Regular Session 2015-2016 House Bill 1141 P.N. 2794

PRINTER'S NO. 2794

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1141

Session of

2015

INTRODUCED BY SAYLOR, GROVE, WARD, PHILLIPS-HILL, MILLARD,

HEFFLEY, MILNE, KAUFFMAN, A. HARRIS, EVERETT AND BAKER,

FEBRUARY 2, 2016

REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, FEBRUARY 2, 2016

AN ACT

Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as

reenacted and amended, "An act defining the liability of an

employer to pay damages for injuries received by an employe

in the course of employment; establishing an elective

schedule of compensation; providing procedure for the

determination of liability and compensation thereunder; and

prescribing penalties," in interpretation and definitions,

further providing for definitions; in liability and

compensation, further providing for schedule of compensation;

and, in procedure, further providing for compensation with or

without agreement and for reporting of injuries by employers.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definition of "health care provider" in

section 109 of the act of June 2, 1915 (P.L.736, No.338), known

as the Workers' Compensation Act, reenacted and amended June 21,

1939 (P.L.520, No.281) and added July 2, 1993 (P.L.190, No.44),

is amended and the section is amended by adding definitions to

read:

Section 109. In addition to the definitions set forth in

this article, the following words and phrases when used in this

act shall have the meanings given to them in this section unless

the context clearly indicates otherwise:

* * *

"Case management" means the planning and coordination of

health care services by a medical case manager or coordinator

with the goal of assisting an injured worker to restore as

nearly as possible the worker's pre-injury level of physical

function. The term includes any of the following:

(1) Case assessment.

(2) Development, implementation and coordination of a care

plan with health care providers, the injured worker and the

injured worker's family.

(3) Evaluation of treatment results.

(4) Planning for community reentry and return to work.

(5) Management of health care treatment and utilization

control.

(6) Referral for further vocational rehabilitation services,

including the participation and educational retraining.

* * *

"Health care provider" means any person, corporation,

facility or institution licensed or otherwise authorized by the

Commonwealth to provide health care services and which has

obtained a valid National Provider Identifier, including, but

not limited to, any physician, coordinated care organization,

hospital, health care facility, dentist, nurse, optometrist,

podiatrist, physical therapist, psychologist, chiropractor or

pharmacist and an officer, employe or agent of such person

acting in the course and scope of employment or agency related

to health care services. The term does not include any person,

partnership, association or corporation which is not licensed by

an agency of the Commonwealth to perform health care services

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and has not obtained a National Provider Identifier.

* * *

"National Provider Identifier" means a unique identification

number obtained by a health care provider from the Centers for

Medicare and Medicaid Services of the United States Department

of Health and Human Services, or a successor agency, in

accordance with the Health Insurance Portability and

Accountability Act of 1996 (Public Law 104-191, 110 Stat. 1936).

* * *

Section 2. Section 306(f.1)(1)(i) and (iii), (2), (3)(i) and

(ii) and (5) of the act, amended June 24, 1996 (P.L.350, No.57),

are amended and the subsection is amended by adding paragraphs

to read:

Section 306. The following schedule of compensation is

hereby established:

* * *

(f.1) (1) (i) The employer shall provide payment in

accordance with this section for reasonable surgical and medical

services, services rendered by physicians or other health care

providers, including an additional opinion when invasive surgery

may be necessary, medicines and supplies, as and when needed.

Provided an employer establishes a list of at least six

designated health care providers, no more than four of whom may

be a coordinated care organization and no fewer than three of

whom shall be physicians, the employe shall be required to visit

one of the physicians or other health care providers so

designated and shall continue to visit the same or another

designated physician or health care provider for a period of

ninety (90) days from the date of the first visit: Provided,

however, That the employer shall not include on the list any

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person, partnership, association or corporation, including a

network, which is not licensed by an agency of the Commonwealth

to perform health care services and has not obtained a National

Provider Identifier, or a physician or other health care

provider who is employed, owned or controlled by the employer or

the employer's insurer unless employment, ownership or control

is disclosed on the list. Should invasive surgery for an employe

be prescribed by a physician or other health care provider so

designated by the employer, the employe shall be permitted to

receive an additional opinion from any health care provider of

the employe's own choice. If the additional opinion differs from

the opinion provided by the physician or health care provider so

designated by the employer, the employe shall determine which

course of treatment to follow: Provided, That the second opinion

provides a specific and detailed course of treatment. If the

employe chooses to follow the procedures designated in the

second opinion, such procedures shall be performed by one of the

physicians or other health care providers so designated by the

employer for a period of ninety (90) days from the date of the

visit to the physician or other health care provider of the

employe's own choice. Should the employe not comply with the

foregoing, the employer will be relieved from liability for the

payment for the services rendered during such applicable period.

