Regular Session 2017-2018 House Bill 1553 P.N. 2803

PRIOR PRINTER'S NO. 2033

PRINTER'S NO. 2803

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1553

Session of

2017

INTRODUCED BY BAKER, PICKETT, FRANKEL, DIAMOND, CALTAGIRONE,

V. BROWN, IRVIN, JAMES, MILLARD, DeLUCA, DRISCOLL,

SCHLOSSBERG, KAUFER, KINSEY, D. COSTA, M. QUINN, SIMMONS,

FABRIZIO, WARREN, WARD, PASHINSKI, ROAE, ENGLISH, EVERETT,

RADER, BIZZARRO, GABLER, WHEELAND, ZIMMERMAN, CORR, MARSHALL

AND WATSON, JUNE 16, 2017

AS REPORTED FROM COMMITTEE ON HEALTH, HOUSE OF REPRESENTATIVES,

AS AMENDED, DECEMBER 11, 2017

AN ACT

Providing for the protection of consumers of health care

coverage against surprise balance bills for emergency health

care services or for other covered health care services when

health care services are sought from in-network facilities

PROVIDERS.

TABLE OF CONTENTS

Chapter 1. Preliminary Provisions

Section 101. Short title.

Section 102. Definitions.

Chapter 3. Balance Billing and Payment

Section 301. Duty of facilities to provide written disclosure.

Section 302. Surprise balance bills.

Section 303. Direct dispute resolution.

Section 304. Independent dispute resolution.

Section 305. Applicability.

Chapter 5. Insurers COMMUNICATIONS, RECORDS AND ENFORCEMENT

Section 501. Communications to consumers.

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Section 502. Records and confidentiality.

Section 503. Enforcement.

Section 504. Private cause of action.

Chapter 7. Miscellaneous Provisions

Section 701. Regulations.

Section 702. Effective date.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

PRELIMINARY PROVISIONS

Section 101. Short title.

This act shall be known and may be cited as the Surprise

Balance Bill Protection Act.

Section 102. 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:

"Balance bill." A bill for a covered service provided to an

insured who has coverage through a health care plan in order to

collect the difference between an out-of-network provider's fee

for a covered service received by the insured from the out-of-

network provider and the reimbursement received by the out-of-

network provider from the insured's health care plan.

"Commissioner." The Insurance Commissioner of the

Commonwealth.

"Confidential information." Nonpublic personal health

information, trade secret or confidential proprietary

information which is produced by, obtained by or disclosed to

the department, the Department of Health, the Department of

State, the Office of Attorney General, a resolution organization

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assigned to a dispute under Chapter 3 or any other person in the

course of a dispute resolution under this act.

"Confidential proprietary information." Commercial or

financial information that:

(1) is privileged or confidential; and

(2) if disclosed, would cause substantial harm to the

competitive position of the person that submitted the

information.

"Cost-sharing." A copayment, coinsurance, deductible or

similar charge. The term does not include premiums, balance

billing amounts or the cost of noncovered services.

"Covered service." A health care service reimbursable by an

insurer under a health care plan.

"Department." The Insurance Department of the Commonwealth.

"Emergency medical services agency" or "EMS agency." As

defined in 35 Pa.C.S. § 8103 (relating to definitions).

"Emergency service." A health care service provided to an

insured after the sudden onset of a medical condition that

manifests itself by acute symptoms of sufficient severity or

severe pain such that a prudent layperson who possesses an

average knowledge of health and medicine could reasonably expect

the absence of immediate medical attention to result in

detrimental consequences to the health of the insured or, in the

case of a pregnant woman, the health of the insured or her

unborn child. The term includes the following:

(1) Emergency medical services as defined in 35 Pa.C.S.

§ 8103.

(2) A health care service that a provider determines is

necessary to evaluate and, if necessary, stabilize the

condition of the insured so that the insured may be

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transported without suffering detrimental consequences or

aggravating the insured's condition.

(3) If the insured is admitted into a facility, a health

care service rendered prior to transfer or discharge.

"Facility." A facility providing a health care service,

including any of the following:

(1) A general, special, psychiatric or rehabilitation

hospital.

(2) An ambulatory surgical facility.

(3) A cancer treatment center.

(4) A birth center.

(5) An inpatient, outpatient or residential drug and

alcohol treatment facility.

(6) A laboratory, diagnostic or other outpatient medical

service or testing facility.

(7) A physician's office or clinic.

"Health care plan." A package of coverage benefits with a

particular cost-sharing structure, network and service area that

is purchased through a health insurance policy.

"Health care practitioner." 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 all of the

following:

(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.

(3) A practice group.

(4) A licensed individual who provides health care

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services to patients of a facility under clinical privileges

granted by the facility.

(5) A licensed individual who provides health care

services to patients in, or in conjunction with, services

provided to patients in a facility.

"Health care service." As follows:

(1) All of the following categories of services:

(i) A covered treatment.

(ii) An admission.

(iii) A procedure.

(iv) Medical supplies and equipment.

