PRINTER'S NO. 3256
No. 2453 Session of 1998
INTRODUCED BY VEON, COLAFELLA, DeLUCA, SURRA, MANDERINO, CURRY,
OLASZ, WALKO, OLIVER, LLOYD, SANTONI, MARKOSEK, HALUSKA,
CAPPABIANCA, ITKIN, WOJNAROSKI, JOSEPHS, M. COHEN, DeWEESE,
STABACK, BEBKO-JONES, ROBINSON, GORDNER, ORIE, STURLA,
BELARDI, MUNDY, JAMES, TRAVAGLIO, BELFANTI, SCRIMENTI,
CORPORA, BOSCOLA, READSHAW, WOGAN, ROONEY, WAUGH, COY,
KENNEY, TRELLO, TRICH, CARN, SHANER, LAUGHLIN, McCALL,
TANGRETTI, CASORIO, LUCYK, HORSEY, MELIO AND SAINATO,
MARCH 23, 1998
REFERRED TO COMMITTEE ON INSURANCE, MARCH 23, 1998
AN ACT
1 Providing for confidentiality of medical records, for financial
2 incentive restrictions on managed care plans, for health
3 insurance policy disclosures, for the Office of Consumer
4 Advocate for Insurance, for access to women's health care
5 providers, for utilization review and appeals and for
6 safeguards under managed care plans.
7 TABLE OF CONTENTS
8 Chapter 1. Preliminary Provisions
9 Section 101. Short title.
10 Section 102. Definitions.
11 Chapter 3. Confidentiality of Medical Records
12 Section 301. Restriction on release or disclosure.
13 Section 302. Written consent.
14 Section 303. Disclosure.
15 Section 304. Statement.
16 Section 305. Duty of recipient or health information user.
1 Section 306. Identity of subject.
2 Section 307. Record of disclosures.
3 Section 308. Employers.
4 Section 309. Availability of information.
5 Section 310. Duty of Department of Health.
6 Section 311. Construction.
7 Section 312. Penalties and remedies.
8 Chapter 5. Financial Incentive Restrictions
9 Section 501. Certain compensation prohibited.
10 Section 502. Renegotiation of contracts.
11 Section 503. Construction.
12 Chapter 7. Health Insurance Policy Disclosures
13 Section 701. Health insurance policy disclosure.
14 Section 702. Duty of employers.
15 Chapter 9. Office of Consumer Advocate for Insurance
16 Section 901. Definitions.
17 Section 902. Office of Consumer Advocate for Insurance.
18 Section 903. Assistants and employees.
19 Section 904. Powers and duties of Consumer Advocate for
20 Insurance.
21 Section 905. Duties of department.
22 Section 906. Consumer Advocate for Insurance Fund.
23 Section 907. Reports.
24 Section 908. Construction.
25 Chapter 11. Access to Women's Health Care Providers
26 Section 1101. Definitions.
27 Section 1102. Policy requirements.
28 Section 1103. Insurer requirements.
29 Section 1104. Delivery of policy.
30 Chapter 13. Utilization Review and Appeals
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1 Section 1301. Definitions.
2 Section 1302. Utilization review standards.
3 Section 1303. Appeals.
4 Section 1304. External utilization review appeals.
5 Chapter 15. Safeguards Under Managed Care Plans
6 Section 1501. Definitions.
7 Section 1502. Emergency room services.
8 Section 1503. Continuing care upon termination of provider.
9 Section 1504. Referral to specialist.
10 Section 1505. Recertification of managed care entities.
11 Chapter 17. Miscellaneous Provisions
12 Section 1701. Repeals.
13 Section 1702. Applicability.
14 Section 1703. Effective date.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 CHAPTER 1
18 PRELIMINARY PROVISIONS
19 Section 101. Short title.
20 This act shall be known and may be cited as the Managed Care
21 Bill of Rights Act.
22 Section 102. Definitions.
23 The following words and phrases when used in this act shall
24 have the meanings given to them in this section unless the
25 context clearly indicates otherwise:
26 "Health information." Any individually identifiable data,
27 description or medical record, regardless of medium, pertaining
28 to the past, present or future health of a person.
29 "Health information user." Any physician, a hospital, an
30 employer or an organization that processes bills, claims or
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1 appeals, a pharmaceutical benefit management organization and
2 any other service organization which in the course of conducting
3 business comes in contact with health information.
4 "Health insurance policy." Any individual or group health
5 insurance policy, contract or plan which provides medical or
6 health care coverage by any health care facility or licensed
7 health care provider on an expense-incurred service or prepaid
8 basis and which is offered by or is governed under any of the
9 following:
10 (1) Act of May 17, 1921 (P.L.682, No.284), known as The
11 Insurance Company Law of 1921.
12 (2) Subarticle (f) of Article IV of the act of June 13,
13 1967 (P.L.31, No.21), known as the Public Welfare Code.
14 (3) Act of December 29, 1972 (P.L.1701, No.364), known
15 as the Health Maintenance Organization Act.
16 (4) Act of May 18, 1976 (P.L.123, No.54), known as the
17 Individual Accident and Sickness Insurance Minimum Standards
18 Act.
19 (5) Act of December 14, 1992 (P.L.835, No.134), known as
20 the Fraternal Benefit Societies Code.
21 (6) A nonprofit corporation subject to 40 Pa.C.S. Chs.
22 61 (relating to hospital plan corporations) and 63 (relating
23 to professional health services plan corporations).
24 "Medical record." The written, graphic or electronic
25 documentation of a medical condition, course of treatment or
26 test result, or lack thereof, regardless of medium pertaining to
27 an individual person.
28 "Provider." A person providing medical, nursing or other
29 health care services of any kind or a hospital, nursing home,
30 hospice, drug and alcohol services provider, clinic, blood bank,
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1 plasmapheresis or other blood product center, organ or tissue
2 bank, sperm bank, clinical laboratory or a health care
3 institution required to be licensed in this Commonwealth.
