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                                                      PRINTER'S NO. 1039

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 877 Session of 2007


        INTRODUCED BY EARLL, ERICKSON, SCARNATI, PILEGGI, BROWNE,
           CORMAN, COSTA, BOSCOLA, FOLMER, MUSTO, ORIE, RAFFERTY,
           REGOLA, ROBBINS, M. WHITE, DINNIMAN, WONDERLING, BAKER,
           MELLOW, WAUGH, MADIGAN, VANCE, D. WHITE AND PICCOLA,
           MAY 21, 2007

        REFERRED TO PUBLIC HEALTH AND WELFARE, MAY 21, 2007

                                     AN ACT

     1  Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
     2     act to consolidate, editorially revise, and codify the public
     3     welfare laws of the Commonwealth," in public assistance,
     4     adding definitions; and further providing for prepayment for
     5     contracted medical services and for established drug
     6     regimens.

     7     The General Assembly of the Commonwealth of Pennsylvania
     8  hereby enacts as follows:
     9     Section 1.  Section 402 of the act of June 13, 1967 (P.L.31,
    10  No.21), known as the Public Welfare Code, is amended by adding
    11  definitions to read:
    12     Section 402.  Definitions.--As used in this article, unless
    13  the content clearly indicates otherwise:
    14     * * *
    15     "Behavioral health care services."  Services provided to
    16  recipients in inpatient or outpatient settings to diagnose,
    17  treat or otherwise manage mental health or substance abuse
    18  diagnoses and disorders.


     1     * * *
     2     "Managed care contractor."  A managed care organization
     3  providing managed care services relating to physical health care
     4  to recipients under one or more contracts with the Department of
     5  Public Welfare for the provision of mandatory managed care or
     6  voluntary managed care.
     7     "Managed care organization."  A public or private
     8  organization that is a federally qualified health maintenance
     9  organization or meets the State plan's definition of a health
    10  maintenance organization or otherwise qualifies as a managed
    11  care plan as defined in Article XXI of the act of May 17, 1921
    12  (P.L.682, No.284), known as "The Insurance Company Law of 1921."
    13     "Mandatory managed care."  The Commonwealth's HealthChoices
    14  Program, which provides mandatory managed health care to
    15  recipients in specified areas of this Commonwealth through
    16  contracts with managed care organizations.
    17     "Medicaid."  The program authorized by Subchapter XIX of the
    18  Social Security Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.),
    19  and subject to regulations promulgated under that act.
    20     "Medical assistance."  The Commonwealth program authorized by
    21  Subchapter XIX of the Social Security Act (49 Stat. 620, 42
    22  U.S.C. § 1396 et seq.), and authorized in this Commonwealth
    23  under this act and subject to regulations promulgated under
    24  Subchapter XIX of the Social Security Act and this act. The term
    25  includes any successor program implemented by either the Federal
    26  Government or the Commonwealth, to the extent a contractor
    27  provides services with respect to the program.
    28     * * *
    29     "Physical health care services."  Services provided to
    30  recipients by contractors including, but not limited to, primary
    20070S0877B1039                  - 2 -     

     1  care, preventive health, specialty physician, outpatient,
     2  inpatient and pharmacy services. The term does not include
     3  behavioral health care services.
     4     * * *
     5     "Recipient."  An individual eligible to receive health care
     6  or health-related services under the medical assistance program.
     7     * * *
     8     "State plan."  The document prepared by the Commonwealth in
     9  the manner required by section 1396a(a) of the Social Security
    10  Act (49 Stat. 620, 42 U.S.C. § 1396a(a)), as approved by the
    11  Centers for Medicare and Medicaid Services, that describes the
    12  nature, scope and operation of the medical assistance program
    13  and gives assurances that the Commonwealth will administer the
    14  program in compliance with Federal requirements. The term shall
    15  include waivers granted by the Centers for Medicare and Medicaid
    16  Services not otherwise included in the plan submitted by the
    17  Commonwealth for Centers for Medicare and Medicaid Services
    18  approval.
    19     * * *
    20     "Voluntary managed care."  The Commonwealth's program, which
    21  provides voluntary managed care to recipients in specified areas
    22  of the Commonwealth through contracts with managed care
    23  organizations.
    24     "Waiver."  A determination made by the Centers for Medicare
    25  and Medicaid Services under Subchapter XIX of the Social
    26  Security Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.), and
    27  regulations promulgated under that act, which allows the
    28  Commonwealth to make modifications in its operation of the
    29  medical assistance program.
    30     * * *
    20070S0877B1039                  - 3 -     

