PRINTER'S NO. 1643
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1158
Session of
2015
INTRODUCED BY SCHWANK, COSTA, SABATINA, FONTANA, YUDICHAK,
TARTAGLIONE, BLAKE, FARNESE, HAYWOOD AND WILLIAMS,
MARCH 22, 2016
REFERRED TO BANKING AND INSURANCE, MARCH 22, 2016
AN ACT
Prohibiting emergency medical and health care services surprise
billing.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Emergency
Medical and Health Care Services Surprise Billing Prevention
Act.
Section 2. Definitions.
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:
"Carrier." An entity licensed by the department to issue a
health insurance policy that is offered or governed under any of
the following:
(1) The Insurance Company Law of 1921.
(2) The act of December 29, 1972 (P.L.1701, No.364),
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known as the Health Maintenance Organization Act.
(3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations) or 63 (relating to professional health services
plan corporations).
"Department." The Insurance Department of this Commonwealth.
"Emergency." The term as defined in 35 Pa.C.S. Ch. 81
(relating to emergency medical services system). ????
"Emergency services." A health care service provided to a
patient after the onset of an emergency. The term includes:
(1) "Emergency services" as defined in section 2102 of
the Insurance Company Law of 1921.
(2) A health care service that a health care provider
determines is necessary to evaluate and, if necessary,
stabilize the condition of the patient such that the patient
may be transported without suffering detrimental consequences
or aggravating the patient's condition.
"Health care plan." A package of coverage benefits with a
particular cost-sharing structure, provider network and service
area that is purchased through a health insurance policy.
"Health insurance policy." A health, sickness or accident
policy or subscriber contract or certificate issued by a carrier
that provides medical or health care coverage by a health care
facility or licensed health care provider. The term shall not
include any of the following:
(1) An accident only policy.
(2) A credit only policy.
(3) A long-term care or disability income policy.
(4) A specified disease policy.
(5) A Medicare supplement policy.
(6) A TRICARE policy, including a Civilian Health and
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Medical Program of the Uniformed Services (CHAMPUS)
supplement policy.
(7) A fixed indemnity policy.
(8) A dental only policy.
(9) A vision only policy.
(10) A workers' compensation policy.
(11) An automobile medical payment policy under 75
Pa.C.S. (relating to vehicles).
(12) Any other similar policies providing for limited
benefits.
"In-network." Having a contract with a carrier of a health
care plan to provide health care services to an insured
individual.
"Insurance Company Law of 1921." The act of May 17, 1921
(P.L.682, No.284), known as The Insurance Company Law of 1921.
"Insured individual." A patient covered under a health
insurance policy.
"Out-of-network." Not having a contract with a carrier of a
health care plan to provide health care services to an insured
individual.
"Patient." An individual who receives health care services,
including emergency services.
"Provider." An individual who is authorized to practice some
component of the healing arts by a license, permit, certificate
or registration issued by a Commonwealth licensing agency or
board. The term includes:
(1) A health service doctor as defined in 40 Pa.C.S. §
6302 (relating to definitions).
(2) An individual accredited or certified to provide
behavioral health services.
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(3) A practice group.
"Resolution organization." A qualified independent third-
party claim dispute resolution entity selected by and contracted
with the department.
"Surprise bill." A bill for health care services, other than
emergency services, received by any of the following:
(1) An insured individual for services rendered by an
out-of-network provider at an in-network hospital or
ambulatory surgical center, if an in-network provider is
unavailable, an out-of-network provider renders services
without the insured individual's knowledge or unforeseen
medical services arise at the time the health care services
are rendered. The term shall not include a bill received for
health care services if an in-network provider is available
and the insured individual has elected to obtain services
from an out-of-network provider.
(2) An insured individual for services rendered by an
out-of-network provider, if the services were referred by an
in-network provider to an out-of-network provider without
explicit written consent of the insured individual
acknowledging that the in-network provider is referring the
insured individual to an out-of-network provider and that the
referral may result in costs not covered by the health
insurance policy.