4 CHAPTER 3
5 CONFIDENTIALITY OF MEDICAL RECORDS
6 Section 301. Restriction on release or disclosure.
7 All health information in the possession or custody of a
8 provider or health information user shall be confidential and
9 may not be released or its contents disclosed to anyone, except:
10 (1) To the subject of the health information.
11 (2) To the subject's physician, provided that the
12 subject has indicated the identity of that physician to whom
13 such information may be released.
14 (3) To a person specifically designated in a written
15 consent under section 302.
16 (4) To an agent, employee or medical staff member of a
17 provider when disclosure is necessary for purposes of
18 diagnosis or treatment.
19 (5) To prevent death or severe illness in an emergency
20 where disclosure of health information is necessary for
21 treatment of the subject of the health information.
22 (6) To a peer review organization or committee as
23 defined in the act of July 20, 1974 (P.L.564, No.193), known
24 as the Peer Review Protection Act, a nationally recognized
25 accrediting agency, any Federal or State government agency
26 with oversight responsibilities over health care providers,
27 or as otherwise provided by law.
28 (7) To an insurer, but only to the extent necessary to
29 reimburse a provider or to make payment of a claim submitted
30 under an insured's policy.
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1 (8) Pursuant to an order of a court of common pleas
2 after application showing good cause with proper notice and
3 an opportunity to be heard. The court shall weigh the need
4 for disclosure against the privacy interest of the individual
5 and possible harm resulting from disclosure.
6 Section 302. Written consent.
7 A written consent to disclose health information shall
8 include:
9 (1) The specific name of the individual or organization
10 permitted to make the disclosure.
11 (2) The name or title of the individual to whom or the
12 name of the organization to which the disclosure is to be
13 made.
14 (3) The name of the subject whose records are to be
15 disclosed.
16 (4) The specific purpose or purposes of the disclosure.
17 (5) The amount and kind of information to be disclosed.
18 (6) One of the following:
19 (i) the signature of the subject;
20 (ii) if the subject is 12 years of age or younger,
21 the signature of the subject's parent or guardian; or
22 (iii) if the subject is unable to sign, the
23 signature of an individual authorized by law to make such
24 decisions on behalf of the subject.
25 (7) The date on which the consent is signed.
26 (8) A statement that the consent is subject to
27 revocation at any time except to the extent that the person
28 who is to make the disclosure has already acted in reliance
29 on it.
30 (9) The date, event or condition upon which the consent
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1 will expire if not earlier revoked. In no event shall a
2 written consent under this act be deemed valid more than one
3 year after the date the consent was signed.
4 Section 303. Disclosure.
5 A disclosure may not be made on the basis of a consent which:
6 (1) has expired;
7 (2) on its face substantially fails to conform to any of
8 the requirements set forth under section 302;
9 (3) is known to have been revoked; or
10 (4) is known by the person holding the information to be
11 materially false.
12 Section 304. Statement.
13 Each disclosure made under this chapter must be accompanied
14 by the following written statement:
15 This information has been disclosed to you from records
16 the confidentiality of which is protected by Commonwealth
17 law. Commonwealth law prohibits you from making any
18 further disclosure of this information unless further
19 disclosure is expressly permitted by the written consent
20 of the person to whom it pertains. A general
21 authorization for the release of health or other
22 information or medical records is not sufficient for this
23 purpose.
24 Section 305. Duty of recipient or health information user.
25 In the event that health information is disclosed under this
26 chapter, the recipient of the health information or the health
27 information user shall maintain the confidentiality of the
28 health information, and necessary steps shall be taken to ensure
29 the confidentiality of the health information consistent with
30 the express purpose for which the information was released. The
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1 health information disclosed shall not be disclosed by the
2 recipient of the health information or a health information user
3 to another source without the consent of the subject of the
4 information as provided in section 302.
5 Section 306. Identity of subject.
6 Unless there is a compelling need to disclose the actual
7 identity of the subject, all information relating to the
8 identity of the subject or from which the identity can be
9 reasonably determined shall not be disclosed.
10 Section 307. Record of disclosures.
11 Providers shall maintain, as a permanent part of the
12 individual's medical records, a record of all disclosures of
13 health information to any person or entity not employed by or
14 directly affiliated with it. The records shall include the name
15 and address of each person receiving the health information and
16 a description of the information disclosed.
17 Section 308. Employers.
18 Health information may not be disclosed to an individual's
19 employer without the written consent of the individual under
20 section 302. No employer, including a self-insured employer, may
21 maintain health information in an employee's personnel file or
22 any file which is maintained for purposes other than health care
23 delivery. Any health information in the possession of an
24 employer or its agents shall be confidential and may not be
25 disclosed, released or used for internal job-related purposes
26 without the individual's consent as provided under section 302.
27 Section 309. Availability of information.
28 (a) General rule.--Any person, provider or other entity
29 subject to the laws of this Commonwealth in possession of health
30 information shall upon request of the subject of the health
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1 information disclose to the subject of the health information or
2 his designee the health information in its possession, or
3 portion thereof, upon the request of the subject of the health
4 information, at a cost not to exceed 30¢ per page. Such
5 disclosure shall be made within 14 days.
6 (b) Errors.--
7 (1) If the subject of the health information, or a
8 designee, discovers an error in the subject's health
9 information, the subject, or a designee, shall be provided
10 the opportunity to submit evidence of the error to the person
11 or entity in possession of the health information.
12 (2) Any person or entity which had been notified of a
13 possible error in a subject's health information shall within
14 30 days either:
15 (i) correct the error and notify all parties to whom
16 that person or entity has made a disclosure of the
17 erroneous health information; or
18 (ii) notify the subject of the health information,
19 or a designee, that to the best of its ability it
20 believes that the health information in its possession is
21 accurate and shall note the exception in the health
22 information.
