHALL CHAIR THE COUNCIL. THE 28 MEMBERS OF THE COUNCIL SHALL ANNUALLY ELECT, BY A MAJORITY VOTE 29 OF THE MEMBERS, A VICE CHAIRPERSON FROM AMONG THE MEMBERS OF THE 30 COUNCIL. 19970S0091B2082 - 62 -
1 (4) THE PRESENCE OF EIGHT MEMBERS SHALL CONSTITUTE A QUORUM 2 FOR THE TRANSACTING OF ANY BUSINESS. ANY ACT BY A MAJORITY OF 3 THE MEMBERS PRESENT AT ANY MEETING AT WHICH THERE IS A QUORUM 4 SHALL BE DEEMED TO BE THAT OF THE COUNCIL. 5 (5) ALL MEETINGS OF THE COUNCIL SHALL BE CONDUCTED PURSUANT 6 TO THE ACT OF JULY 3, 1986 (P.L.388, NO.84), KNOWN AS THE 7 "SUNSHINE ACT," UNLESS OTHERWISE PROVIDED IN THIS SECTION. THE 8 COUNCIL SHALL MEET AT LEAST ANNUALLY AND MAY PROVIDE FOR SPECIAL 9 MEETINGS AS IT DEEMS NECESSARY. MEETING DATES SHALL BE SET BY A 10 MAJORITY VOTE OF MEMBERS OF THE COUNCIL OR BY CALL OF THE 11 CHAIRPERSON UPON SEVEN (7) DAYS' NOTICE TO ALL MEMBERS. THE 12 COUNCIL SHALL PUBLISH NOTICE OF ITS MEETINGS IN THE PENNSYLVANIA 13 BULLETIN. NOTICE SHALL SPECIFY THE DATE, TIME AND PLACE OF THE 14 MEETING AND SHALL STATE THAT THE COUNCIL'S MEETINGS ARE OPEN TO 15 THE GENERAL PUBLIC. ALL ACTION TAKEN BY THE COUNCIL SHALL BE 16 TAKEN IN OPEN PUBLIC SESSION AND SHALL NOT BE TAKEN EXCEPT UPON 17 A MAJORITY VOTE OF THE MEMBERS PRESENT AT A MEETING AT WHICH A 18 QUORUM IS PRESENT. 19 (6) THE MEMBERS OF THE COUNCIL SHALL NOT RECEIVE A SALARY OR 20 PER DIEM ALLOWANCE FOR SERVING AS MEMBERS OF THE COUNCIL BUT 21 SHALL BE REIMBURSED FOR ACTUAL AND NECESSARY EXPENSES INCURRED 22 IN THE PERFORMANCE OF THEIR DUTIES. 23 (7) TERMS OF COUNCIL MEMBERS SHALL BE AS FOLLOWS: 24 (I) THE APPOINTED MEMBERS SHALL SERVE FOR A TERM OF THREE 25 (3) YEARS AND SHALL CONTINUE TO SERVE THEREAFTER UNTIL THEIR 26 SUCCESSORS ARE APPOINTED. 27 (II) AN APPOINTED MEMBER SHALL NOT BE ELIGIBLE TO SERVE MORE 28 THAN TWO FULL CONSECUTIVE TERMS OF THREE (3) YEARS. VACANCIES 29 SHALL BE FILLED IN THE SAME MANNER IN WHICH THEY WERE DESIGNATED 30 WITHIN SIXTY (60) DAYS OF THE VACANCY. 19970S0091B2082 - 63 -
1 (III) AN APPOINTED MEMBER MAY BE REMOVED BY THE APPOINTING 2 AUTHORITY FOR JUST CAUSE AND BY A VOTE OF AT LEAST SEVEN MEMBERS 3 OF THE COUNCIL. 4 (8) THE COUNCIL SHALL REVIEW OUTREACH ACTIVITIES AND MAY 5 MAKE RECOMMENDATIONS TO THE INSURANCE DEPARTMENT. 6 (9) THE COUNCIL SHALL REVIEW AND EVALUATE THE ACCESSIBILITY 7 AND AVAILABILITY OF SERVICES DELIVERED TO CHILDREN ENROLLED IN 8 THE PROGRAM. 