(v) Other services prescribed or otherwise provided

or proposed to be provided by a provider to an insured

under a health care plan.

(2) All of the following types of services:

(i) An emergency service.

(ii) A behavioral health care service.

(iii) A health care service provided in conjunction

with any other health care service sought by an insured

in or from a provider, including, but not limited to,

radiology, pathology, anesthesiology, neonatology,

hospital HOSPITALIST services and diagnostic

interpretation.

"Health information." Information or data, whether oral or

recorded in any form or medium, created by or derived from a

provider or an insured that relates to any of the following:

(1) The PAST, PRESENT OR FUTURE physical, mental or

behavioral health or condition of an individual.

(2) The provision of a health care service to an

individual.

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(3) Payment for the provision of a health care service

to an individual.

"Health insurance policy." A policy, subscriber contract,

certificate or plan issued by an insurer that provides medical

or health care coverage. The term does 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 fixed indemnity policy.

(7) A dental only policy.

(8) A vision only policy.

(9) A workers' compensation policy.

(10) An automobile medical payment policy.

(11) A POLICY UNDER WHICH BENEFITS ARE PROVIDED BY THE

FEDERAL GOVERNMENT TO ACTIVE OR FORMER MILITARY PERSONNEL AND

THEIR DEPENDENTS.

(11) (12) Any other similar policies providing for

limited benefits.

"In-network provider." A provider who contracts with an

insurer to provide health care services to an insured under a

health care plan.

"Insurance fraud." An offense under 18 Pa.C.S. § 4117

(relating to insurance fraud).

"Insured." A person on whose behalf an insurer is obligated

to pay covered health care expense benefits or provide health

care services under a health care plan. The term includes a

policyholder, certificate holder, subscriber, member, dependent

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or other individual who is eligible to receive health care

services through a health care plan. NOTHING IN THIS DEFINITION

SHALL BE CONSTRUED TO PROHIBIT AN AUTHORIZED REPRESENTATIVE FROM

ACTING ON BEHALF OF AN INSURED.

"Insurer." An entity licensed by the department with the

ACCIDENT AND HEALTH authority to issue a policy, subscriber

contract, certificate or plan that provides medical or health

care coverage and is offered or governed under any of the

following:

(1) The act of May 17, 1921 (P.L.682, No.284), known as

The Insurance Company Law of 1921., INCLUDING SECTION 630 AND

ARTICLE XXIV OF THE INSURANCE COMPANY LAW OF 1921.

(2) The act of December 29, 1972 (P.L.1701, No.364),

known as the Health Maintenance Organization Act.

(3) The provisions of 40 Pa.C.S. Ch. 61 (relating to

hospital plan corporations) or 63 (relating to professional

health services plan corporations).

"Network." The health care providers designated by an

insurer to provide health care services to insureds in a health

care plan.

"Nonpublic personal health information." Health information

that:

(1) identifies an individual who is the subject of the

information; or

(2) can provide a reasonable basis AN INDIVIDUAL WOULD

REASONABLY BELIEVE COULD BE USED to identify an individual.

"Out-of-network provider." A provider who does not contract

with an insurer to provide health care services to an insured

under the insured's health care plan.

"Practice group." Any of the following:

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(1) Two or more health care practitioners legally

organized in an entity recognized by the Commonwealth,

including a partnership, professional corporation, limited

liability company formed to render health care services,

medical foundation, not-for-profit corporation, faculty

practice plan or other similar entity, if any of the

following are satisfied:

(i) Each health care practitioner provides a

substantial amount of the same SUBSTANTIALLY THE FULL

range of services that each health care practitioner

routinely provides, including, but not limited to,

medical care, consultation, diagnosis or treatment,

through the joint use of shared office space, facilities,

equipment or personnel.

(ii) The entity provides a substantial amount of its

HEALTH CARE PRACTITIONERS PROVIDE A SUBSTANTIAL AMOUNT OF

THEIR services through the entity, services are billed in

the name of the entity and payments are treated as

receipts to OF the entity.

(iii) The entity's overhead expenses and the

ENTITY'S income are assessed or distributed in accordance

with methods previously determined by members of the

entity.

(2) An entity in which the entity's shareholders,

partners or owners include single-practitioner professional

corporations, limited liability companies formed to render

professional services or other entities in which beneficial

owners are individual health care practitioners.

"Provider." A facility, health care practitioner,

institution or organization, whether for profit or nonprofit,

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which has the primary purpose of providing health care services

and is licensed or otherwise authorized to practice in this

Commonwealth.

"Record custodian." The department, the Department of

Health, the Department of State, a resolution organization

assigned to a dispute under section 304 or a person who

possesses or controls confidential information.

"Resolution organization." A qualified independent third-

party claim dispute resolution entity selected by and contracted

with the department.

"Service area." The geographic area where a health care plan

is offered.

"Surprise balance bill." A balance bill for any of the

following:

(1) A covered emergency service provided to an insured

by an out-of-network provider, not including a bill for an

emergency medical service for which an emergency medical

services agency may register with the Department of Health

for direct reimbursement under section 635.7 of The Insurance

Company Law of 1921.