23 Section 310. Duty of Department of Health.
24 Within one year of the effective date of this chapter, the
25 Department of Health shall promulgate standards for the
26 implementation of administrative, technological and physical
27 safeguards by providers, their agents and health information
28 users to protect against unauthorized disclosure of individually
29 identifiable health information.
30 Section 311. Construction.
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1 Nothing in this chapter is intended to alter limitations on
2 disclosure or release of health information or medical records
3 that are prescribed in the laws of this Commonwealth.
4 Section 312. Penalties and remedies.
5 (a) Civil action.--Any person aggrieved by a violation of
6 this chapter shall have a cause of action against the person or
7 entity which committed the violation and may recover:
8 (1) Compensatory damages, but not less than liquidated
9 damages, computed at the rate of $1,000 for each violation.
10 (2) Punitive damages.
11 (3) Reasonable attorney fees and litigation costs.
12 (b) Criminal penalty.--Any person misrepresenting himself in
13 an effort to obtain confidential health information on any
14 individual or any person who knowingly releases or discloses
15 health information contrary to this chapter commits a felony of
16 the third degree.
17 (c) Each disclosure separate.--Each disclosure of health
18 information in violation of this chapter shall be considered a
19 separate violation for purposes of civil liability.
20 CHAPTER 5
21 FINANCIAL INCENTIVE RESTRICTIONS
22 Section 501. Certain compensation prohibited.
23 A managed care plan may not use any financial incentives that
24 compensate a health care provider for ordering or providing less
25 than medically necessary and appropriate care to enrollees.
26 Section 502. Renegotiation of contracts.
27 In addition to the reasons specified in section 8(a) of the
28 act of December 29, 1972 (P.L.1701, No.364), known as the Health
29 Maintenance Organization Act, the Secretary of Health shall have
30 the authority to require renegotiations of any managed care
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1 provider contract if the contract includes incentives for
2 providers to provide inadequate or poor quality care of if the
3 payment arrangement could have the capacity to lead to
4 inadequate or poor quality care.
5 Section 503. Construction.
6 Nothing in this chapter shall be deemed to prohibit a managed
7 care plan from using a capitation payment arrangement.
8 CHAPTER 7
9 HEALTH INSURANCE POLICY DISCLOSURES
10 Section 701. Health insurance policy disclosure.
11 (a) General rule.--Each health insurance policy offered to
12 the public within this Commonwealth shall provide disclosure
13 forms as required by this section. The disclosure form shall be
14 in a form prescribed by the Insurance Commissioner.
15 (b) Content of disclosure form.--Each disclosure form shall
16 contain at least all of the following information:
17 (1) A separate roster of the health insurer's primary
18 care physicians who are licensed under the act of December
19 20, 1985 (P.L.457, No.112), known as the Medical Practice Act
20 of 1985, or the act of October 5, 1978 (P.L.1109, No.261),
21 known as the Osteopathic Medical Practice Act, including the
22 physician's degree, practice specialty, initial year of
23 licensure and year licensed to practice in Pennsylvania.
24 (2) In concise and specific terms:
25 (i) The full premium cost of the health insurance
26 policy.
27 (ii) Any copayment, coinsurance or deductible
28 requirements that an insured or the insured's family may
29 incur in obtaining coverage under the health insurance
30 policy and any reservation by the health insurance policy
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1 to change premiums.
2 (iii) The health care benefits to which an insured
3 would be entitled. The disclosure shall state where and
4 in what manner an insured may obtain services, including
5 the procedures for selecting or changing primary care
6 physicians and the locations of hospitals and outpatient
7 treatment centers that are under contract with the health
8 insurer.
9 (3) Any limitations of the services, kinds of service,
10 benefits and exclusions that apply to the health insurance
11 policy. A description of limitations shall include:
12 (i) Procedures for emergency room, nighttime or
13 weekend visits and referrals to specialist physicians.
14 (ii) Whether services received outside the health
15 insurance policy are covered and in what manner they are
16 covered.
17 (iii) Procedures an insured must follow, if any, to
18 obtain prior authorization for services.
19 (iv) A statement regarding whether or not providers
20 must comply with any specified numbers, targeted averages
21 or maximum durations of patient visits. If any of these
22 are required of providers, the disclosure shall state the
23 specific requirements.
24 (v) The procedure to be followed by an insured for
25 consulting a physician other than the primary care
26 physician and whether the insured's primary care
27 physician, the health insurer's medical director or a
28 committee must first authorize the referral.
29 (vi) Whether a point of service option is available
30 and, if so, how it is structured.
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1 (4) Grievance procedures for claim or treatment denials,
2 dissatisfaction with care and access to care issues.
3 (5) A response to whether an insurer's physician is
4 restricted to prescribing drugs from the health insurer's
5 list or formulary and the extent to which an insured will be
6 reimbursed for costs of a drug that is not on the health
7 insurer's list or formulary.
8 (6) A response to whether provider compensation programs
9 include any incentives or penalties that are intended to
10 encourage providers to withhold services or minimize or avoid
11 referrals to specialists. If these types of incentives or
12 penalties are included, the health insurer shall provide a
13 concise description of them. The health insurer may also
14 include, in a separate section, a concise explanation or
15 justification for the use of these incentives or penalties.
16 (7) A statement that the disclosure form is a summary
17 only and that evidence of coverage is determined by the
18 governing contractual provisions of the health insurance
19 policy.
20 (c) Approval prerequisite.--A health insurer shall not
21 disseminate a completed disclosure form until that form has been
22 approved by the Insurance Commissioner. For purposes of this
23 section, a health insurer is not required to submit to the
24 Insurance Commissioner its separate roster of plan physicians or
25 any roster updates.
26 (d) Information to employers.--Upon request, a health
27 insurer shall provide the information required under subsection
28 (b) to all employers who are considering participating in a
29 health insurance policy that is offered by the health insurer or
30 to an employer that is considering renewal of a health insurance
19980H2453B3256 - 13 -
1 policy that is provided by the health insurer.