"Usual and customary cost." The 80th percentile of all
charges for the particular health care service performed by a
provider in the same or similar specialty and provided in the
same geographical area as reported in a benchmarking database
maintained by a nonprofit organization which is specified by the
department and is not affiliated with another entity subject to
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this act.
Section 3. Applicability.
(a) Surprise bill.--Except as provided under subsection (b),
this act shall apply to the determination of and dispute
resolution process for bills for emergency service and surprise
bills.
(b) Exemption.--This act shall not apply to health care
services, including emergency services, if provider fees are
subject to schedules or other monetary limitations under any
other law.
Section 4. Hold harmless and assignment of benefits.
If an insured individual assigns benefits for a surprise bill
in writing to an out-of-network provider that knows the insured
individual is an insured individual under a health care plan,
the out-of-network provider may not bill the insured individual
except for an applicable copayment, coinsurance or deductible
that would be owed if the insured individual utilized an in-
network provider.
Section 5. Dispute resolution process.
(a) Establishment.--The department shall establish a dispute
resolution process by which a dispute for a bill for emergency
services or a surprise bill may be resolved.
(b) Selection and certification.--The department shall
promulgate regulations establishing standards for the dispute
resolution process, including a process for certifying and
selecting resolution organizations.
(c) Revocation.--The department may grant and revoke
certifications of resolution organizations to conduct the
dispute resolution process.
Section 6. Reasonable fees.
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In determining the appropriate amount to pay for a health
care service, a resolution organization must consider all
relevant factors, including:
(1) If there is a gross disparity between the fee
charged by the provider for services rendered as compared to:
(i) Fees paid to the involved provider for the same
services rendered by the provider to other patients in
health care plans in which the provider is out of
network.
(ii) In the case of a dispute involving a health
care plan, fees paid by the health care plan to reimburse
similarly qualified providers for the same services in
the same region who are out of network with the health
care plan.
(2) The level of training, education and experience of
the provider.
(3) The provider's usual charge for comparable services
with regard to patients in health care plans in which the
provider is not in network.
(4) The circumstances and complexity of the particular
case, including time and place of the service.
(5) The individual patient's characteristics.
(6) The usual and customary cost of the service.
Section 7. Dispute resolution for emergency services.
(a) Insured individual.--
(1) If a carrier receives a bill for emergency services
from an out of network provider, the carrier must:
(i) Pay an amount that the carrier determines is
reasonable for the emergency services rendered by the
out-of-network provider in accordance with section 2116
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of The Insurance Company Law of 1921, except for the
insured individual's copayment, coinsurance or
deductible.
(ii) Ensure that the insured individual will incur
no greater out-of-pocket costs for the emergency services
than the insured individual would have incurred with an
in-network provider under the Insurance Company Law of
1921.
(2) An out-of-network provider or a carrier may submit a
dispute regarding a fee or payment for emergency services for
review to a resolution organization.
(3) A resolution organization must make a determination
within 30 days of receipt of the dispute for review.
(4) In determining a reasonable fee for the services
rendered, a resolution organization must select either the
carrier's payment or the out-of-network provider's fee. The
resolution organization must determine which amount to select
based upon the conditions and factors under section 6. If a
resolution organization determines, based on the carrier's
payment and the out-of-network provider's fee, that a
settlement between the carrier and out-of-network provider is
reasonably likely or that both the carrier's payment and the
out-of-network provider's fee represent unreasonable
extremes, the resolution organization may direct both parties
to attempt a good faith negotiation for settlement. The
carrier and out-of-network provider may be granted up to 10
business days for the negotiation, which shall run
concurrently with the 30-day period for dispute resolution.
(b) Noninsured individual.--
(1) A patient who is not an insured individual or the
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patient's provider may submit a dispute regarding a fee for
emergency services for review to a resolution organization
upon approval of the department.
(2) A resolution organization must determine a
reasonable fee for the services based upon the same
conditions and factors under section 6.
(3) A patient who is not an insured individual may not
be required to pay the provider's fee in order to be eligible
to submit the dispute for review to a resolution
organization.