(2) A covered service provided to an insured by an out-

of-network provider at an in-network facility in

circumstances when the insured did not know the provider was

out-of-network or did not choose to receive the service from

the out-of-network provider by having requested to receive

the service from an in-network provider.

(3) A covered service provided to an insured by an out-

of-network provider, in conjunction with a health care

service for which the insured presented for care to an in-

network provider, in circumstances when the insured did not

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know the provider was out-of-network or did not choose to

receive the service from the out-of-network provider by

having requested to receive the service from an in-network

provider.

"SURPRISE BALANCE BILL." AS FOLLOWS:

(1) A BALANCE BILL FOR ANY OF THE FOLLOWING:

(I) A COVERED EMERGENCY SERVICE PROVIDED TO AN

INSURED BY AN OUT-OF-NETWORK PROVIDER, NOT INCLUDING A

BILL FOR AN EMERGENCY MEDICAL SERVICE FOR WHICH AN

EMERGENCY MEDICAL SERVICES AGENCY HAS REGISTERED WITH THE

DEPARTMENT OF HEALTH FOR DIRECT REIMBURSEMENT UNDER

SECTION 635.7 OF THE INSURANCE COMPANY LAW OF 1921.

(II) A COVERED SERVICE PROVIDED TO AN INSURED BY AN

OUT-OF-NETWORK PROVIDER AT AN IN-NETWORK FACILITY WHEN

THE INSURED DID NOT KNOW THE PROVIDER WAS OUT-OF-NETWORK

OR DID NOT CHOOSE TO RECEIVE THE SERVICE FROM THE OUT-OF-

NETWORK PROVIDER.

(III) A COVERED SERVICE PROVIDED TO AN INSURED BY AN

OUT-OF-NETWORK PROVIDER, IN CONJUNCTION WITH A HEALTH

CARE SERVICE FOR WHICH THE INSURED PRESENTED FOR CARE TO

AN IN-NETWORK PROVIDER, WHEN THE INSURED DID NOT KNOW THE

PROVIDER WAS OUT-OF-NETWORK OR DID NOT CHOOSE TO RECEIVE

THE SERVICE FROM THE OUT-OF-NETWORK PROVIDER.

(IV) A COVERED SERVICE PROVIDED TO AN INSURED BY AN

OUT-OF-NETWORK PROVIDER AT AN IN-NETWORK FACILITY WHEN

THE INSURED DID NOT HAVE THE ABILITY TO MAKE AN INFORMED

CHOICE OF THE PROVIDER OF THE HEALTH CARE SERVICE.

(2) THE TERM DOES NOT INCLUDE ANY OF THE FOLLOWING:

(I) A BALANCE BILL FOR A HEALTH CARE SERVICE

RENDERED BY AN OUT-OF-NETWORK PROVIDER WHEN AN IN-NETWORK

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PROVIDER IS AVAILABLE AND THE INSURED HAS ELECTED TO

RECEIVE THE SERVICE FROM AN OUT-OF-NETWORK PROVIDER

RATHER THAN AN IN-NETWORK PROVIDER.

(II) A HEALTH CARE SERVICE FOR WHICH AN ENTITY,

OTHER THAN AN INSURER UNDER A HEALTH INSURANCE POLICY, IS

RESPONSIBLE.

(3) NOTHING IN THIS DEFINITION SHALL BE CONSTRUED TO

PROHIBIT AN INSURER FROM APPROPRIATELY UTILIZING REASONABLE

MEDICAL MANAGEMENT TECHNIQUES.

"Trade secret." Information that:

(1) derives independent economic value, actual or

potential, from not being generally known to and not being

readily ascertainable by proper means by other persons who

can obtain economic value from disclosure or use of the

information; and

(2) is the subject of efforts that are reasonable under

the circumstances to maintain the secrecy of the information.

"USUAL, CUSTOMARY AND REASONABLE RATE." THE SEVENTY-FIFTH

PERCENTILE OF ALL CHARGED AMOUNTS FOR A PARTICULAR HEALTH CARE

SERVICE PERFORMED BY A PROVIDER WHICH IS IN THE SAME OR SIMILAR

SPECIALTY AND PROVIDED IN THE SAME GEOGRAPHIC AREA AS REPORTED

IN A BENCHMARKING DATABASE MAINTAINED BY A NONPROFIT

ORGANIZATION DESIGNATED BY THE COMMISSIONER AND NOT AFFILIATED

WITH AN INSURER OR PROVIDER.

CHAPTER 3

BALANCE BILLING AND PAYMENT

Section 301. Duty of facilities to provide written disclosure.