2 Section 702. Duty of employers.
3 (a) Disclosure to employees.--An employer shall provide to
4 its eligible employees the disclosures required under section
5 701(b) no later than the initiation of any open enrollment
6 period or at least ten days before any employee enrollment
7 deadline that is not associated with an open enrollment period.
8 (b) Contract without disclosure prohibited.--An employer
9 shall not execute a contract with a health insurer until the
10 employer receives the information required under section 701(b).
11 CHAPTER 9
12 OFFICE OF CONSUMER ADVOCATE FOR INSURANCE
13 Section 901. Definitions.
14 The following words and phrases when used in this chapter
15 shall have the meanings given to them in this section unless the
16 context clearly indicates otherwise:
17 "Consumer." Any person who is a named insured, insured or
18 beneficiary of a policy of insurance or any other person who may
19 be affected in any way by the Insurance Department's exercise of
20 or the failure to exercise its authority.
21 "Department." The Insurance Department of the Commonwealth.
22 The term includes the Insurance Commissioner.
23 "Fund." The Consumer Advocate for Insurance Fund established
24 pursuant to section 906.
25 "Insurer." Any "company," "association" or "exchange" as
26 such terms are defined in section 101 of the act of May 17, 1921
27 (P.L.789, No.285), known as The Insurance Department Act of
28 1921.
29 Section 902. Office of Consumer Advocate for Insurance.
30 (a) Office created.--There is hereby created as an
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1 independent office within the Office of Attorney General an
2 Office of Consumer Advocate for Insurance appointed by the
3 Attorney General to represent the interest of consumers before
4 the department.
5 (b) Appointment of Consumer Advocate for Insurance.--The
6 Office of Consumer Advocate for Insurance shall be headed by the
7 Consumer Advocate for Insurance appointed by the Attorney
8 General who by reason of training, experience and attainment is
9 qualified to represent the interest of consumers. Compensation
10 shall be set by the Executive Board.
11 (c) Limitation on other employment and interests.--No
12 individual who serves as a Consumer Advocate for Insurance
13 shall, while serving in the position, engage in any business,
14 vocation or other employment, or have other interests,
15 inconsistent with the official responsibilities, nor shall the
16 individual seek or accept employment nor render beneficial
17 services for compensation with any insurer subject to the
18 authority of the office during the tenure of the appointment and
19 for a period of two years immediately after the appointment is
20 served or terminated.
21 (d) Restriction on holding political office.--Any individual
22 who is appointed to the position of Consumer Advocate for
23 Insurance shall not seek election nor accept appointment to any
24 political office during the tenure as Consumer Advocate for
25 Insurance and for a period of two years after the appointment is
26 served or terminated.
27 Section 903. Assistants and employees.
28 The Consumer Advocate for Insurance shall appoint attorneys
29 as assistant consumer advocates for insurance and additional
30 clerical, technical and professional staff as may be appropriate
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1 and may contract for additional services as shall be necessary
2 for the performance of the duties imposed by this chapter. The
3 compensation of assistant consumer advocates for insurance and
4 clerical, technical and professional staff shall be set by the
5 Executive Board. No assistant consumer advocate for insurance or
6 other staff employee shall, while serving in the position,
7 engage in any business, vocation or other employment, or have
8 other interests, inconsistent with official responsibilities.
9 Section 904. Powers and duties of Consumer Advocate for
10 Insurance.
11 (a) General powers and duties.--In addition to any other
12 authority conferred by this chapter, the Consumer Advocate for
13 Insurance is authorized to and shall, in carrying out the
14 responsibilities under this chapter, represent the interest of
15 consumers as a party, or otherwise participate for the purpose
16 of representing an interest of consumers, before the department
17 in any matter properly before the department, and before any
18 court or agency, initiating proceedings if, in the judgment of
19 the Consumer Advocate for Insurance, the representation may be
20 necessary, in connection with any matter involving regulation by
21 the department or the corresponding regulatory agency of the
22 Federal Government, whether on appeal or otherwise initiated.
23 (b) Consideration of public interest.--The Consumer Advocate
24 for Insurance may exercise discretion in determining the
25 interests of consumers which will be advocated in any particular
26 proceeding and in determining whether or not to participate in
27 or initiate any particular proceeding and, in so determining,
28 shall consider the public interest, the resources available and
29 the substantiality of the effect of the proceeding on the
30 interest of consumers. The Consumer Advocate for Insurance may
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1 refrain from intervening when, in the judgment of the Consumer
2 Advocate for Insurance, intervention is not necessary to
3 represent adequately the interest of consumers.
4 (c) Representation of consumers upon petition.--In addition
5 to any other authority conferred by this article, the Consumer
6 Advocate for Insurance is authorized to represent an interest of
7 consumers which is presented for consideration, upon petition in
8 writing, by a substantial number of persons who are consumers of
9 an insurer subject to regulation by the department. The Consumer
10 Advocate for Insurance shall notify the principal sponsors of
11 the petition within a reasonable time after receipt of the
12 petition of the action taken or intended to be taken with
13 respect to the interest of consumers presented in that petition.
14 If the Consumer Advocate for Insurance declines or is unable to
15 represent the interest, written notification and the reasons for
16 the action shall be given to the sponsors.
17 (d) Style of action.--
18 (1) Any action brought by the Consumer Advocate for
19 Insurance before a court or an agency of this Commonwealth
20 shall be brought in the name of the Consumer Advocate for
21 Insurance.
22 (2) Notwithstanding paragraph (1), the Consumer Advocate
23 for Insurance may name a consumer or group of consumers in
24 whose name the action may be brought or may join with a
25 consumer or group of consumers in bringing the action.
