PRINTER'S NO. 1523
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1178
Session of
2015
INTRODUCED BY BARRAR, COHEN, D. COSTA, KAUFFMAN, MILLARD, MURT,
READSHAW, ROZZI, SAYLOR, TRUITT AND ZIMMERMAN, MAY 11, 2015
REFERRED TO COMMITTEE ON INSURANCE, MAY 11, 2015
AN ACT
Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
act relating to insurance; amending, revising, and
consolidating the law providing for the incorporation of
insurance companies, and the regulation, supervision, and
protection of home and foreign insurance companies, Lloyds
associations, reciprocal and inter-insurance exchanges, and
fire insurance rating bureaus, and the regulation and
supervision of insurance carried by such companies,
associations, and exchanges, including insurance carried by
the State Workmen's Insurance Fund; providing penalties; and
repealing existing laws," providing for retroactive denial of
reimbursement of payments to health care providers by
insurers.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of May 17, 1921 (P.L.682, No.284), known
as The Insurance Company Law of 1921, is amended by adding an
article to read:
ARTICLE VI-C
RETROACTIVE DENIAL OF REIMBURSEMENTS
Section 601-C. Scope of article.
This article shall not apply to reimbursements made as part
of an annual contracted reconciliation of a risk-sharing
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
arrangement under an administrative service provider contract.
Section 602-C. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
" Code. " Any of the following codes:
(1) The applicable Current Procedural Terminology (CPT)
code, as adopted by the American Medical Association.
(2) If for dental service, the applicable code adopted
by the American Dental Association.
(3) Another applicable code under an appropriate uniform
coding scheme used by an insurer in accordance with this
article.
" Coding guidelines. " Those standards or procedures used or
applied by a payor to determine the most accurate and
appropriate code or codes for payment by the payor for a service
or services.
" Fraud. " The intentional misrepresentation or concealment of
information in order to deceive or mislead.
" Health care provider. " A person, corporation, facility,
institution or other entity licensed, certified or approved by
the Commonwealth to provide health care or professional medical
services. The term includes, but is not limited to, a physician,
chiropractor, optometrist, professional nurse, certified nurse-
midwife, podiatrist, hospital, nursing home, ambulatory surgical
center or birth center.
" Insurer. " An entity subject to any of the following:
(1) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations) or 63 (relating to professional health services
plan corporations).
20150HB1178PN1523 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) This act.
(3) The act of December 29, 1972 (P.L.1701, No.364) ,
known as the Health Maintenance Organization Act.
" Medical assistance program. " The program established under
the act of June 13, 1967 (P.L.31, No.21) , known as the Public
Welfare Code.
" Medicare. " The Federal program established under Title
XVIII of the Social Security Act ( 49 Stat. 620, 42 U.S.C. ยง 301
et seq. or 1395 et seq.).
" Reimbursement. " Payments made to a health care provider by
an insurer on either a fee-for-service, capitated or premium
basis.
Section 603-C. Retroactive denial of reimbursement.
(a) General rule.--If an insurer retroactively denies
reimbursement to a health care provider, the insurer may only:
(1) retroactively deny reimbursement for services
subject to coordination of benefits with another insurer, the
medical assistance program or the Medicare program during the
12-month period after the date that the insurer paid the
health care provider; and
(2) except as provided in paragraph (1), retroactively
deny reimbursement during a 12-month period after the date
that the insurer paid the health care provider.
(b) Written notice.--An insurer that retroactively denies
reimbursement to a health care provider under subsection (a)
shall provide the health care provider with a written statement
specifying the basis for the retroactive denial. If the
retroactive denial of reimbursement results from coordination of
benefits, the written statement shall provide the name and
address of the entity acknowledging responsibility for payment
20150HB1178PN1523 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
of the denied claim.
Section 604-C. Effect of noncompliance.
Except as provided in section 605-C, an insurer that does not
comply with the provisions of section 603-C may not
retroactively deny reimbursement or attempt in any manner to
retroactively collect reimbursement already paid to a health
care provider.
Section 605-C. Fraudulent or improperly coded information.
(a) Reasons for denial.--The provisions of section 603-C do
not apply if an insurer retroactively denies reimbursement to a
health care provider because:
(1) the information submitted to the insurer was
fraudulent;
(2) the information submitted to the insurer was
improperly coded and the insurer has provided to the health
care provider sufficient information regarding the coding
guidelines used by the insurer at least 30 days prior to the
date the services subject to the retroactive denial were
rendered; or
(3) the claim submitted to the insurer was a duplicate
claim.
(b) Improper coding.--Information submitted to the insurer
may be considered to be improperly coded under subsection (a)(2)
if the information submitted to the insurer by the health care
provider:
(1) uses codes that do not conform with the coding
guidelines used by the carrier applicable as of the date the
service or services were rendered; or
(2) does not otherwise conform with the contractual
obligations of the health care provider to the insurer
20150HB1178PN1523 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
applicable as of the date the service or services were
rendered.
Section 606-C. Coordination of benefits.
If an insurer retroactively denies reimbursement for services
as a result of coordination of benefits under provisions of
section 605-C(a), the health care provider shall have six months
from the date of the denial, unless an insurer permits a longer
time period, to submit a claim for reimbursement for the service
to the insurer, the medical assistance program or Medicare
program responsible for payment.
Section 2. This act shall take effect in 60 days.
20150HB1178PN1523 - 5 -
1
2
3
4
5
6
7
8
9
10
11