(a) Disclosure.--Whenever an in-network facility schedules a

health care service or seeks prior authorization from an insurer

for the provision of a health care service to an insured that is

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expected to include the provision of a health care service by an

out-of-network provider, but not earlier than 10 business days

prior to admission or date of service AND THERE ARE 10 BUSINESS

DAYS BETWEEN THE DATE WHEN THE HEALTH CARE SERVICE IS SCHEDULED

AND THE DATE WHEN THE HEALTH CARE SERVICE IS SCHEDULED TO BE

PROVIDED, the facility shall provide the insured with an out-of-

network service written disclosure. Nothing in this act shall

prohibit an insurer from appropriately utilizing reasonable

medical management techniques. NOTICE PROVIDED LESS THAN 10

BUSINESS DAYS BEFORE THE DATE WHEN THE HEALTH CARE SERVICE WILL

BE PROVIDED SHALL NOT BE CONSIDERED FAIR NOTICE TO ALLOW THE

INSURED TO MAKE AN INFORMED CHOICE TO RECEIVE A HEALTH CARE

SERVICE FROM AN OUT-OF-NETWORK PROVIDER.

(b) Provisions.--The out-of-network service written

disclosure under subsection (a) shall include the following:

(1) One or more named out-of-network providers that are

expected to be called upon to render a health care service to

the insured during the course of treatment.

(2) The out-of-network providers PROVIDER may not have a

contract with the insurer and is therefore considered to be

out-of-network.

(3) A health care service rendered by the named provider

will be provided on an out-of-network basis.

(4) A description of the range of the charges for the

out-of-network health care service.

(5) The manner in which the insured may obtain from the

insurer an identification of in-network providers who may

render the health care service and on how the insured may

request and receive the health care service from an in-

network provider.

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(6) The insured may rely on the rights and remedies that

may be available under Federal or State law, contact the

insurer for additional assistance or agree to accept and pay

the charges for the health care service by the out-of-network

provider on an out-of-network basis.

Section 302. Surprise balance bills.

(a) Prohibition.--The following apply:

(1) An out-of-network provider which renders a health

care service COVERED BY THIS ACT to an insured may not

surprise balance bill the insured for any amount in excess of

the cost-sharing amounts that would have been imposed if the

health care service had been rendered by an in-network

provider. Upon request, the insurer shall furnish to the out-

of-network provider a statement of the applicable in-network

cost-sharing amounts owed by the insured to the provider. The

insured shall be responsible for no more than the cost-

sharing amounts that would have been due if the service had

been rendered by an in-network provider.

(2) An out-of-network provider may not advance a

surprise balance bill to collections.

(b) Assignment of benefits FORM SUBMISSION.--The following

apply:

(1) An out-of-network provider of a health care service

which does not surprise balance bill an insured shall be

deemed to have received an assignment of benefits from the

insured and any reimbursement paid by the insurer shall be

paid directly to the out-of-network provider.

(2) If an insured receives a surprise balance bill, the

insured may submit to the insurer a surprise balance bill

form as specified under subsection (c) for the purpose of

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declaring the bill to be a surprise balance bill. Submission

of the surprise balance bill form to the insurer by the

insured shall effect an assignment of the insured's benefits

to the out-of-network provider. An insured who submits a

surprise balance bill form to the insurer, except in the case

of insurance fraud, shall be held harmless from all costs

except the in-network cost-sharing amount that would

otherwise have been due.

(1) The department shall specify the content and format

of the surprise balance bill form. A draft of the surprise

balance bill form and any substantive revisions of the draft

shall be published on the department's publicly accessible

Internet website and in the Pennsylvania Bulletin for a 30-

day comment period prior to the final form being

published. The final form and any substantive revisions of

the final form shall be published on the department's

publicly accessible Internet website and in the Pennsylvania

Bulletin. Upon request, the department shall make the

surprise balance bill form available in hard copy. The

surprise balance bill form shall include the following:

(i) A description of a surprise balance bill.

(ii) A description of the assignment of benefits

affected by submission of the surprise balance bill form.

(iii) (II) A description of the hold harmless

protection affected EFFECTED by submission of the

surprise balance bill form.

(iv) (III) An explanation of the purpose of

submitting the surprise balance bill form and the

surprise balance bill to the insurer.

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(v) (IV) An explanation of what constitutes

insurance fraud in the context of submitting the surprise

balance bill form, including the criminal and civil

penalties for insurance fraud under the laws of this

Commonwealth.

(2) An insurer shall make available on the insurer's

publicly accessible Internet website and include in the

insured's health insurance policy form information on how to

access and submit a surprise balance bill form.

(3) When an insured receives a health care service that

may be subject to a surprise balance bill, a provider or

insurer associated with the service shall make a good faith

effort to notify the insured of the protections specified

under this act, including all of the following:

(i) The surprise balance bill form as specified

under this subsection.

(ii) The method to submit the surprise balance bill

to the insurer. This may include referencing the

availability of the surprise balance bill form on a

provider bill, explanation of benefits or the insurer's

Internet website or making the surprise balance bill form

available in hard copy.

(d) Overpayment.--If the insured pays an out-of-network

provider more than the in-network cost-sharing amount, all of

the following apply:

(1) The OUT-OF-NETWORK provider shall refund to the

insured within 30 business days of receipt any amount paid in

excess of the in-network cost-sharing amount.