9 (J) THE INSURANCE DEPARTMENT SHALL SOLICIT BIDS AND AWARD 10 CONTRACTS THROUGH A COMPETITIVE PROCUREMENT PROCESS PURSUANT TO 11 THE FOLLOWING: 12 (1) TO THE FULLEST EXTENT PRACTICABLE, CONTRACTS SHALL BE 13 AWARDED TO ENTITIES THAT CONTRACT WITH PROVIDERS TO PROVIDE 14 PRIMARY CARE SERVICES FOR ENROLLEES ON A COST-EFFECTIVE BASIS. 15 THE INSURANCE DEPARTMENT SHALL REQUIRE CONTRACTORS TO USE 16 APPROPRIATE COST-MANAGEMENT METHODS SO THAT THE FUND CAN BE USED 17 TO PROVIDE THE BASIC PRIMARY BENEFIT SERVICES TO THE MAXIMUM 18 NUMBER OF ELIGIBLE CHILDREN AND, WHENEVER POSSIBLE, TO PURSUE 19 AND UTILIZE AVAILABLE PUBLIC AND PRIVATE FUNDS. 20 (2) TO THE FULLEST EXTENT PRACTICABLE, THE INSURANCE 21 DEPARTMENT SHALL REQUIRE THAT ANY CONTRACTOR COMPLY WITH ALL 22 PROCEDURES RELATING TO COORDINATION OF BENEFITS AS REQUIRED BY 23 THE INSURANCE DEPARTMENT OR THE DEPARTMENT OF PUBLIC WELFARE. 24 (3) CONTRACTS MAY BE FOR A TERM OF UP TO THREE (3) YEARS. 25 (K) UPON RECEIPT OF A REQUEST FOR PROPOSAL FROM THE 26 INSURANCE DEPARTMENT, EACH HEALTH PLAN CORPORATION OR ITS 27 ENTITIES DOING BUSINESS IN THIS COMMONWEALTH SHALL SUBMIT A BID 28 TO THE INSURANCE DEPARTMENT TO CARRY OUT THE PURPOSES OF THIS 29 SECTION IN THE AREA SERVICED BY THE CORPORATION. 30 (L) A CONTRACTOR WITH WHOM THE INSURANCE DEPARTMENT ENTERS 19970S0091B2082 - 64 -
1 INTO A CONTRACT SHALL DO THE FOLLOWING: 2 (1) ENSURE TO THE MAXIMUM EXTENT POSSIBLE THAT ELIGIBLE 3 CHILDREN HAVE ACCESS TO PRIMARY HEALTH CARE PHYSICIANS AND NURSE 4 PRACTITIONERS ON AN EQUITABLE STATEWIDE BASIS. 5 (2) CONTRACT WITH QUALIFIED, COST-EFFECTIVE PROVIDERS, WHICH 6 MAY INCLUDE PRIMARY HEALTH CARE PHYSICIANS, NURSE PRACTITIONERS, 7 CLINICS AND HEALTH MAINTENANCE ORGANIZATIONS, TO PROVIDE PRIMARY 8 AND PREVENTIVE HEALTH CARE FOR ENROLLEES ON A BASIS BEST 9 CALCULATED TO MANAGE THE COSTS OF THE SERVICES, INCLUDING, BUT 10 NOT LIMITED TO, USING MANAGED HEALTH CARE TECHNIQUES AND OTHER 11 APPROPRIATE MEDICAL COST-MANAGEMENT METHODS. 12 (3) ENSURE THAT THE FAMILY OF A CHILD WHO MAY BE ELIGIBLE 13 FOR MEDICAL ASSISTANCE RECEIVES ASSISTANCE IN APPLYING FOR 14 MEDICAL ASSISTANCE, INCLUDING, AT A MINIMUM, WRITTEN NOTICE OF 15 THE TELEPHONE NUMBER AND ADDRESS OF THE COUNTY ASSISTANCE OFFICE 16 WHERE THE FAMILY CAN APPLY FOR MEDICAL ASSISTANCE. 17 (4) MAINTAIN WAITING LISTS OF CHILDREN FINANCIALLY ELIGIBLE 18 FOR BENEFITS WHO HAVE APPLIED FOR BENEFITS BUT WHO WERE NOT 19 ENROLLED DUE TO LACK OF FUNDS. 