26 (e) Public statement of consumer interest.--At a time as the
27 Consumer Advocate for Insurance determines, in accordance with
28 applicable time limitations, to initiate, intervene or otherwise
29 participate in any department, agency or court proceeding, the
30 Consumer Advocate for Insurance shall issue publicly a written
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1 statement, a copy of which shall be filed in the proceeding in
2 addition to any required entry of appearance, stating concisely
3 the specific interest of consumers to be protected.
4 (f) Service of documents filed by insurers.--The Consumer
5 Advocate for Insurance shall be served with copies of all
6 filings, correspondence or other documents filed by insurers
7 with the department unless the Consumer Advocate for Insurance
8 informs the insurer that specific types of classes of documents
9 need not be so served. The department shall not accept a
10 document as timely filed if the document is also required to be
11 served on the Consumer Advocate for Insurance and the insurer
12 has not indicated that service has or is being made on the
13 Consumer Advocate for Insurance. Insurers shall provide any
14 other nonpriviledged information or data requested by the
15 Consumer Advocate for Insurance to the extent that the request
16 is reasonably related to the performance of his duties under
17 this chapter.
18 Section 905. Duties of department.
19 In dealing with any proposed action which may substantially
20 affect the interest of consumers, including, but not limited to,
21 a proposed change of rates and the adoption of rules,
22 regulations, guidelines, orders, standards or final policy
23 decisions, the department shall:
24 (1) Notify the Consumer Advocate for Insurance and
25 provide, free of charge, copies of all related documents when
26 notice of the proposed action is given to the public or at a
27 time fixed by agreement between the Consumer Advocate for
28 Insurance and the department in a manner to assure the
29 Consumer Advocate for Insurance reasonable notice and
30 adequate time to determine whether to intervene in the
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1 matter.
2 (2) Consistent with its other statutory
3 responsibilities, take action with due consideration to the
4 interest of consumers.
5 Section 906. Consumer Advocate for Insurance Fund.
6 (a) Fund established.--There is hereby established a
7 separate account in the State Treasury to be known as the
8 Consumer Advocate for Insurance Fund. This fund shall be
9 administered by the State Treasurer.
10 (b) Moneys held in trust.--All moneys deposited into the
11 fund shall be held in trust and shall not be considered general
12 revenue of the Commonwealth but shall be used only to effectuate
13 the purposes of this chapter. The fund shall be subject to audit
14 by the Auditor General.
15 (c) Assessment imposed upon insurers.--Prior to the first
16 day of April following the effective date of this chapter and
17 prior to the first day of April of each year thereafter so long
18 as this chapter shall remain in effect, each insurer who writes
19 coverages for fire and casualty, accident and health, credit
20 accident and health under life/annuity/accident, health and
21 life, including annuities in this Commonwealth, as a condition
22 of its authorization to transact business in this Commonwealth,
23 shall pay into the fund in trust an amount equal to the product
24 obtained by multiplying $5,000,000 by a fraction, the numerator
25 of which is the direct premium collected for all coverages by
26 that insurer in this Commonwealth during the preceding calendar
27 year and the denominator of which is the direct premium written
28 on such coverages in this Commonwealth by all insurers in the
29 same period. Any insurer who fails to pay the required
30 assessment under this section shall be prohibited from writing
19980H2453B3256 - 19 -
1 any insurance within this Commonwealth.
2 (d) Base amount.--In succeeding years the General Assembly
3 may vary the base amount of $5,000,000 based upon the actual
4 funding experience and requirements of the Office of Consumer
5 Advocate for Insurance.
6 (e) Assessments not burdens and prohibitions.--Assessments
7 made under this section shall not be considered burdens and
8 prohibitions under section 212 of the act of May 17, 1921
9 (P.L.789, No.285), known as The Insurance Department Act of
10 1921.
11 (f) Dissolution of fund.--In the event that the trust fund
12 is dissolved or the Office of Consumer Advocate for Insurance is
13 terminated by operation of law, any balance remaining in the
14 fund, after deducting administrative costs for liquidation,
15 shall be returned to insurers in proportion to their financial
16 contributions to the fund in the preceding calendar year.
17 Section 907. Reports.
18 The Consumer Advocate for Insurance shall annually transmit
19 to the Governor and to the General Assembly and shall make
20 available to the public, an annual report on the conduct of the
21 Office of Consumer Advocate for Insurance. The Consumer Advocate
22 for Insurance shall make recommendations as may, from time to
23 time, be necessary or desirable to protect the interest of
24 consumers.
25 Section 908. Construction.
26 (a) Consumer rights preserved.--Nothing contained in this
27 chapter shall in any way limit the right of any consumer to
28 bring a proceeding before either the department or a court.
29 (b) Authority of department unaffected.--Nothing contained
30 in this chapter shall be construed to impair the statutory
19980H2453B3256 - 20 -
1 authority or responsibility of the department to regulate
2 insurers in the public interest.
3 CHAPTER 11
4 ACCESS TO WOMEN'S HEALTH CARE PROVIDERS
5 Section 1101. Definitions.
6 The following words and phrases when used in this chapter
7 shall have the meanings given to them in this section unless the
8 context clearly indicates otherwise:
9 "Enrollee." An individual who has contracted for or who
10 participates in coverage offered by a health insurer.
11 "Health insurer." An entity that issues a health insurance
12 policy and is governed by any of the following:
13 (1) Act of May 17, 1921 (P.L.682, No.284), known as The
14 Insurance Company Law of 1921.
15 (2) Act of December 29, 1972 (P.L.1701, No.364), known
16 as the Health Maintenance Organization Act.
17 (3) Act of May 18, 1976 (P.L.123, No.54), known as the
18 Individual Accident and Sickness Insurance Minimum Standards
19 Act.
20 (4) Act of December 14, 1992 (P.L.835, No.134), known as
21 the Fraternal Benefit Societies Code.
22 (5) 40 Pa.C.S. Ch. 61 (relating to hospital plan
23 corporations) or 63 (relating to professional health services
24 plan corporations).