(2) If an out-of-network provider has not made a full

refund of any amount paid in excess of the in-network cost-

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sharing amount to the insured within 30 business days of

receipt, interest shall accrue at the rate of 10% per annum

beginning with the first calendar day after the 30-business

day period. A violation of this paragraph SECTION shall be a

violation of the act of December 17, 1968 (P.L.1224, No.387),

known as the Unfair Trade Practices and Consumer Protection

Law.

(e) Cost-sharing amount.--An insurer shall count each

payment that an insured makes to satisfy a surprise balance bill

toward an insured's in-network deductible and maximum out-of-

pocket cost-sharing amount.

(f) Applicability.--The following apply:

(1) For a health insurance policy which requires rates

or forms be filed with the Federal Government or the

department, this section shall apply to any policy for which

a form or rate is first permitted to be used within 180 days

of the effective date of this subsection.

(2) For a health insurance policy which does not require

rates or forms to be filed with the Federal Government or the

department, this section shall apply to any policy issued or

renewed on or after 180 days from the effective date of this

subsection.

Section 303. Direct dispute resolution.

(a) Mutual agreement.--The following apply:

(1) Nothing in this section shall prevent an insurer and

an out-of-network provider from mutually agreeing to a

payment amount for a health care service which is different

from the requirements under this section.

(2) Nothing in this section shall prevent an insurer

from addressing the availability and use of in-network

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providers in the insurer's contracts with in-network

facilities and in-network providers who make referrals to

other providers.

(3) NOTHING IN THIS SECTION SHALL SUPERSEDE EXISTING

AGREEMENTS BETWEEN INSURERS AND PROVIDERS IN INSTANCES OF

SURPRISE BALANCE BILLING.

(b) Health care service payments.--If an insurer receives a

(B) HEALTH CARE SERVICE PAYMENTS.--

(1) IF AN INSURER RECEIVES A surprise balance bill form

and bill from an insured, or if an out-of-network provider

submits to an insurer a bill CLAIM for a health care service

covered by this act, the following apply:

(1) The insurer shall pay, in accordance with the prompt

(2) PAYMENT UNDER PARAGRAPH (1) SHALL BE IN ACCORDANCE

WITH THE FOLLOWING:

(I) IF THE CLAIM BY THE OUT-OF-NETWORK PROVIDER IN

EXCESS OF $500, EITHER PARTY MAY INITIATE THE INDEPENDENT

DISPUTE RESOLUTION PROCESS UNDER SECTION 304.

(II) IF THE CLAIM BY THE OUT-OF-NETWORK PROVIDER IS

$500 OR LESS, THE INSURER SHALL REIMBURSE THE OUT-OF-

NETWORK PROVIDER THE GREATER OF:

(A) THE AMOUNT THAT WOULD HAVE BEEN PAID FOR THE

CLAIM UNDER THE INSURED'S HEALTH INSURANCE POLICY HAD

THE SERVICE WHICH IS THE SUBJECT OF THE CLAIM BEEN

RENDERED BY AN IN-NETWORK PROVIDER; OR

(B) THE USUAL, CUSTOMARY AND REASONABLE RATE FOR

THE OUT-OF-NETWORK PROVIDER'S SERVICES.

(III) THE INSURER SHALL PAY, IN ACCORDANCE WITH THE

PROMPT payment requirements under section 2166 of the act

of May 17, 1921 (P.L.682, No.284), known as The Insurance

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Company Law of 1921, the out-of-network amount due under

the health insurance policy or as required by Federal

law.

(2) Payment under paragraph (1) shall be made directly

(IV) PAYMENT UNDER SUBPARAGRAPH (I) SHALL BE MADE

DIRECTLY to the provider in accordance with section

302(b).

(3) The insurer and provider may reach agreement as to

(V) THE INSURER AND OUT-OF-NETWORK PROVIDER MAY

REACH AN AGREEMENT AS TO an additional amount to be paid

for the OUT-OF-NETWORK provider's services, payment of

which, in addition to the applicable in-network cost-

sharing amount owed by the insured, shall constitute

payment in full to the OUT-OF-NETWORK provider for the

health care service rendered.

(4) If the provider and insurer do not reach an

(VI) IF THE OUT-OF-NETWORK PROVIDER AND INSURER DO

NOT REACH AN agreement on a payment amount within 60

calendar days after the insurer receives the bill for the

health care service, the OUT-OF-NETWORK provider or

insurer may submit the dispute for independent dispute

resolution under section 304. The OUT-OF-NETWORK provider

or insurer may aggregate claims from the OUT-OF-NETWORK

provider to the insurer that are submitted for

independent dispute resolution, including TO INCLUDE all

claims pertaining to an insured from a single encounter.

Section 304. Independent dispute resolution.

(a) Arbitration.--The following apply:

(1) An independent dispute resolution process for the

purpose of arbitrating disputes between an insurer and a

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provider for payment for an out-of-network service covered by

this act shall be administered in accordance with this

section. The independent dispute resolution process shall

permit private negotiations. Nothing in this section shall be

construed to preclude an insurer and a provider from reaching

a resolution of their dispute before the arbitrator issues a

final award.