20 (5) STRONGLY ENCOURAGE ALL PROVIDERS WHO PROVIDE PRIMARY 21 CARE TO ELIGIBLE CHILDREN TO PARTICIPATE IN MEDICAL ASSISTANCE 22 AS QUALIFIED EPSDT PROVIDERS AND TO CONTINUE TO PROVIDE CARE TO 23 CHILDREN WHO BECOME INELIGIBLE FOR PAYMENT UNDER THE FUND BUT 24 WHO QUALIFY FOR MEDICAL ASSISTANCE. 25 (6) PROVIDE THE FOLLOWING MINIMUM BENEFIT PACKAGE FOR 26 ELIGIBLE CHILDREN: 27 (I) PREVENTIVE CARE. THIS SUBPARAGRAPH INCLUDES WELL-CHILD 28 CARE VISITS IN ACCORDANCE WITH THE SCHEDULE ESTABLISHED BY THE 29 AMERICAN ACADEMY OF PEDIATRICS AND THE SERVICES RELATED TO THOSE 30 VISITS, INCLUDING, BUT NOT LIMITED TO, IMMUNIZATIONS, HEALTH 19970S0091B2082 - 65 -
1 EDUCATION, TUBERCULOSIS TESTING AND DEVELOPMENTAL SCREENING IN 2 ACCORDANCE WITH ROUTINE SCHEDULE OF WELL-CHILD VISITS. CARE 3 SHALL ALSO INCLUDE A COMPREHENSIVE PHYSICAL EXAMINATION, 4 INCLUDING X-RAYS IF NECESSARY, FOR ANY CHILD EXHIBITING SYMPTOMS 5 OF POSSIBLE CHILD ABUSE. 6 (II) DIAGNOSIS AND TREATMENT OF ILLNESS OR INJURY, INCLUDING 7 ALL MEDICALLY NECESSARY SERVICES RELATED TO THE DIAGNOSIS AND 8 TREATMENT OF SICKNESS AND INJURY AND OTHER CONDITIONS PROVIDED 9 ON AN AMBULATORY BASIS, SUCH AS LABORATORY TESTS, WOUND DRESSING 10 AND CASTING TO IMMOBILIZE FRACTURES. 11 (III) INJECTIONS AND MEDICATIONS PROVIDED AT THE TIME OF THE 12 OFFICE VISIT OR THERAPY; AND OUTPATIENT SURGERY PERFORMED IN THE 13 OFFICE, A HOSPITAL OR FREESTANDING AMBULATORY SERVICE CENTER, 14 INCLUDING ANESTHESIA PROVIDED IN CONJUNCTION WITH SUCH SERVICE 15 OR DURING EMERGENCY MEDICAL SERVICE. 16 (IV) EMERGENCY ACCIDENT AND EMERGENCY MEDICAL CARE. 17 (V) PRESCRIPTION DRUGS. 18 (VI) EMERGENCY, PREVENTIVE AND ROUTINE DENTAL CARE. THIS 19 SUBPARAGRAPH DOES NOT INCLUDE ORTHODONTIA OR COSMETIC SURGERY. 20 (VII) EMERGENCY, PREVENTIVE AND ROUTINE VISION CARE, 21 INCLUDING THE COST OF CORRECTIVE LENSES AND FRAMES, NOT TO 22 EXCEED TWO PRESCRIPTIONS PER YEAR. 23 (VIII) EMERGENCY, PREVENTIVE AND ROUTINE HEARING CARE. 24 (IX) INPATIENT HOSPITALIZATION UP TO NINETY (90) DAYS PER 25 YEAR FOR ELIGIBLE CHILDREN. 26 (7) EACH CONTRACTOR SHALL PROVIDE AN INSURANCE 27 IDENTIFICATION CARD TO EACH ELIGIBLE CHILD COVERED UNDER 28 CONTRACTS EXECUTED UNDER THIS ARTICLE. THE CARD MUST NOT 29 SPECIFICALLY IDENTIFY THE HOLDER AS LOW INCOME. 30 (M) THE INSURANCE DEPARTMENT MAY GRANT A WAIVER OF THE 19970S0091B2082 - 66 -
