1Providing for payment and reimbursement rates for health care
2service; and imposing duties on the Insurance Department.

3The General Assembly of the Commonwealth of Pennsylvania
4hereby enacts as follows:

5Section 1. Short title.

6This act shall be known and may be cited as the Health Care
7Competition Improvement Act.

8Section 2. Definitions.

9The following words and phrases when used in this act shall
10have the meanings given to them in this section unless the
11context clearly indicates otherwise:

12"Accountable care organization." An organization that meets
13all of the following:

14(1) Consists of a network of health care providers and
15health care facilities that voluntarily coordinate the
16provision of high quality health care services to the
17organization's Medicare patients.

18(2) Has the following goals:

1(i) To provide coordinated health care to ensure
2that the organization's patients receive the proper
3health care services at the proper time.

4(ii) To avoid unnecessary duplication of medical
5care services.

6(iii) To prevent errors in the provision of medical
7care services.

8(3) Shares in the health care cost savings achieved
9through implementation of the goals listed in paragraph (2).

10"CPT codes." The Current Procedural Technology Codes
11developed by the American Medical Association to classify by a
12numeric identifier health care services provided to an
13individual by a health care provider.

14"Department." The Insurance Department of the Commonwealth.

15"DRG codes." The Diagnosis Related Group Codes utilized in
16Medicare to classify hospital cases by the need for similar
17hospital resources by the use of a numeric identifier.

18"HCPCS codes." The Healthcare Common Procedure Coding System
19Codes utilized to classify by a numeric identifier health care
20services provided to an individual by a health care provider.

21"Health care entity." A health care facility or a health
22care provider.

23"Health care facility." A health care facility as defined
24under section 802.1 of the act of July 19, 1979 (P.L.130,
25No.48), known as the Health Care Facilities Act.

26"Health care payer." An individual or a private or public
27entity that is responsible for providing or paying for all or
28part of the cost of health care services covered by a health
29care benefit plan. The term includes, but is not limited to, an
30entity subject to:

1(1) The act of May 17, 1921 (P.L.682, No.284), known as
2The Insurance Company Law of 1921, including:

3(i) a preferred provider organization subject to
4section 630 of The Insurance Company Law of 1921; or

5(ii) a fraternal benefit society subject to Article
6XXIV of The Insurance Company Law of 1921.

7(2) The act of December 29, 1972 (P.L.1701, No.364),
8known as the Health Maintenance Organization Act.

9(3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
10corporations) or 63 (relating to professional health services
11plan corporations).

12(4) An agreement by a self-insured employer or self-
13insured multiple employer trust to provide health care
14benefits to employees and their dependents.

15"Health care provider." A person who is licensed or
16certified by the laws of this Commonwealth to administer health
17care in the ordinary course of business or practice of a
18profession.

19"Health care service." Any medical-surgical, hospital,
20facility or ancillary task or service provided to an individual,
21as identified by any of the following:

22(1) A CPT code.

23(2) A HCPCS code.

24(3) A DRG code.

25"Medicare." The program established under Title XVIII of the
26Social Security Act (49 Stat. 620, 42 U.S.C. § 1395 et seq.).

27"Rate." The amount of payment or reimbursement for the
28provision of a specific health care service by a health care
29entity.

30Section 3. Establishment of rates.

1(a) General rule.--A health care entity may establish a rate
2for a health care service that does not exceed the amounts as
3calculated under subsection (b).

4(b) Limitation.--For each of the three calendar years
5immediately following the implementation of the rates under this
6act, a rate for a health care service shall not exceed the
7percentage change in the components of the Consumer Price Index
8for All Urban Consumers (CPI-U) used to measure seasonally
9adjusted costs for goods and services including medical care
10costs for the most recent calendar year.

11Section 4. Health care entity duties.

12(a) Discrimination prohibited.--

13(1) A health care entity may not discriminate against a
14health care payer that:

15(i) agrees to accept the health care entity's rates
16for health care services; and

17(ii) meets and agrees to adhere to quality standards
18established by the health care payer.

19(2) A health care entity shall not discriminate among
20health care payers described in paragraph (1) by awarding or
21providing any of the following to a health care payer in a
22discriminatory manner:

23(i) Reimbursement of administrative expenses.

24(ii) Preferred access to electronic records.

25(iii) Priority in the provision of medical care
26services for patients of a health care payer.

27(b) Referrals.--A health care entity is prohibited from
28offering or delivering any commission, referral fee or kickback
29to a health care payer or to an agent of a health care payer for
30the referral of any business to the health care entity.

1(c) Equivalent rates.--A health care entity must charge the
2same rate for a health care service to each health care payer
3that agrees to pay the rate.

4Section 5. Rate publication.

5(a) Health care entity.--A health care entity shall:

6(1) Annually post the rate for each health care service
7on its publicly accessible Internet website.

8(2) Annually submit documentation containing the health
9care entity's rates for each health care service to the
10Health Care Cost Containment Council.

11(b) Health Care Cost Containment Council.--The Health Care
12Cost Containment Council shall post the rates for each health
13care entity on its publicly accessible Internet website.

14Section 6. Department duties.

15The department shall:

16(1) Promulgate necessary regulations and forms for the
17implementation of this act.

18(2) Prepare and submit a request for a waiver under
19section 7.

20Section 7. Waiver.

21To the extent necessary, the department shall seek a waiver
22from the Centers for Medicare and Medicaid Services of the
23United States Department of Health and Human Services to approve
24rates in excess of the rates approved for payment under Parts A
25and B of Medicare under the Inpatient Prospective Payment System
26and the Outpatient Prospective Payment System under Medicare. To
27the extent that the request for a waiver under this section is
28approved, payments by health care payers for rates under
29Medicare are included as provided in the waiver approval.

30Section 8. Applicability.

1This act shall apply to all contracts between a health care
2entity and a health care payer entered into on or after the
3effective date of this section. This act shall apply to all
4renewals of contracts on any renewal date which is on or after
5the effective date of this act.

6Section 9. Accountable care organizations.

7Nothing in this act shall be construed to prohibit or limit
8the establishment and operation of accountable care
9organizations.

10Section 10. Effective date.

11This act shall take effect as follows:

12(1) The following sections shall take effect
13immediately:

14(i) Section 6(1).

15(ii) This section.

16(2) The remainder of this act shall take effect in 90
17days.