(2) The independent dispute resolution process shall be

conducted by a resolution organization with the procedures as

of the effective date of this section of the American

Arbitration Association

or similarly qualified organization

as specified by the department. Except as otherwise set forth

in this section, the independent dispute resolution process

shall be in accordance with the procedures of the American

Arbitration Association

Healthcare Payor Provider Arbitration

Rules, Desk/Telephonic Track, with fees calculated pursuant

to the standard fee schedule and based on the monetary amount

in dispute between the out-of-network provider's initial bill

and the insurer's initial out-of-network payment.

(3) An arbitrator appointed to administer the

independent dispute resolution process shall be impartial and

independent of the parties and shall perform the arbitrator's

duties with diligence and in good faith.

(4) The award obtained through the independent dispute

resolution process shall be binding on insurer and provider

THE INSURER AND PROVIDER FOR ANY DISPUTE involving the same

claim code put forth in the demand for arbitration for a

period of one year from the date of the award and shall not

be appealable.

(5) A payment made by an insurer to a provider for an

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award obtained through the independent dispute resolution

process set forth under this subsection, in addition to the

applicable cost-sharing owed by the insured who received the

health care service that is the subject of the independent

dispute resolution process, shall constitute payment in full

for the health care service rendered.

(6) If an insurer or out-of-network provider submits the

A dispute for resolution, the insurer or out-of-network

provider shall also participate in the process as described

in this section.

(b) Process.--The following apply:

(1) The party initiating the independent dispute

resolution process shall file a demand for arbitration and

the applicable administrative filing fee with the resolution

organization and simultaneously send a copy of the demand to

the department and the other party. The initiating party

shall include on the demand the claim code, claim amount and

complete contact information for both parties. The demand

shall be transmitted in accordance with the resolution

organization's procedures.

(2) Within 14 days after notice of the filing of the

demand is sent under paragraph (1), the parties named in the

demand shall EACH submit their best and final offer for the

amount in dispute with any supporting documents to each other

and the resolution organization. The parties may negotiate a

settlement within the 14-day period after notice of the

filing is sent. If a settlement is reached, both parties

shall advise the resolution organization and the department

in writing. If the parties do not notify in writing the

resolution organization that a settlement was reached during

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the 14-day period after notice of the filing is sent, an

arbitrator shall be appointed in accordance with the

procedures of the resolution organization.

(3) Upon appointment of the arbitrator, the resolution

organization shall require the parties to deposit the funds

it deems necessary to cover the expense of arbitration,

including arbitrator's fee, if any, and shall render an

accounting to the parties and return any unexpended balance

at the conclusion of the case. The deposit for arbitrator's

fees shall be split evenly.

(4) After the arbitrator is appointed, the resolution

organization shall transmit the parties' previously submitted

best and final offers with any supporting documents to the

arbitrator.

(5) In making an award under this subsection, the

arbitrator may consider any of the following:

(i) The level of training, education and experience

of the provider.

(ii) The provider's usual charge for comparable

health care services provided in-network and out-of-

network with respect to any health care plans.

(iii) The insurer's usual payment for comparable

health care services provided in-network and out-of-

network in the service area.

(iv) The payment for comparable health care services

provided in the service area by any recognized standard,

including Medicare or a median index.

(v) The availability of the health care service for

the insured from in-network providers.

(vi) The propensity of the provider to be included

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in networks and the propensity of the insurer to include

providers in networks.

(vii) Payments made in prior surprise balance bill

disputes between the provider and the insurer.

(viii) The circumstances and complexity of the

particular case, including the time and place of the

health care service.

(ix) Any final awards between the insurer and

provider for the same claim code from a period of one

year prior.

(6) The arbitrator's award shall be one of the two

amounts submitted by the parties as their best and final

offers and shall be binding on both parties.

(7) The arbitrator shall issue a final binding award in

writing, which shall include the final offers from each party

and the claim code. The final binding award shall be issued

within 30 days after the arbitrator receives the parties'

best and final offer OFFERS and any supporting

documents. Electronic copies of the final award shall be

provided to both parties and the department.

(1) In the final award, the arbitrator shall apportion

the administrative fees, arbitrator compensation and expenses

between the parties TO THE PREVAILING PARTY.

(2) A party that fails to pay all amounts due to the

other party within 30 days of receiving the final award

shall:

(i) pay interest to the prevailing party, calculated

and paid in accordance with section 2166 of the act of

May 17, 1921 (P.L.682, No.284), known as The Insurance

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Company Law of 1921; and

(ii) be subject to a penalty of $100 per day, which

the department shall transmit to the State Treasurer for

deposit into the General Fund, until all payments are

made in full.

(d) Resolution organization records.--A resolution

organization shall comply with all of the following:

(1) Maintaining MAINTAIN, in an easily accessible and

retrievable format and delineated by year, records of the

following:

(i) The written demand filed by the initiating party

establishing the date the resolution organization

receives a request for an independent dispute resolution.