It shall be the duty of the employer to provide a clearly

written notification of the employe's rights and duties under

this section to the employe. The employer shall further ensure

that the employe has been informed and that he understands these

rights and duties. This duty shall be evidenced only by the

employe's written acknowledgment of having been informed and

having understood his rights and duties. Any failure of the

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employer to provide and evidence such notification shall relieve

the employe from any notification duty owed, notwithstanding any

provision of this act to the contrary, and the employer shall

remain liable for all rendered treatment. Subsequent treatment

may be provided by any health care provider of the employe's own

choice. Any employe who, next following termination of the

applicable period, is provided treatment from a nondesignated

health care provider shall notify the employer within five (5)

days of the first visit to said health care provider. Failure to

so notify the employer will relieve the employer from liability

for the payment for the services rendered prior to appropriate

notice if such services are determined pursuant to paragraph (6)

to have been unreasonable or unnecessary.

* * *

(iii) Nothing in this section shall prohibit an insurer or

an employer from contracting with any individual, partnership,

association or corporation to provide case management and

coordination of services with regard to injured employes[.] or

to obtain discounted medical services through a bona fide

provider network arrangement. It shall be unlawful for an

insurer, employer or an agent of an insurer or employer to

reimburse a provider in an amount less than the reimbursement

allowances provided for under paragraph (3)(i) and (ii) unless

the provider has executed a legally binding agreement directly

and exclusively with the insurer or employer, or an agent of the

insurer or employer through a bona fide provider network

arrangement. Any discount or reimbursement reduction imposed

below the allowances set forth under paragraph (3)(i) and (ii)

pursuant to a downstream or third party agreement that is not

executed by the provider directly and exclusively with the

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insurer, employer, or an agent of the insurer or employer, shall

be null and void, and shall subject the insurer or employer to

sanctions, including, but not limited to, payment of the full

amount due and owing pursuant to paragraph (3)(i) and (ii),

interest at the rate of twenty-five per centum per annum, costs

and attorney fees, if the insurer or employer's position is

determined to be unreasonable at the discretion of the finder of

fact, and a penalty of fifty per centum of the amount due and

owing. A provider shall have the right to enforce this

subparagraph through a petition filed with a workers'

compensation judge pursuant to paragraph (12). In the event an

insurer or employer enters into an arrangement with any

individual or entity pursuant to this subparagraph, the insurer

or employer shall, within seventy-two (72) hours of executing

such arrangement, notify the department of the arrangement and

provide the name, address and a list of all services the person

or organization will provide pursuant to the arrangeme nt. The

department shall have ten (10) days from the date of receipt of

such notice to post the information contained in the notice on

its publicly accessible Internet website in a conspicuous

location. Any individual, partnership, association or

corporation which knowingly receives compensation or anything of

value to refer, recommend, steer or otherwise direct any injured

employe to a health care provider without performing bona fide

case management and coordination of care services for the

injured employe shall be guilty of a felony of the third degree

and, upon conviction thereof, shall be sentenced to pay a fine

of no more than one hundred thousand dollars ($100,000) or

double the value of the compensation or exchange of anything of

value received, or to undergo imprisonment for a period of not

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more than seven years, or both.

(2) Any provider who treats an injured employe shall be

required to file periodic reports with the employer on a form

prescribed by the department which shall include, where

pertinent, history, diagnosis, treatment, prognosis and physical

findings. The report shall be filed within ten (10) days of

commencing treatment and at least once a month thereafter as

long as treatment continues. The employer shall not be liable to

pay for such treatment until a report has been filed. Beginning

January 1, 2017, an insurer or employer shall accept all reports

submitted by a provider pursuant to this paragraph in an

electronic format. On or before November 1, 2016, the department

shall create and provide an electronic report to be used by

providers and electronic medical record entities to facilitate

electronic submission of the report and electronic submission of

bills pursuant to paragraph (3)(i).

(3) (i) For purposes of this clause, a provider shall not

require, request or accept payment for the treatment,

accommodations, products or services in excess of one hundred

thirteen per centum of the prevailing charge at the seventy-

fifth percentile; one hundred thirteen per centum of the

applicable fee schedule, the recommended fee or the inflation

index charge; one hundred thirteen per centum of the DRG payment

plus pass-through costs and applicable cost or day outliers; or

one hundred thirteen per centum of any other Medicare

reimbursement mechanism, as determined by the Medicare carrier

or intermediary, whichever pertains to the specialty service

involved, determined to be applicable in this Commonwealth under

the Medicare program for comparable services rendered. If the

commissioner determines that an allowance for a particular

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provider group or service under the Medicare program is not

