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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session


Posted: February 6, 2019 10:00 AM
From: Senator Jay Costa
To: All Senate members
Subject: Integrated Delivery Network Contract Dispute Resolution and Patient Access & Consumer Choice Act
In the near future I will be introducing legislation similar to address contractual disputes between integrated delivery networks. While there currently is a consent decree in place between UPMC and Highmark in Western Pennsylvania, this agreement will come to a close this June. This legislation is needed not just to prepare for the eventual end of the consent decree in Western Pennsylvania but to address the potential issue of integrated delivery networks competing throughout the Commonwealth.

Under current law, there is no mechanism to resolve contract disputes between large integrated delivery networks, like UPMC, Allegheny Health Network, and Geisinger, which could threaten patient access and choice. This proposal will address contracting disputes first by focusing on hospitals operating as part of an integrated delivery network – where a large health system and insurance carrier/health plan operate under the same corporate structure. These institutions deserve special attention, as they function both as providers and payers, and therefore can have an exceptional impact on the marketplace and consumers.

There are strong consumer protection and public policy reasons for adopting this legislation. First, by requiring hospitals and physicians operating as part of an integrated delivery network to contract with all insurers, consumers will not be denied care, or worse abandoned mid-treatment, simply because they hold one type of insurance over another. All consumers should be afforded access to these vital hospital and physician services, regardless of which insurance card they carry. Second, the legislation will also eliminate the ability of any dominant hospital system from demanding unreasonable rates for services from insurers, and in turn raising the overall cost of health care because they are the “must have” system in the area.

Document #1

Introduced as SB310

Description: Bill 1:  Integrated Delivery Network Contract Dispute Resolutions

The first bill would amend the Health Care Facilities Act by setting additional requirements on hospitals operating as part of an integrated delivery network.  Specifically, the bill would add the following criteria to obtain a license to operate a hospital in the Commonwealth:

●  Require hospitals operating as part of an integrated delivery network to contract with
any willing insurer.
●  Permit hospitals operating as part of an integrated delivery network to contract for its services at any price or discount that result in adequate reimbursement rates, provided that such rates are based upon sound actuarial data and the open exchange of information.
●  Prohibit hospitals operating as part of an integrated delivery network when contracting with insurers from using contractual provisions and engaging in business practices that impede the availability of quality health care at affordable prices and that restrict access to facilities or services. 
●  If a mutually agreeable contract cannot be reached, a contract will be imposed on the parties through mandatory binding arbitration, and will include a default reimbursement rate established to set a minimum level of compensation to be paid by insurers to non-participating providers for emergency services.
●  Establish a Health Care Competition and Oversight Board to ensure that an effectively operating competitive marketplace exists in the Commonwealth, and that the market for healthcare goods and services operates to serve the interests of consumers.

Document #2

Introduced as SB311

Description: Bill 2:  Patient Access and Consumer Choice 

Patient Access & Consumer Choice Act

The second bill would enact the Assuring Patient Access & Consumer Choice Act, by establishing the same contracting requirements on hospital-owned physician practice organizations operating as part of an integrated delivery network.