(ii) Complete materials received from both parties.

(iii) The award.

(iv) The date the award was communicated to parties.

(2) Documenting DOCUMENT measures taken to appropriately

safeguard the confidentiality of the records and prevent

unauthorized use and disclosures under applicable Federal and

State law.

(3) Reporting REPORT annually to the department in the

aggregate:

(i) The total number of demands for arbitrations

received by the resolution organization.

(ii) The total number of arbitrations concluded.

(iii) The method of disposition for arbitrations

concluded, including arbitrations withdrawn due to

settlement and the awards made.

(4) Protecting PROTECT from disclosure, except as set

forth in section 502, any information specifically

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identifying the insured who received the health care services

that were the subject of an arbitration decision. The

information shall be protected and remain confidential in

compliance with all applicable Federal and State laws and

regulations. AND SHALL BE CONFIDENTIAL AS NONPUBLIC PERSONAL

HEALTH INFORMATION.

(5) Reporting REPORT immediately to the department a

change in the resolution organization's status which would

cause the resolution organization to cease performing or

being qualified to perform arbitrations in accordance with

this act.

Section 305. Applicability.

This chapter shall not apply to any of the following:

(1) A balance bill for a health care service rendered by

an out-of-network provider when an in-network provider is

available and the insured has elected to receive the service

from an out-of-network provider instead of an in-network

provider.

(2) A health care service for which an entity, other

than an insurer specified under a health insurance policy, is

responsible.

THIS CHAPTER APPLIES TO SURPRISE BALANCE BILLS. NOTHING IN

THIS ACT SHALL PROHIBIT AN INSURER FROM APPROPRIATELY UTILIZING

PRIOR AUTHORIZATION OR OTHER REASONABLE MEDICAL MANAGEMENT

TECHNIQUES.

CHAPTER 5

INSURERS COMMUNICATIONS, RECORDS AND ENFORCEMENT

Section 501. Communications to consumers.

(a) Departmental notice.--The department shall provide a

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notice on the department's publicly accessible Internet website

containing the following:

(1) Information for consumers of health care coverage

specifying the protections provided under this act.

(2) Information regarding the process by which consumers

may report and file complaints with the department or another

appropriate regulatory agency relating to surprise balance

bills.

(b) Provider communications.--The following apply:

(1) A sign which sets forth the following shall be

posted in a prominent place or be included in an appropriate

written or electronic communication by a provider and a

facility in which health care services are rendered to

patients covered by a health care plan who may not be covered

at in-network rates:

(i) The rights of insureds under this act.

(ii) The identification of the department as the

proper Commonwealth agency to receive complaints relating

to surprise balance bills prohibited under this act.

(iii) Contact information for the department.

(2) The department may specify the form and content of

the notice required under paragraph (1).

(3) A communication detailing the cost of a health care

service covered by this act must clearly state that an

insured will only be responsible for payment of the

applicable cost-sharing amounts under the insured's health

care plan.

(1) An insurer shall provide a written notice to each

insured of the protections provided under this act. The

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notice shall include information regarding how an insured may

contact the department to report and dispute a surprise

balance bill. The insurer shall post the notice on the

insurer's publicly accessible Internet website and make it

available upon request within 90 days of the effective date

of this section. The notice shall include an explanation of

benefits for any claim submitted beginning not more than 90

days after the effective date of this section.

(2) The department may specify the form and content of

the notice required under paragraph (1).

(3) A communication detailing the cost of a health care

service covered by this act must clearly state that an

insured will only be responsible for payment of the

applicable cost-sharing amounts under the insured's health

care plan.

Section 502. Records and confidentiality.

(a) General rule.--A record custodian may not disclose

information which is confidential and privileged and not subject

CONFIDENTIAL INFORMATION. CONFIDENTIAL INFORMATION UNDER THIS

SECTION SHALL NOT BE SUBJECT to any of the following:

(1) The act of February 14, 2008 (P.L.6, No.3), known as

the Right-to-Know Law.

(2) A subpoena.

(3) A discovery or admissible evidence DISCOVERY OR

ADMISSIBLE EVIDENCE in any private civil action.

(b) Exception.--A record custodian may disclose CONFIDENTIAL

information which meets the criteria under subsection (a) to the

department, the Department of Health, the Department of State,

the Office of Attorney General or a resolution organization to

facilitate the fulfillment of a duty or obligation, including

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any of the following:

(1) Arbitration of a disputed claim.

(2) Resolution of a consumer complaint.

(3) Investigation and enforcement of an alleged

violation of this act.

construed to prevent the department from using information which

meets the criteria under subsection (a) CONFIDENTIAL INFORMATION

for internal analysis, or from disclosing the AGGREGATED

information in a manner that the identity of the subject of the

information cannot be ascertained.

(d) Waiver prohibited.--The sharing of information which

meets the criteria under subsection (a) CONFIDENTIAL INFORMATION

by the department, the Department of Health, the Department of

State, the Office of Attorney General or a resolution

organization as authorized by subsection (b) does not constitute

a waiver of any applicable privilege or claim of

confidentiality.

