THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BAKER, PICKETT, GINGRICH, CAUSER, BELFANTI, BEYER, BUXTON, CREIGHTON, EVERETT, FLECK, GIBBONS, GROVE, HESS, LONGIETTI, MAJOR, MICOZZIE, MURT, QUINN, RAPP, REICHLEY, ROHRER, SEIP, STERN, STURLA AND VULAKOVICH, FEBRUARY 13, 2009

REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES, FEBRUARY 13, 2009  

AN ACT

Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An

act to consolidate, editorially revise, and codify the public

welfare laws of the Commonwealth," providing for medical

assistance payments for hospital services; and establishing

the State Health Payment Review Board.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of June 13, 1967 (P.L.31, No.21), known

as the Public Welfare Code, is amended by adding sections to

read:

Section 443.11  Payment Policies for Hospital Inpatient and

Outpatient Services.--Payment rates for services provided by

hospitals enrolled in the medical assistance program shall be

adequate to provide incentives for provider efficiency, to

facilitate beneficiaries' access to high-quality care and to

offer cost-effective care. Stability and predictability in

hospital payment rates are necessary for responsible and

effective planning and budgeting by this Commonwealth and

hospitals.

(1)  Rates shall be supported by factual evidence in

sufficient detail to demonstrate why they are deemed reasonable.

(2)  Rates shall be established and adjusted annually using

accepted and verifiable benchmarks for assessing adequacy,

including calculation of provider costs, comparison to rates

established by federally funded health care programs,

consideration of geographic variations across this Commonwealth

and relationship to providers' clinical activity.

(3)  Rates shall be fair and equitable across and within

categories of hospitals so that comparable services are

comparably reimbursed based on resource use. Fairness and equity

shall be established by assuring, at a minimum, that rates

account for such variables as severity and complexity of

patients' conditions and resources required to treat them, the

number or percentage of indigent patients treated by providers,

and the hospital's health professional education costs.

(4)  Rates shall exclude any disproportionate share or

medical education payments. Disproportionate share payments

shall be based on the number or percentage of low-income persons

served by the hospital. Medical education costs shall reflect

the medical assistance share of actual allowable costs for

medical education.

Section 443.12.  State Health Payment Review Board.--(a)

There is hereby established the State Health Payment Review

Board that shall consist of five members who shall be appointed

in accordance with the following:

(1)  One resident appointed by the Governor who shall serve

as chairman of the review board.

(2)  Four residents of this Commonwealth, one of whom shall

be appointed by the President pro tempore of the Senate, one of

whom shall be appointed by the Minority Leader of the Senate,

one of whom shall be appointed by the Speaker of the House of

Representatives and one of whom shall be appointed by the

Minority Leader of the House of Representatives.

(3)  All appointees shall serve terms coterminous with their

respective appointing authorities. Members of the review board

shall be chosen for their familiarity and experience with health

care finance, economics, delivery or law and have relevant

training and experience, to assist the board in performing its

designated functions. No person shall be chosen who is an

employe of the Commonwealth or of any health care provider. No

member shall participate in any action or decision concerning

any matter in which the member has an economic interest or other

conflict of interest. The appointing authorities shall make

their initial appointments within sixty days of the effective

date of this section.

(4)  Each member of the review board shall be paid travel and

other necessary expenses and compensation at a rate to be fixed

by the Executive Board, as established in the act of April 9,

1929 (P.L.177, No.175), known as "The Administrative Code of

1929."

(5)  The Governor shall appoint counsel to serve and advise

the review board and shall replace such counsel upon request of

the board.

(b)  (1)  The review board shall hear de novo appeals on

payments for inpatient and outpatient hospital services.

(2)  Hearings before the review board shall conform to the

following:

(i)  All hearings before the review board shall be subject to

the right of notice, hearing and adjudication in accordance with

2 Pa.C.S. Chs. 1 (relating to general provisions), 5 (relating

to practice and procedure) and 7 (relating to judicial review),

and a written record shall be kept of said proceedings and a

copy thereof provided to the parties at cost.

(ii)  Persons conducting hearings under this section shall

have the power to subpoena witnesses and documents required for

the hearing, to administer oaths and examine witnesses and

receive evidence in any locality which the hearing body may

designate, having regard to the public convenience and proper

discharge of its functions and duties.

(iii)  Notice of hearings before the board shall be given to

the parties at least twenty-one calendar days in advance of the

hearing.

(iv)  Any party may request an expedited hearing, which

request shall not be unreasonably denied.

(v)  The board shall make best efforts to conclude each

proceeding within one hundred eighty days.

(3)  Decisions of the department regarding payment for

hospital services to medical assistance recipients may be

appealed to the review board. The appeal to the review board

shall be de novo, and shall be limited to issues raised by the

appellant in the specification of objections. Decisions of the

review board relating to payment rates may be appealed to the

Commonwealth Court as provided in paragraph (4) by any party to

the proceeding. Group appeals by hospitals shall be permitted.

(4)  The record made on appeal to the review board shall

contain all of the evidence required to sustain any decisions or

determinations by the department in reaching its decision. The

department may rely upon regulations unless the authority of the

department or the reasonableness of the regulations is

challenged. The record for determining the propriety of the

regulations shall be made before the review board and any

evidence the department may wish to introduce to establish

justification for the regulations shall be submitted at the

hearing. The review board may pass upon the reasonableness of

the regulation and the authority for its promulgation under this

section. An aggrieved party may appeal an adverse decision by

the review board to the Commonwealth Court and should provide

notice of such appeal to the review board within thirty days.

(c)  As used in this section, the term "board" shall mean the

State Health Payment Review Board.

Section 2.  This act shall take effect in 60 days.