PRINTER'S NO. 771
No. 685 Session of 2007
INTRODUCED BY LENTZ, MELIO, SHAPIRO, SCAVELLO, BARRAR, BELFANTI,
BISHOP, CALTAGIRONE, CAPPELLI, CURRY, GEORGE, GOODMAN,
HENNESSEY, HORNAMAN, KING, KIRKLAND, KORTZ, LEACH,
M. O'BRIEN, PALLONE, PAYTON, REICHLEY, SABATINA,
McILVAINE SMITH, SOLOBAY, WALKO AND WHEATLEY, MARCH 9, 2007
REFERRED TO COMMITTEE ON INSURANCE, MARCH 9, 2007
AN ACT
1 Providing for fair medical bill payments to certain health care
2 providers and institutions for care, treatments and services
3 covered under health insurance policies.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Fair
8 Reimbursement for Health Care Providers Act.
9 Section 2. Findings.
10 The General Assembly of the Commonwealth of Pennsylvania
11 finds that:
12 (1) Many health care providers and institutions in this
13 Commonwealth receive reimbursements even less than Medicare
14 rates for services they provide for covered care.
15 (2) Health care providers and institutions are currently
16 undercompensated for treatments and services properly covered
17 under health insurance policies.
1 (3) Health care providers and institutions are currently
2 required or asked to enter into reimbursement agreements with
3 health care insurers that provide for inadequate
4 reimbursement.
5 (4) The continuing low reimbursement rates to these
6 providers threaten the health, safety and welfare of the
7 citizens of this Commonwealth because health care providers
8 and institutions may leave this Commonwealth or close down if
9 the low reimbursements continue.
10 (5) Fair reimbursements must be established for health
11 care providers and institutions for services provided to
12 individuals for care, treatments and services covered under
13 health insurance policies.
14 Section 3. Definitions.
15 The following words and phrases when used in this act shall
16 have the meanings given to them in this section unless the
17 context clearly indicates otherwise:
18 "Health insurance policy." An individual or group health
19 insurance policy, contract or plan that provides medical,
20 mental, dental, optical, psychological or health care coverage
21 by a health care facility or licensed health care provider on an
22 expense incurred, service or prepaid basis offered by or is
23 governed under any of the following:
24 (1) The act of May 17, 1921 (P.L.682, No.284), known as
25 The Insurance Company Law of 1921.
26 (2) The act of June 13, 1967 (P.L.31, No.21), known as
27 the Public Welfare Code.
28 (3) The act of December 29, 1972 (P.L.1701, No.364),
29 known as the Health Maintenance Organization Act.
30 (4) The act of May 18, 1976 (P.L.123, No.54), known as
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1 the Individual Accident and Sickness Insurance Minimum
2 Standards Act.
3 (5) A nonprofit corporation subject to 40 Pa.C.S. Chs.
4 61 (relating to hospital plan corporations) and 63 (relating
5 to professional health services plan corporations).
6 "Insurer." An entity that insures an individual or group
7 health insurance policy, contract or plan described under a
8 health insurance policy.
9 Section 4. Fair reimbursements for health care providers and
10 institutions.
11 (a) Rates.--
12 (1) Subject to subsection (b), a health insurance policy
13 that provides coverage to an individual and is effective,
14 delivered, issued, executed or renewed in this Commonwealth
15 on or after the effective date of this section shall provide
16 payment to any health care provider or institution providing
17 any care covered under a health insurance policy for all care
18 including treatment, accommodation, products or services to a
19 covered individual for treatments at a minimum, the lesser
20 of:
21 (i) 110% of the applicable fee schedule, the
22 recommended fee or the inflation index charts; or
23 (ii) 100% of the diagnostic-related groups (DRG)
24 payment;
25 whichever pertains to the specialty service involved,
26 determined to be applicable in this Commonwealth under the
27 Medicare program and its regulations for comparable services
28 at the time the services were rendered or at the provider's
29 usual and customary charge.
30 (2) The fair payment under a health insurance policy for
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1 all care including treatment, accommodation, products or
2 services to a covered individual treatments rendered in this
3 Commonwealth by a physician in one of the four highest rate
4 classes of medical malpractice premiums shall be paid, at a
5 minimum, the lesser of:
6 (i) 125% of the applicable fee schedule, the
7 recommended fee or the inflation index charts; or
8 (ii) 125% of the diagnostic-related groups (DRG)
9 payment;
10 whichever pertains to the specialty service involved,
11 determined to be applicable in this Commonwealth under the
12 Medicare program for comparable services at the time the
13 services were rendered, or the providers' usual and customary
14 charge.
15 (b) Medicare allowance modifications.--
16 (1) The General Assembly finds that the reimbursement
17 allowance applicable in this Commonwealth under the Medicare
18 program is an appropriate basis to calculate payments for
19 care including treatments, accommodations, products or
20 services for care and treatment.
21 (2) Future changes or additions to the Medicare
22 allowances shall apply to this section. If the Insurance
23 Commissioner determines that an allowance under Medicare is
24 not reasonable, the Insurance Commissioner may adopt a
25 different allowance by regulation, which allowance shall be
26 applied against a percentage limitation in this section.
27 (3) If a prevailing charge, fee schedule, recommended
28 fee, inflation index charge or DRG payment is not being
29 calculated under the Medicare program for a particular
30 treatment, accommodation, product or service, the
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1 reimbursement may not be less than 80% of the provider's
2 usual and customary charge.
3 (4) If acute care is provided in an acute care facility
4 to a patient with immediate life-threatening or urgent injury
5 by a Level I or Level II trauma center, accredited by the
6 Pennsylvania Trauma Systems Foundation under the act of July
7 3, 1985 (P.L.164, No.45), known as the Emergency Medical
8 Services Act, or to a major burn injury patient by a burn
9 facility which meets all of the service standards of the
10 American Burn Association, the reimbursement may not be less
11 than the usual or customary charge while the patient is still
12 at an immediate life-threatening or urgent injury level.
13 Section 5. Direct billing to insureds prohibited.
14 No high risk provider or high risk institution subject to
15 this act may:
16 (1) Bill an insured directly, but must bill the insurer
17 for determination of the amount payable.
18 (2) If receiving fair payments under this act, bill or
19 otherwise attempt to collect from an insured the difference
20 between the provider's or institution's full charge and the
21 fair amount paid by the insurer, unless required by a
22 copayment under the health insurance policy.
23 Section 6. Repeals.
24 All acts and parts of acts are repealed insofar as they are
25 inconsistent with this act.
26 Section 7. Effective date.
27 This act shall take effect immediately.
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