(c) Determination.--A determination of a resolution
organization shall be binding on the carrier, provider and
patient and admissible in a court proceeding between the
carrier, provider or patient or in any administrative proceeding
between the Commonwealth and the provider.
Section 8. Dispute resolution for surprise bills.
(a) Assigned benefits.--The following shall apply to a
surprise bill received by an insured individual who assigns
benefits:
(1) If an insured individual assigns benefits to an out-
of-network provider, the carrier must pay the out-of-network
provider in accordance with paragraphs (2) and (3).
(2) The out-of-network provider may bill the carrier for
the health care services rendered and the carrier must pay
the out-of-network provider the billed amount or attempt to
negotiate reimbursement with the out-of-network provider.
(3) If the carrier's attempts to negotiate reimbursement
for health care services provided by an out-of-network
provider does not result in a resolution of the payment
dispute between the out-of-network provider and the carrier,
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the carrier must pay the out-of-network provider an amount
the carrier determines is reasonable for the health care
services rendered, except for the insured individual's
copayment, coinsurance or deductible, in accordance with the
Insurance Company Law of 1921.
(4) Either the carrier or the out-of-network provider
may submit the dispute regarding the surprise bill for review
to a resolution organization, except that the carrier may not
submit the dispute unless the carrier has complied with the
requirements of paragraphs (1), (2) and (3).
(5) The resolution organization must make a
determination within 30 days of receipt of the dispute for
review.
(6) If determining a reasonable fee for the services
rendered, the resolution organization shall select either the
carrier's payment or the out-of-network provider's fee. A
resolution organization must determine which amount to select
based upon the conditions and factors under section 6. If a
resolution organization determines, based on the carrier's
payment and the out-of-network provider's fee, that a
settlement between the carrier and out-of-network provider is
reasonably likely or that both the carrier's payment and the
out-of-network provider's fee represent unreasonable
extremes, the resolution organization may direct both parties
to attempt a good faith negotiation for settlement. The
carrier and out-of-network provider may be granted up to 10
business days for the negotiation, which shall run
concurrently with the 30-day period for dispute resolution.
(b) Nonassigned benefits or noninsured individual.--
(1) An insured individual who does not assign benefits
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in accordance with subsection (a) or a patient who is not an
insured individual and who receives a surprise bill may
submit a dispute regarding the surprise bill for review to a
resolution organization.
(2) The resolution organization must determine a
reasonable fee for the services rendered based upon the
conditions and factors under section 6.
(3) A patient or insured individual who does not assign
benefits in accordance with subsection (a) may not be
required to pay the provider's fee to be eligible to submit
the dispute for review to the resolution organization.
(c) Determination.--The determination of a resolution
organization shall be binding on the patient or insured
individual, provider and carrier and admissible in a court
proceeding between the patient or insured individual, provider
or carrier or in an administrative proceeding between the
Commonwealth and the provider.
Section 9. Payment for resolution organization.
(a) Insured individual.--For disputes involving an insured
individual one of the following shall apply:
(1) If the resolution organization determines the
carrier's payment is reasonable, payment for the dispute
resolution process shall be the responsibility of the out-of-
network provider.
(2) If the resolution organization determines the out-
of-network provider's fee is reasonable, payment for the
dispute resolution process shall be the responsibility of the
carrier.
(3) If a good faith negotiation directed by the
resolution organization under section 7(a)(4) or section 8(a)
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(6) results in a settlement between the carrier and out-of-
network provider, the carrier and the out-of-network provider
must evenly divide and share the prorated cost for dispute
resolution.
(b) Noninsured individual.--For disputes involving a patient
who is not an insured individual one of the following shall
apply:
(1) If the resolution organization determines the
provider's fee is reasonable, payment for the dispute
resolution process shall be the responsibility of the patient
unless payment for the dispute resolution process would pose
a hardship to the patient. The department shall promulgate a
regulation to determine payment for the dispute resolution
process in cases of hardship.
(2) If the resolution organization determines the
provider's fee is unreasonable, payment for the dispute
resolution process shall be the responsibility of the
provider.
Section 10. Effective date.
This act shall take effect in 60 days.
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