reasonable, it may adopt, by regulation, a new allowance. If the

prevailing charge, fee schedule, recommended fee, inflation

index charge, DRG payment or any other reimbursement has not

been calculated under the Medicare program for a particular

treatment, accommodation, product or service, the amount of the

payment may not exceed eighty per centum of the charge most

often made by providers of similar training, experience and

licensure for a specific treatment, accommodation, product or

service in the geographic area where the treatment,

accommodation, product or service is provided. Beginning January

1, 2017, insurers, employers and their agents shall accept

electronically all submitted bills from a provider for services

rendered by a provider under this subparagraph and subparagraph

(ii) and shall implement standard electronic transactions to

accept electronic bills consistent with regulations relating to

HIPAA transactions and code sets promulgated by the United

States Department of Health and Human Services pursuant to 45

CFR Pt. 162 (relating to administrative requirements), and shall

accept such bills either directly or through the use of a

clearinghouse pursuant to 45 CFR § 162.930 (relating to

additional rules for health care clearinghouses). An insurer or

employer shall include with each payment made to a provider for

services rendered under this act a detailed written explanation

of the benefits paid, delineating the patient name, date of

service, codes submitted by the provider and the amount of

reimbursement applicable to each code for service submitted.

(ii) Commencing on January 1, 1995, the maximum allowance

for a health care service covered by subparagraph (i) shall be

updated as of the first day of January of each year. The update,

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which shall be applied to all services performed after January 1

of each year, shall be equal to the percentage change in the

Statewide average weekly wage. Such updates shall be cumulative.

An insurer or employer who fails to implement the reimbursement

update required by this subparagraph by January 2 of each year

shall be required to reimburse providers the full amount of the

updated fee allowance, interest at the rate of twenty-five per

centum per annum, costs, attorney fees, if the insurer or

employer's position is determined to be unreasonable at the

discretion of the finder of fact, and a penalty of fifty per

centum of the amount due and owing. A provider shall not be

required to file a fee review petition to be entitled to these

payment amounts. A provider shall have the right to enforce this

subparagraph through a petition filed with a workers'

compensation judge pursuant to paragraph (12).

* * *

(5) The employer or insurer shall make payment and providers

shall submit bills and records in accordance with the provisions

of this section. All payments to providers for treatment

provided pursuant to this act shall be made within thirty (30)

days of receipt of such bills and records unless the employer or

insurer disputes the reasonableness or necessity of the

treatment provided pursuant to paragraph (6). The nonpayment to

providers within thirty (30) days for treatment for which a bill

and records have been submitted shall only apply to that

particular treatment or portion thereof in dispute; payment must

be made timely for any treatment or portion thereof not in

dispute. A provider who has submitted the reports and bills

required by this section and who disputes the amount or

timeliness of the payment from the employer or insurer shall

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file an application for fee review with the department no more

than thirty (30) days following notification of a disputed

treatment or ninety (90) days following the original billing

date of treatment. If the insurer disputes the reasonableness

and necessity of the treatment pursuant to paragraph (6), the

period for filing an application for fee review shall be tolled

as long as the insurer has the right to suspend payment to the

provider pursuant to the provisions of this paragraph. Within

thirty (30) days of the filing of such an application, the

department shall render an administrative decision. If the

administrative decision of the department upholds, in whole or

in part, the provider's application for fee review, the

department shall award the amount of the unpaid claims, interest

at the rate of twenty-five per centum per annum to the provider,

costs, and attorney fees, if the insurer or employers' position

is determined to be unreasonable at the discretion of the finder

of fact, and a penalty of fifty per centum of the amount due and

owing. The department shall include an award of attorney fees

and interest in the administrative decision and shall authorize

a provider to submit a petition for attorney fees concurrent

with the filing of any document in support of the fee

petition. An administrative decision rendered by the department

in favor of the provider's fee review petition, in whole or in

part, shall be paid in full by the insurer within thirty (30)

days from the date of the department's administrative decision.

Failure to comply with this paragraph by an insurer, absent the

timely filing of an appeal to Commonwealth Court pursuant to 2

Pa.C.S. (relating to administrative law and procedure), shall

create a right inuring to the benefit of the provider to obtain

payment in full consistent with the department's administrative

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decision through a petition filed with a workers' compensation

judge pursuant to paragraph (12).

* * *

(11) It shall be unlawful for any insurer, employer, agent

of an insurer or employer, corporation or person to solicit a

provider to accept discounts or reimbursement below the

allowances provided for in paragraph (3)(i) and (ii) by the use

of any threat or coercion in any verbal or written

communications stating or implying the provider will suffer

negative economic, patient access or reimbursement consequences

if the provider does not agree to participate in any agreement

or network at a discounted reimbursement rate.