1 MINIMUM BENEFIT PACKAGE OF SUBSECTION (L)(6) UPON DEMONSTRATION 2 BY THE APPLICANT THAT IT IS PROVIDING HEALTH CARE SERVICES FOR 3 ELIGIBLE CHILDREN THAT MEET THE PURPOSES AND INTENT OF THIS 4 SECTION. 5 (N) AFTER THE FIRST YEAR OF OPERATION AND PERIODICALLY 6 THEREAFTER, THE INSURANCE DEPARTMENT IN CONSULTATION WITH 7 APPROPRIATE COMMONWEALTH AGENCIES, SHALL REVIEW ENROLLMENT 8 PATTERNS FOR BOTH THE FREE INSURANCE PROGRAM AND THE SUBSIDIZED 9 INSURANCE PROGRAM. THE INSURANCE DEPARTMENT SHALL CONSIDER THE 10 RELATIONSHIP, IF ANY, AMONG ENROLLMENT, ENROLLMENT FEES, INCOME 11 LEVELS AND FAMILY COMPOSITION. BASED ON THE RESULTS OF THIS 12 STUDY AND THE AVAILABILITY OF FUNDS, THE INSURANCE DEPARTMENT IS 13 AUTHORIZED TO ADJUST THE MAXIMUM INCOME CEILING FOR FREE 14 INSURANCE AND THE MAXIMUM INCOME CEILING FOR SUBSIDIZED 15 INSURANCE BY REGULATION. IN NO EVENT, HOWEVER, SHALL THE MAXIMUM 16 INCOME CEILING FOR FREE INSURANCE BE RAISED ABOVE TWO HUNDRED 17 PER CENTUM (200%) OF THE FEDERAL POVERTY LEVEL, NOR SHALL THE 18 MAXIMUM INCOME CEILING FOR SUBSIDIZED INSURANCE BE RAISED ABOVE 19 TWO HUNDRED THIRTY-FIVE PER CENTUM (235%) OF THE FEDERAL POVERTY 20 LEVEL. CHANGES IN THE MAXIMUM INCOME CEILING SHALL BE 21 PROMULGATED AS A FINAL-FORM REGULATION WITH PROPOSED RULEMAKING 22 OMITTED IN ACCORDANCE WITH THE ACT OF JUNE 25, 1982 (P.L.633, 23 NO.181), KNOWN AS THE "REGULATORY REVIEW ACT." 24 SECTION 2312. OUTREACH.--(A) THE INSURANCE DEPARTMENT, IN 25 CONSULTATION WITH APPROPRIATE COMMONWEALTH AGENCIES, SHALL 26 COORDINATE THE DEVELOPMENT OF AN OUTREACH PLAN TO INFORM 27 POTENTIAL CONTRACTORS, PROVIDERS AND ENROLLEES REGARDING 28 ELIGIBILITY AND AVAILABLE BENEFITS. THE PLAN SHALL INCLUDE 29 PROVISIONS FOR REACHING SPECIAL POPULATIONS, INCLUDING NONWHITE 30 AND NON-ENGLISH-SPEAKING CHILDREN AND CHILDREN WITH 19970S0091B2082 - 67 -
1 DISABILITIES; FOR REACHING DIFFERENT GEOGRAPHIC AREAS, INCLUDING 2 RURAL AND INNER-CITY AREAS; AND FOR ASSURING THAT SPECIAL 3 EFFORTS ARE COORDINATED WITHIN THE OVERALL OUTREACH ACTIVITIES 4 THROUGHOUT THIS COMMONWEALTH. 5 (B) THE COUNCIL SHALL REVIEW THE OUTREACH ACTIVITIES AND 6 RECOMMEND CHANGES AS IT DEEMS IN THE BEST INTERESTS OF THE 7 CHILDREN TO BE SERVED. 8 SECTION 2313. PAYOR OF LAST RESORT; INSURANCE COVERAGE.