25 (6) Medical assistance.
26 "Pregnancy care." The care necessary to support a healthy
27 pregnancy and care related to labor and delivery.
28 "Provider network." Health care practitioners and health
29 care facilities designated by a health care insurer for enrollee
30 use in obtaining covered health services.
19980H2453B3256 - 21 -
1 "Women's health care provider." An obstetrician and
2 gynecologist, a certified registered nurse practitioner with a
3 clinical specialty area of obstetrics/gynecology or women's
4 health, or a certified nurse-midwife, practicing within the
5 applicable lawful scope of practice.
6 Section 1102. Policy requirements.
7 A health insurance policy which is delivered, issued for
8 delivery, renewed, extended or modified in this Commonwealth by
9 a health insurer that requires an enrollee to designate a
10 primary care provider shall:
11 (1) Provide that an enrollee may designate from the
12 insurer's provider network a women's health care provider so
13 long as the women's health care provider requests the
14 designation.
15 (2) Permit enrollees to obtain the following health
16 services from their designated women's health care provider
17 without prior approval or referral from the enrollee's
18 primary care provider:
19 (i) Any primary and preventive gynecological care
20 covered by the health insurance policy.
21 (ii) Services covered by the health insurance policy
22 required as a result of any obstetrical or gynecological
23 examination or as a result of a gynecological condition.
24 (iii) Pregnancy care.
25 (iv) Testing and treatment for infertility covered
26 by the health insurance policy.
27 (3) Permit women's health care providers to refer
28 enrollees to providers from the insurer's provider network
29 for medically necessary obstetrical and gynecological
30 services, including related testing, laboratory services and
19980H2453B3256 - 22 -
1 treatment covered by the health insurance policy. Insurers
2 may not require that these referrals be subject to the
3 approval or review of an enrollee's primary care provider.
4 Section 1103. Insurer requirements.
5 Health insurers:
6 (1) May limit the number of women's health care
7 providers in a provider network, but must ensure that there
8 are sufficient women's health care providers within a
9 provider network so that enrollees have access to women's
10 health care providers in a timely fashion.
11 (2) Shall consult with practicing women's health care
12 providers regarding the professional qualifications and
13 geographic composition of its women's health care provider
14 component of its provider network.
15 (3) Shall include in an enrollee handbook a written
16 explanation of an enrollee's right to designate a women's
17 health care provider and the enrollee's right to obtain the
18 services listed in section 1102(b) and (c) from a women's
19 health care provider who is part of the insurer's provider
20 network without prior approval or referral from the
21 enrollee's primary care provider. The written explanation
22 shall be in clear, accurate and conspicuous language.
23 (4) May not impose cost-sharing, such as copayments or
24 deductibles, for health care services on the basis that
25 health care services were received under section 1102.
26 Section 1104. Delivery of policy.
27 If a health insurance policy provides coverage or benefits to
28 a resident of this Commonwealth it shall be deemed to be
29 delivered in this Commonwealth within the meaning of this
30 chapter, regardless of whether the health care insurer issuing
19980H2453B3256 - 23 -
1 or delivering the policy is located within or outside of this
2 Commonwealth.
3 CHAPTER 13
4 UTILIZATION REVIEW AND APPEALS
5 Section 1301. Definitions.
6 The following words and phrases when used in this chapter
7 shall have the meanings given to them in this section unless the
8 context clearly indicates otherwise:
9 "Enrollee." An individual who has contracted for or who
10 participates in coverage under:
11 (1) an insurance policy issued by a professional health
12 service corporation, hospital plan corporation or a health
13 and accident insurer;
14 (2) a contract issued by a health maintenance
15 organization or a preferred provider organization; or
16 (3) other benefit programs providing payment,
17 reimbursement or indemnification for the costs of health care
18 for the covered individual.
19 "Health care insurer." Any entity operating under any of the
20 following:
21 (1) Section 630 of the act of May 17, 1921 (P.L.682,
22 No.284), known as The Insurance Company Law of 1921.
23 (2) Act of December 29, 1972 (P.L.1701, No.364), known
24 as the Health Maintenance Organization Act.
25 (3) Act of May 18, 1976 (P.L.123, No.54), known as the
26 Individual Accident and Sickness Insurance Minimum Standards
27 Act.
28 (4) 40 Pa.C.S. Ch.61 (relating to hospital plan
29 corporations).
30 (5) 40 Pa.C.S. Ch.63 (relating to professional health
19980H2453B3256 - 24 -
1 services plan corporations) except for section 6324 (relating
2 to rights of health service doctors).
3 (6) A fraternal benefit society charter.
4 (7) Any successor laws.
5 "Payer." A health care insurer as well as any other entity
6 employing, affiliated with or contracting with a utilization
7 review entity or paying for credentialing activities.
8 "Provider." The physician, licensed practitioner or health
9 care facility identified to a utilization review entity or
10 insurer as having prescribed, proposed to provide or provided
11 health care services to a covered individual.
12 "Secretary." The Secretary of Health of the Commonwealth.
13 "Utilization review." A system for prospective, concurrent,
14 retrospective review or case management of the medical necessity
15 and appropriateness of health care services provided or proposed
16 to be provided to a covered individual. The term does not
17 include any of the following:
18 (1) requests for clarification of coverage, eligibility
19 or benefits verification;
20 (2) a health care facility's or a health care
21 practitioner's internal quality assurance or utilization
22 review process unless such review results in a denial of
23 payment, coverage or treatment; or
24 (3) refusal to contract with health care practitioners
25 or health care facilities.
26 "Utilization review determination." The rendering of a
27 decision based on utilization review that approves or denies
28 either of the following:
29 (1) the necessity or appropriateness of the allocations
30 of health care resources to a covered individual; or
19980H2453B3256 - 25 -
1 (2) the provision or proposed provision of covered
2 health care services to an enrollee.