(12) The department shall establish a petition for alleging

violations of paragraphs (1)(iii), (3)(ii) and (5) and section

406.1 to ensure violations of the standards set forth in

paragraphs (1)(iii), (3)(ii) and (5) and section 406.1 are

promptly enforced. A petition filed under this paragraph shall

be assigned to a workers' compensation judge within seven (7)

business days after the filing date. A hearing shall be

conducted on such petition within fourteen (14) business days of

its assignment to a workers' compensation judge. Proper notice

shall be given to all parties as to the time and location of

such hearing. A decision on such petition shall be rendered

within twenty-one (21) days, provided that no continuance has

been granted. The workers' compensation judge's decision shall

include findings of fact, the amount of any administrative fines

to be imposed, the amount of unpaid compensation owed or unpaid

medical bills due, attorney fees, if the workers' compensation

judge determines in the judge's discretion that the insurer or

employer's position is unreasonable, interest at the rate of

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twenty-five per centum per annum, costs and a penalty fifty per

centum of the amount due and owing. Insurers and employers may

be penalized the sum of not less than twenty-five dollars ($25)

nor more than one hundred dollars ($100) for each day of

violation. Such administrative penalties shall be paid to the

department. The administrative penalty may be imposed if the

violation was flagrant, there has been history of repeat

violations on the same claim, or where insurers or employers

acted in bad faith. Any administrative penalty imposed under

this paragraph shall not be considered as compensation for the

purpose of any limitation on the total amount of compensation

payable or reimbursement due to a provider which is set forth in

this act. This paragraph shall not apply to violations that

occur beyond the control of insurers or employers.

* * *

Section 3. Section 407 of the act, amended March 29, 1972

(P.L.159, No.61), is amended to read:

Section 407. On or after the seventh day after any injury

shall have occurred, the employer or insurer and employe or his

dependents may agree upon the compensation payable to the

employe or his dependents under this act; but any agreement made

prior to the seventh day after the injury shall have occurred,

or permitting a commutation of payments contrary to the

provisions of this act, or varying the amount to be paid or the

period during which compensation shall be payable as provided in

this act, shall be wholly null and void. It shall be unlawful

for any employer to accept a receipt showing the payment of

compensation when in fact no such payment has been made.

Where payment of compensation is commenced without an

agreement, the employer or insurer shall simultaneously give

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notice of compensation payable to the employe or his dependent,

and the employe's treating physician or provider, on a form

prescribed by the department, identifying such payments as

compensation under this act and shall forthwith furnish a copy

or copies to the department as required by rules and

regulations. The employe's treating physician or provider shall

have the right to electronically access the notice of

compensation payable retained by the department applicable to

the treating physician or provider's treatment or services

rendered to the employe. Within thirty (30) days of the

effective date of the amendment of this section, the department

shall develop and implement a procedure to allow the employe's

treating physician or provider electronic access to the notice

of compensation payable consistent with prevailing security

standards. It shall be the duty of the department to examine the

notice to determine whether it conforms to the provisions of

this act and rules and regulations hereunder.

All agreements made in accordance with the provisions of this

section shall be on a form prescribed by the department, signed

by all parties in interest, and a copy or copies thereof

forwarded to the department as required by rules and

regulations. It shall be the duty of the department to examine

the agreement to determine whether it conforms to the provisions

of this act and rules and regulations hereunder.

All notices of compensation payable and agreements for

compensation and all supplemental agreements for the

modification, suspension, reinstatement, or termination thereof,

and all receipts executed by any injured employe of whatever

age, or by any dependent to whom compensation is payable under

section three hundred and seven, and who has attained the age of

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sixteen years, shall be valid and binding unless modified or set

aside as hereinafter provided.

Section 4. Section 438 of the act, amended July 2, 1993

(P.L.190, No.44), is amended to read:

Section 438. (a) An employer shall report all injuries

received by employes in the course of or resulting from their

employment immediately to the employer's insurer. If the

employer is self-insured such injuries shall be reported to the

person responsible for management of the employer's compensation

program.

(b) An employer shall report such injuries to the Department

of Labor and Industry by filing directly with the department on

the form it prescribes a report of injury within forty-eight

hours for every injury resulting in death, and mailing within

seven days after the date of injury for all other injuries

except those resulting in disability continuing less than the

day, shift, or turn in which the injury was received. A copy of

this report to the department shall be mailed to the employer's

insurer and the employe's treating physician or provider

forthwith. The employe's treating physician or provider shall

have the right to electronically access injury reports retained

by the department applicable to the treating physician or

provider's treatment or services rendered to the employe. Within

thirty (30) days of the effective date of the amendment of this

section, the department shall develop and implement a procedure

to allow the employe's treating physician or provider electronic

access to the injury reports consistent with prevailing security

standards.

section shall not be evidence against the employer or the

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employer's insurer in any proceeding either under this act or

otherwise. Such reports may be made available by the department

to other State or Federal agencies for study or informational

purposes.

Section 5. This act shall take effect in 30 days.

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