Section 503. Enforcement.

(a) Authority.--The following apply:

(1) The department, the Department of Health, the

Department of State and the Office of Attorney General shall

have authority to enforce this act. The appropriate

Commonwealth agency may investigate potential violations

under this act based upon information received from insureds,

insurers, providers and other sources in order to ensure

compliance with this act.

(2) Nothing in this act shall be construed to limit the

ability of the department, the Department of Health, the

Department of State or the Office of Attorney General from

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using information received under this act in the course of

its duties under any other law of the Commonwealth.

(b) Insurer violations.--The following apply:

(1) Upon satisfactory evidence of a violation of this

act by an insurer, the commissioner may, in the

commissioner's discretion, impose any of the penalties set

forth in section 5 of the act of June 25, 1997 (P.L.295,

No.29), known as the Pennsylvania Health Care Insurance

Portability Act.

(2) The enforcement remedies imposed under this

subsection are in addition to any other remedies or penalties

that may be imposed under any other applicable law of this

Commonwealth, including the act of July 22, 1974 (P.L.589,

No.205), known as the Unfair Insurance Practices Act.

Violations of this act by an insurer shall be deemed to be an

unfair method of competition and an unfair or deceptive act

or practice under the Unfair Insurance Practices Act.

(3) Upon receipt or discovery of evidence of a potential

violation of this act by a provider, the department may refer

the matter to the Department of Health, the Department of

State or the Office of Attorney General, as may be

appropriate.

apply:

(1) A violation of a provision of this act by a health

care practitioner shall constitute unprofessional conduct and

subject the health care practitioner to disciplinary action

under the applicable law of this Commonwealth relating to

professional licensure under which the individual is

licensed.

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(2) Money collected under this section shall be

deposited into the fund specified under the applicable law of

this Commonwealth relating to professional licensure under

which the disciplinary action is taken.

(d) EMS agency and facility violations.--The following

apply:

(1) A violation of section 302 or section 501(b) by an

EMS agency shall constitute a violation of AND MAY BE SUBJECT

TO THE PENALTIES PROVIDED FOR IN 35 Pa.C.S. Ch. 81 (relating

to emergency medical services system).

(2) A violation of section 302 or section 501(b) by a

facility shall constitute a violation of AND MAY BE SUBJECT

TO THE PENALTIES PROVIDED FOR IN the act of July 19, 1979

(P.L.130, No.48), known as the Health Care Facilities Act.

(3) Money collected under this subsection shall be

deposited into the General Fund.

(e) Unfair trade practices.--A violation of this act shall

be deemed a violation of AND MAY BE SUBJECT TO THE PENALTIES

PROVIDED FOR IN the act of December 17, 1968 (P.L.1224, No.387),

known as the Unfair Trade Practices and Consumer Protection Law.

(f) Administrative procedure.--The administrative provisions

of this section shall be subject to 2 Pa.C.S. Ch. 5 Subch. A

(relating to practice and procedure of Commonwealth agencies). A

party against whom penalties are assessed in an administrative

action may appeal to Commonwealth Court as provided in 2 Pa.C.S.

Ch. 7 Subch. A (relating to judicial review of Commonwealth

agency action).

(g) Enforcement remedies.--The enforcement remedies imposed

under this section shall be in addition to any other remedies or

penalties that may be imposed under the laws of this

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Commonwealth.

(h) Duplicative penalties.--Two or more Commonwealth

agencies may not impose a penalty on the same insurer or

provider for the same violation. A Commonwealth agency that

imposes a penalty under this act shall notify the department of

the imposition of the penalty.

Section 504. Private cause of action.

Nothing in this act shall be construed to create or imply a

private cause of action for a violation of this act other than

as permitted under the act of December 17, 1968 (P.L.1224,

No.387), known as the Unfair Trade Practices and Consumer

Protection Law.

CHAPTER 7

MISCELLANEOUS PROVISIONS

Section 701. Regulations.

The department, the Department of Health and the Department

of State may EACH promulgate regulations as may be necessary to

implement and enforce this act.

SECTION 702. PUBLICATION OF BENCHMARKING DATABASES.

(A) DATABASES.--THE DEPARTMENT SHALL COMPILE AND MAINTAIN A

LIST OF BENCHMARKING DATABASES MAINTAINED BY NONPROFIT

ORGANIZATIONS NOT AFFILIATED WITH AN INSURER OR PROVIDER.

(B) PUBLICATION.--THE DEPARTMENT SHALL PUBLISH THE LIST OF

BENCHMARKING DATABASES ON THE DEPARTMENT'S PUBLICLY ACCESSIBLE

INTERNET WEBSITE AND ANNUALLY IN THE PENNSYLVANIA BULLETIN ON OR

BEFORE JULY 1.

Section 702 703. Effective date.

This act shall take effect as follows:

(1) The following provisions shall take effect

immediately:

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(i) This section.

(ii) Section 302(f).

(2) The remainder of this act shall take effect in 180

days.

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