--THE 9 CONTRACTOR SHALL NOT PAY ANY CLAIM ON BEHALF OF AN ENROLLED 10 CHILD UNLESS ALL OTHER FEDERAL, STATE, LOCAL OR PRIVATE 11 RESOURCES AVAILABLE TO THE CHILD OR THE CHILD'S FAMILY ARE 12 UTILIZED FIRST. THE INSURANCE DEPARTMENT, IN COOPERATION WITH 13 THE DEPARTMENT OF PUBLIC WELFARE, SHALL DETERMINE THAT NO OTHER 14 INSURANCE COVERAGE IS AVAILABLE TO THE CHILD THROUGH A CUSTODIAL 15 OR NONCUSTODIAL PARENT ON AN EMPLOYMENT-RELATED OR OTHER GROUP 16 BASIS. IF SUCH INSURANCE COVERAGE IS AVAILABLE, THE INSURANCE 17 DEPARTMENT SHALL REEVALUATE THE CHILD'S ELIGIBILITY UNDER 18 SECTION 2311. 19 (C) THROUGH (F) (RESERVED) 20 (G) MISCELLANEOUS PROVISIONS 21 SECTION 2361. LIMITATION ON EXPENDITURE OF FUNDS.--IN NO 22 CASE SHALL THE TOTAL AMOUNT OF ANNUAL CONTRACT AWARDS AUTHORIZED 23 IN SUBARTICLE (B) EXCEED THE AMOUNT OF CIGARETTE TAX RECEIPTS 24 ANNUALLY DEPOSITED INTO THE FUND PURSUANT TO SECTION 1296 OF THE 25 ACT OF MARCH 4, 1971 (P.L.6, NO.2), KNOWN AS THE "TAX REFORM 26 CODE OF 1971," AND ANY OTHER FEDERAL OR STATE FUNDS RECEIVED 27 THROUGH THE FUND. THE PROVISION OF CHILDREN'S HEALTH CARE 28 THROUGH THE FUND SHALL IN NO WAY CONSTITUTE AN ENTITLEMENT 29 DERIVED FROM THE COMMONWEALTH OR A CLAIM ON ANY OTHER FUNDS OF 30 THE COMMONWEALTH. 19970S0091B2082 - 68 -
1 SECTION 2. ALL ENTITIES RECEIVING GRANTS UNDER THE ACT OF 2 DECEMBER 2, 1992 (P.L.741, NO.113), KNOWN AS THE CHILDREN'S 3 HEALTH CARE ACT, ON THE EFFECTIVE DATE OF THIS SECTION SHALL 4 CONTINUE TO RECEIVE FUNDS AND PROVIDE SERVICES AS REQUIRED UNDER 5 THAT ACT UNTIL NOTICE IS RECEIVED FROM THE INSURANCE DEPARTMENT. 6 SECTION 3. THE FOLLOWING ACTS AND PARTS OF ACTS ARE 7 REPEALED: 8 ACT OF JUNE 5, 1968 (P.L.140, NO.78), ENTITLED "AN ACT 9 REGULATING THE WRITING, CANCELLATION OF OR REFUSAL TO RENEW 10 POLICIES OF AUTOMOBILE INSURANCE; AND IMPOSING POWERS AND 11 DUTIES ON THE INSURANCE COMMISSIONER THEREFOR." 12 SECTIONS 102, 701, 702, 703, 3101, 3102, 3103 AND 3105 OF 13 THE ACT OF DECEMBER 2, 1992 (P.L.741, NO.113), KNOWN AS THE 14 CHILDREN'S HEALTH CARE ACT. 15 SECTION 4. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: 16 (1) THE ADDITION OF ARTICLE XXI OF THE ACT SHALL TAKE 17 EFFECT JANUARY 1, 1999. 18 (2) THE FOLLOWING PROVISIONS SHALL TAKE EFFECT IN 60 19 DAYS: 20 (I) THE ADDITION OF ARTICLE XX OF THE ACT. 21 (II) SECTION 3(1) OF THIS ACT. 22 (3) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT 23 IMMEDIATELY. L17L40WMB/19970S0091B2082 - 69 -