3 "Utilization review entity." Any payer or any entity
4 performing utilization review while employed by, affiliated
5 with, under contract with or acting on behalf of any of the
6 following:
7 (1) an entity doing business in this Commonwealth;
8 (2) an integrated delivery system;
9 (3) a party that provides or administers health care
10 benefits to citizens of this Commonwealth, including a health
11 care insurer, self-insured plan, professional health service
12 corporation, hospital plan corporation, preferred provider
13 organization or health maintenance organization authorized to
14 offer health insurance policies or contracts to pay for the
15 delivery of health care services or treatment in this
16 Commonwealth; or
17 (4) the Commonwealth or any of its political
18 subdivisions or instrumentalities.
19 The term shall not include entities conducting internal
20 utilization review for health care facilities, home health
21 agencies, health maintenance organizations, preferred provider
22 organizations or other managed care entities, or private health
23 care professional offices unless the performance of such
24 utilization review results in the denial of payment, coverage or
25 treatment.
26 Section 1302. Utilization review standards.
27 (a) Requirements.--Utilization review entities providing
28 services in this Commonwealth must satisfy all of the following
29 requirements:
30 (1) For the purpose of responding to inquiries
19980H2453B3256 - 26 -
1 concerning the entity's utilization review determinations:
2 (i) provide toll-free telephone access at least 40
3 hours each week during normal business hours;
4 (ii) maintain a telephone call answering service or
5 recording system during hours other than normal business
6 hours; and
7 (iii) respond to each telephone call left with the
8 answering service or on the recording system within one
9 business day after the call is left with respect to the
10 review determination.
11 (2) Protect the confidentiality of individual medical
12 records:
13 (i) as required by all applicable Federal and State
14 laws and ensure that a covered individual's medical
15 records and other confidential medical information
16 obtained in the performance of utilization review are not
17 improperly disclosed or redisclosed;
18 (ii) by only requesting medical records and other
19 information which are reasonably necessary to make
20 utilization review determination for the care under
21 review; and
22 (iii) have mechanisms in place that allow a provider
23 to verify that an individual requesting information on
24 behalf of the organization is a legitimate representative
25 of the organization.
26 (3) Unless required by law or court order, prevent third
27 parties from obtaining a covered individual's medical records
28 or confidential information obtained in the performance of
29 utilization review.
30 (4) Assure that personnel conducting utilization review
19980H2453B3256 - 27 -
1 shall have current licenses that are in good standing and
2 without restrictions from a state health care professional
3 licensing agency in the United States.
4 (5) Within one business day after receiving a request
5 for an initial utilization review determination that includes
6 all information reasonably necessary to complete the
7 utilization review determination, notify the enrollee and the
8 provider of record of the utilization review determination by
9 mail or other means of communication.
10 (6) Include the following in the written notification of
11 a utilization review determination denying coverage for an
12 admission, service, procedure, medical supplies and equipment
13 or a request for approval of continuing treatment for the
14 condition involved in previously approved admissions,
15 services or procedures, medical supplies and equipment:
16 (i) the principal reasons for the determination if
17 the determination is based on medical necessity or the
18 appropriateness of the admission, service, procedure,
19 medical supplies and equipment, or extension of service;
20 and
21 (ii) the description of the appeal procedure,
22 including the name and telephone number of the person to
23 contact in regard to an appeal and the deadline for
24 filing an appeal.
25 (7) Ensure that initial adverse utilization review
26 determination as to the necessity or appropriateness of an
27 admission, service, procedure or medical supplies and
28 equipment is made by a licensed physician or, if appropriate,
29 a psychologist.
30 (8) Ensure that on appeal all determinations not to
19980H2453B3256 - 28 -
1 certify an admission, service, procedure, medical supplies
2 and equipment or extension of stay must be made by a licensed
3 physician or, if appropriate, a psychologist in the same or
4 similar general specialty as typically manages or recommends
5 treatment for the medical condition, procedure or treatment.
6 Further, no physician or psychologist who has been involved
7 in prior reviews of the case under appeal may participate as
8 the sole reviewer of a case under appeal.
9 (9) Provide a period of at least 24 hours following an
10 emergency admission, service, procedure or medical supplies
11 and equipment during which an enrollee or representative of
12 an enrollee may notify the health care insurer and request
13 approval or continuing treatment for the condition under
14 review in the admission, extension of stay, service,
15 procedure, medical supplies and equipment.
16 (10) Provide an appeals procedure satisfying the
17 requirements set forth in this chapter.
18 (11) Disclose utilization review criteria to providers
19 upon denial.
20 (b) Alternative practices.--Payers and providers may
21 establish alternative utilization review standards, practices
22 and procedures by contract that meet or exceed the requirements
23 in subsection (a) and that are approved by the department.
24 Section 1303. Appeals.
25 (a) Review.--An independent peer review entity shall review
26 the information considered by the health care insurer in
27 reaching its decision and any written submissions of the
28 provider of record provided during the internal appeal process.
29 The decision to hold a hearing or otherwise take evidence shall
30 be within the sole discretion of the independent peer review
19980H2453B3256 - 29 -
1 entity.
2 (b) Time for decision.--The written decision of the
3 independent peer review entity shall be issued no later than 30
4 days after receipt of all documentation necessary to rule upon
5 the appeal and shall be binding upon each party.
6 Section 1304. External utilization review appeals.
7 The utilization review plan of utilization review entities or
8 health care insurers must provide for independent external
9 adjudication in cases where the second level of appeal to
10 reverse an adverse determination is unsuccessful that adheres to
11 the following provisions:
12 (1) The provider or patient may initiate the external
13 appeal within 60 days of the adverse determination by
14 submitting written notice to the utilization review entity or
15 health care insurer. The secretary shall randomly apportion
16 the appeals to the independent review entities. Appeals shall
17 be limited to adverse utilization review decisions regarding
18 medical necessity and medical appropriateness. Appeals shall
19 also be permitted for providers terminated without cause.
