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        PRIOR PRINTER'S NOS. 1171, 1756               PRINTER'S NO. 1996

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1000 Session of 2007


        INTRODUCED BY MANDERINO, KENNEY, ADOLPH, ARGALL, BARRAR,
           BELFANTI, BENNINGHOFF, BEYER, BIANCUCCI, BISHOP, BLACKWELL,
           BOYD, BUXTON, CALTAGIRONE, CAPPELLI, CARROLL, CASORIO,
           CIVERA, COHEN, COSTA, CREIGHTON, CURRY, DALLY, DeLUCA,
           DePASQUALE, DERMODY, DeWEESE, DiGIROLAMO, DONATUCCI, EACHUS,
           J. EVANS, FABRIZIO, FAIRCHILD, FRANKEL, FREEMAN, GEIST,
           GEORGE, GERGELY, GIBBONS, GINGRICH, GRELL, GRUCELA, HANNA,
           HARHART, HARKINS, HENNESSEY, HERSHEY, HESS, JAMES, JOSEPHS,
           KAUFFMAN, W. KELLER, KILLION, KING, KORTZ, KOTIK, KULA,
           LEACH, LEVDANSKY, MACKERETH, MAHONEY, MAJOR, MANN, MARKOSEK,
           McCALL, McGEEHAN, McILHATTAN, McILVAINE SMITH, MELIO, MOYER,
           MUNDY, MURT, MUSTIO, MYERS, NAILOR, NICKOL, D. O'BRIEN,
           M. O'BRIEN, OLIVER, O'NEILL, PALLONE, PARKER, PASHINSKI,
           PETRONE, PICKETT, PRESTON, QUIGLEY, RAMALEY, RAPP, RAYMOND,
           READSHAW, REED, REICHLEY, ROEBUCK, ROSS, RUBLEY, SAMUELSON,
           SANTONI, SCAVELLO, SHAPIRO, SHIMKUS, SIPTROTH, K. SMITH,
           M. SMITH, SOLOBAY, SONNEY, STEIL, STERN, R. STEVENSON,
           STURLA, SURRA, SWANGER, TANGRETTI, THOMAS, TRUE, VEREB,
           VULAKOVICH, WAGNER, WALKO, WANSACZ, WATSON, WILLIAMS,
           WOJNAROSKI, YOUNGBLOOD, YUDICHAK, BENNINGTON, LONGIETTI,
           SAINATO, STABACK, LENTZ, SCHRODER, VITALI, CONKLIN, HORNAMAN,
           PHILLIPS, ROHRER, MILNE, HARPER, GABIG AND MANTZ,
           APRIL 3, 2007

        AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
           JUNE 20, 2007

                                     AN ACT

     1  Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
     2     act relating to insurance; amending, revising, and
     3     consolidating the law providing for the incorporation of
     4     insurance companies, and the regulation, supervision, and
     5     protection of home and foreign insurance companies, Lloyds
     6     associations, reciprocal and inter-insurance exchanges, and
     7     fire insurance rating bureaus, and the regulation and
     8     supervision of insurance carried by such companies,
     9     associations, and exchanges, including insurance carried by
    10     the State Workmen's Insurance Fund; providing penalties; and
    11     repealing existing laws," providing for retroactive denial of
    12     reimbursement of payments to health care providers by


     1     insurers and, in quality health care accountability and
     2     protection, for mental health services; and further
     3     providing, in quality health care accountability and
     4     protection, for procedures.

     5     The General Assembly of the Commonwealth of Pennsylvania
     6  hereby enacts as follows:
     7     Section 1.  The act of May 17, 1921 (P.L.682, No.284), known
     8  as The Insurance Company Law of 1921, is amended by adding an
     9  article to read:
    10                            ARTICLE VI-B
    11                RETROACTIVE DENIAL OF REIMBURSEMENTS
    12  § 601-B.  Scope of article.
    13     This article shall not apply to reimbursements made as part
    14  of an annual contracted reconciliation of a risk-sharing
    15  arrangement under an administrative service provider contract.
    16  § 602-B.  Definitions.
    17     The following words and phrases when used in this article
    18  shall have the meanings given to them in this section unless the
    19  context clearly indicates otherwise:
    20     "Code."  Any of the following codes:
    21         (1)  The applicable Current Procedural Terminology (CPT)
    22     code, as adopted by the American Medical Association.
    23         (2)  If for dental service, the applicable code adopted
    24     by the American Dental Association.
    25         (3)  Another applicable code under an appropriate uniform
    26     coding scheme used by an insurer in accordance with this
    27     article.
    28     "Coding guidelines."  Those standards or procedures used or
    29  applied by a payor to determine the most accurate and
    30  appropriate code or codes for payment by the payor for a service
    31  or services.