     1     Section 2.  Section 443.5 of the act, added July 15, 1976
     2  (P.L.993, No.202), is amended to read:
     3     Section 443.5.  Prepayment for Contracted Medical Services.--
     4  (a)  For categorically needy or medically needy persons eligible
     5  for medical assistance, prepaid capitation payments or insurance
     6  premiums for services under the medical assistance State plan
     7  may be made on behalf of eligible persons through competitive
     8  bidding with profit or non-profit contractors, insurers, or
     9  health maintenance organizations. Profit and non-profit insurers
    10  must be approved under applicable State laws. Prepaid capitation
    11  or premium payments made under such contracts shall not exceed
    12  payments made to other third party payers for comparable
    13  services and similar benefit conditions. Capitation payments
    14  charged for anticipated medical assistance eligible persons
    15  under a contract may be prepaid by the Commonwealth subject to
    16  monthly, quarterly, and annual adjustment by the department
    17  based on actual enrollment and fixed capitation rates.
    18     (b)  The department shall administer a program of mandatory
    19  managed care for physical health care services in this
    20  Commonwealth in geographic areas that include:
    21         (1)  The Southeast.
    22         (2)  The Southwest.
    23         (3)  The Lehigh and Capital areas.
    24     (c)  (1)  The department shall also administer a program of
    25     voluntary managed care for recipients residing outside the
    26     geographic areas described in subsection (b). The department
    27     shall contract with no more than five managed care
    28     organizations to serve each county covered by the voluntary
    29     managed care program if managed care contractors are willing
    30     to participate and meet departmental criteria.
    20070S0877B1039                  - 4 -     

     1         (2)  Managed care contractors participating in the
     2     voluntary managed care program shall provide substantially
     3     the same physical health care benefits as are made available
     4     to recipients under the mandatory managed care program.
     5         (3)  The department shall allow recipients to voluntarily
     6     participate in a managed care plan and notify the recipients
     7     of their choices among contractors or fee-for-service
     8     Medicaid.
     9     (d)  The delivery of medical assistance services through a
    10  system of mandatory managed care or voluntary managed care as
    11  provided in subsections (b) and (c) shall be maintained by the
    12  department, unless termination of either of these programs of
    13  services is approved by the General Assembly.
    14     (e)  The chairman and minority chairman of the Public Health
    15  and Welfare Committee of the Senate and the chairman and
    16  minority chairman of the Health and Human Services Committee of
    17  the House of Representatives shall be notified and provided a
    18  copy of any State plan amendment and any waiver request along
    19  with any supporting documents, no later than forty-eight hours
    20  prior to submission of the Commonwealth's State plan amendment
    21  or waiver request to the Centers for Medicare and Medicaid
    22  Services.
    23     Section 3.  Section 459 of the act, added July 7, 2005
    24  (P.L.177, No.42), is amended to read:
    25     Section 459.  Established Drug Regimens.--(a)  When
    26  determining prior authorization criteria for a preferred drug
    27  class, the department shall consider the potential destabilizing
    28  effect on the recipient's health by any change in the
    29  recipient's established drug regimen, including, but not limited
    30  to, prescription drugs for human immunodeficiency virus (HIV),
    20070S0877B1039                  - 5 -     

     1  acquired immune deficiency syndrome (AIDS), behavioral health,
     2  hemophilia, hepatitis C, biologic drugs, immunosuppressants and
     3  anticonvulsants.
     4     (b)  The department shall consider pharmaceutical services a
     5  covered benefit under both mandatory managed care and voluntary
     6  managed care which shall be provided and continued under
     7  contracts with managed care contractors.
     8     Section 4.  This act shall take effect immediately.















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