    20070H1000B1996                  - 2 -     

     1     "Fraud."  The intentional misrepresentation or concealment of
     2  information in order to deceive or mislead.
     3     "Health care provider."  A person, corporation, facility,
     4  institution or other entity licensed, certified or approved by
     5  the Commonwealth to provide health care or professional medical
     6  services. The term includes, but is not limited to, a physician,
     7  chiropractor, optometrist, professional nurse, certified nurse-
     8  midwife, podiatrist, hospital, nursing home, ambulatory surgical
     9  center or birth center.
    10     "Insurer."  An entity subject to any of the following:
    11         (1)  40 Pa.C.S. Ch. 61 (relating to hospital plan
    12     corporations) or 63 (relating to professional health services
    13     plan corporations).
    14         (2)  This act.
    15         (3)  The act of December 29, 1972 (P.L.1701, No.364),
    16     known as the Health Maintenance Organization Act.
    17     "Medical assistance program."  The program established under
    18  the act of June 13, 1967 (P.L.31, No.21), known as the Public
    19  Welfare Code.
    20     "Medicare."  The Federal program established under Title
    21  XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. § 301
    22  et seq. or 1395 et seq.).
    23     "Reimbursement."  Payments made to a health care provider by
    24  an insurer on either a fee-for-service, capitated or premium
    25  basis.
    26  § 603-B.  Retroactive denial of reimbursement.
    27     (a)  General rule.--If an insurer retroactively denies
    28  reimbursement to a health care provider, the insurer may only:
    29         (1)  retroactively deny reimbursement for services
    30     subject to coordination of benefits with another insurer, the
    20070H1000B1996                  - 3 -     

     1     medical assistance program or the Medicare program during the
     2     12-month period after the date that the insurer paid the
     3     health care provider; and
     4         (2)  except as provided in paragraph (1), retroactively
     5     deny reimbursement during a 12-month period after the date
     6     that the insurer paid the health care provider.
     7     (b)  Written notice.--An insurer that retroactively denies
     8  reimbursement to a health care provider under subsection (a)
     9  shall provide the health care provider with a written statement
    10  specifying the basis for the retroactive denial. If the
    11  retroactive denial of reimbursement results from coordination of
    12  benefits, the written statement shall provide the name and
    13  address of the entity acknowledging responsibility for payment
    14  of the denied claim.
    15  § 604-B.  Effect of noncompliance.
    16     Except as provided in section 605-B, an insurer that does not
    17  comply with the provisions of section 603-B may not
    18  retroactively deny reimbursement or attempt in any manner to
    19  retroactively collect reimbursement already paid to a health
    20  care provider.
    21  § 605-B.  Fraudulent or improperly coded information.
    22     (a)  Reasons for denial.--The provisions of section 603-B do
    23  not apply if an insurer retroactively denies reimbursement to a
    24  health care provider because:
    25         (1)  the information submitted to the insurer was
    26     fraudulent;
    27         (2)  the information submitted to the insurer was
    28     improperly coded and the insurer has provided to the health
    29     care provider sufficient information regarding the coding
    30     guidelines used by the insurer at least 30 days prior to the
    20070H1000B1996                  - 4 -     

     1     date the services subject to the retroactive denial were
     2     rendered; or
     3         (3)  the claim submitted to the insurer was a duplicate
     4     claim.
     5     (b)  Improper coding.--Information submitted to the insurer
     6  may be considered to be improperly coded under subsection (a)(2)
     7  if the information submitted to the insurer by the health care
     8  provider:
     9         (1)  uses codes that do not conform with the coding
    10     guidelines used by the carrier applicable as of the date the
    11     service or services were rendered; or
    12         (2)  does not otherwise conform with the contractual
    13     obligations of the health care provider to the insurer
    14     applicable as of the date the service or services were
    15     rendered.
    16  § 606-B.  Coordination of benefits.
    17     If an insurer retroactively denies reimbursement for services
    18  as a result of coordination of benefits under provisions of
    19  section 605-B(a), the health care provider shall have six months
    20  from the date of the denial, unless an insurer permits a longer
    21  time period, to submit a claim for reimbursement for the service
    22  to the insurer, the medical assistance program or Medicare
    23  program responsible for payment.
    24     Section 2.  The act is amended by adding a section to read:
    25     Section 2116.1.  Mental Health Services.--If (A)  EXCEPT AS    <--
    26  SET FORTH IN SUBSECTION (B), IF an enrollee has obtained a
    27  referral or other authorization through utilization review from
    28  a managed care plan or a licensed insurer to receive outpatient
    29  mental health care services from a health care provider or
    30  specialist, such referral or other authorization shall
    20070H1000B1996                  - 5 -     

     1  constitute a standing referral for any subsequent outpatient
     2  mental health care services provided by any health care provider
     3  or specialist until the mental health care service for which the
     4  referral or authorization was approved has reached its
     5  conclusion.
     6     (B)  THIS SECTION SHALL NOT APPLY TO A MANAGED CARE PLAN OR A  <--
     7  LICENSED INSURER PROVIDING OUTPATIENT MENTAL HEALTH SERVICES OF
     8  MEDICAL ASSISTANCE UNDER ARTICLE IV(F) OF THE ACT OF JUNE 13,
     9  1967 (P.L.31, NO.21), KNOWN AS THE "PUBLIC WELFARE CODE."
    10     Section 3.  Section 2121(b) of the act, added June 17, 1998
    11  (P.L.464, No.68), is amended to read:
    12     Section 2121.  Procedures.--* * *
    13     (b)  The department shall establish credentialing standards
    14  for managed care plans. The department may adopt nationally
    15  recognized accrediting standards to establish the credentialing
    16  standards for managed care plans. With respect to outpatient
    17  behavioral health services, the managed care plan or licensed
    18  insurer shall inform credentialing applicants of a decision
    19  within ninety (90) days after the complete application has been
    20  submitted.
    21     * * *
    22     Section 4.  This act shall take effect in 60 days.






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