20 (2) The person conducting the independent peer review
21 shall be a licensed physician or, if appropriate, a
22 psychologist, in active clinical practice in the same or
23 similar specialty as typically manages or recommends
24 treatment for the medical condition under review.
25 CHAPTER 15
26 SAFEGUARDS UNDER MANAGED CARE PLANS
27 Section 1501. Definitions.
28 The following words and phrases when used in this chapter
29 shall have the meanings given to them in this section unless the
30 context clearly indicates otherwise:
19980H2453B3256 - 30 -
1 "Emergency room services." Health care services provided
2 after the sudden onset of a medical condition that manifests
3 itself by acute symptoms of sufficient severity, including
4 severe pain, such that a prudent layperson who possesses an
5 average knowledge of health and medicine could reasonably expect
6 the absence of immediate medical attention to result in:
7 (1) placing the health of the individual, or with
8 respect to a pregnant woman, the health of the woman or her
9 unborn child, in serious jeopardy;
10 (2) serious impairment to bodily functions; or
11 (3) serious dysfunction of any bodily organ or part.
12 "Enrollee." An individual who is enrolled in a managed care
13 plan operated by a managed care entity.
14 "Health care provider." A clinic, hospital, physician
15 organization, preferred provider organization, independent
16 practice association or other appropriately licensed provider of
17 health care services or supplies.
18 "Managed care entity." Any entity including a licensed
19 insurance company, hospital or medical service plan, health
20 maintenance organization, third party administrator or any
21 person or entity that establishes, operates or contracts with a
22 network of participating health care professionals.
23 "Managed care plan." A plan operated by a managed care
24 entity that provides for the financing and delivery of health
25 care services to persons enrolled in the plan, with financial
26 incentives for persons enrolled in the plan to use the
27 participating health care professionals and procedures covered
28 by the plan.
29 "Primary care provider" or "PCP." A provider who supervises,
30 coordinates and provides initial and basic care to enrollees,
19980H2453B3256 - 31 -
1 who initiates their referral for specialist care and who
2 maintains continuity of patient care. Providers may only
3 administer care within the scope of their practice.
4 "Referral." A prior authorization from the managed care plan
5 or an authorized provider that allows an enrollee to have one or
6 more appointments with a health care provider for consultation,
7 diagnosis or treatment of a medical condition, to be covered as
8 a benefit under the enrollee's managed care plan contract. An
9 enrollee or a primary care provider shall be able to select any
10 specialist for referral within the plan's network.
11 "Specialist." A health care provider whose practice is not
12 limited to primary care medical services and who has additional
13 postgraduate or specialized training, board certification or
14 practice in a licensed, specialized area of health care. The
15 term shall include a provider who is not classified by a plan
16 solely as a primary care provider.
17 Section 1502. Emergency room services.
18 (a) General rule.--A managed care plan shall include
19 provisions approved by the secretary that, in the event an
20 enrollee seeks emergency room services and if in the opinion of
21 the emergency health care provider responsible for the
22 enrollee's emergency care and treatment these services are
23 necessary, the emergency provider may initiate necessary
24 intervention to evaluate and stabilize the condition of the
25 enrollee without seeking or receiving authorization from the
26 managed care plan.
27 (b) Payment of costs.--The managed care plan shall be
28 required to pay for all reasonably necessary costs associated
29 with the emergency services provided during the period of the
30 emergency.
19980H2453B3256 - 32 -
1 (c) Criteria for claim processing.--When processing a claim
2 for reimbursement of emergency services, a managed care plan
3 shall consider both the symptoms and services provided using the
4 prudent layperson standard described under the definition of
5 "emergency room services" in section 1501. The provider shall
6 notify the enrollee's managed care plan of the provision of
7 emergency services and the condition of the enrollee.
8 (d) Relocation to another facility.--If an enrollee's
9 condition has stabilized and the enrollee can be transported to
10 another facility or service without suffering detrimental
11 consequences or aggravating the enrollee's condition, the
12 enrollee may be relocated to another facility which will provide
13 continued care and treatment as necessary.
14 Section 1503. Continuing care upon termination of provider.
15 (a) General rule.--Except as provided in subsection (b), if
16 a managed care plan terminates its contract with a participating
17 health care provider or a primary care provider at the plan's
18 initiative, an enrollee who has selected that provider or PCP to
19 receive covered services may continue an ongoing course of
20 treatment with that provider or PCP, at the enrollee's option,
21 for a transitional period of up to 90 days from the date the
22 enrollee was notified by the plan of the termination. The
23 managed care plan, in consultation with the enrollee and the
24 provider or PCP, may extend this transitional period if
25 determined to be clinically appropriate. In the case of an
26 enrollee in the second or third trimester of pregnancy at the
27 time of notice of the termination, the transitional period shall
28 extend through postpartum care related to the delivery. Any
29 health care service provided in accordance with this section
30 shall be covered by the managed care plan under the same terms
19980H2453B3256 - 33 -
1 and conditions extended to the enrollee while the provider or
2 PCP was participating in the managed care plan.
3 (b) Exception.--If a participating health care provider or
4 PCP is terminated at the plan's initiative for fraud, criminal
5 activity or posing a danger to an enrollee or the public health,
6 safety or welfare as determined by the plan, the plan shall not
7 be responsible for covered services provided to the enrollee
8 following the date of termination for cause of the provider or
9 PCP.
10 (c) Notice of contract termination.--Whenever a plan
11 terminates its contract with a PCP, each of the PCP's enrollees
12 shall be notified by the plan of the termination and shall be
13 requested to select another PCP.
14 (d) Option of new enrollee.--A new enrollee, at the
15 enrollee's option, may continue an ongoing course of treatment
16 with a nonparticipating health care provider or PCP for a
17 transitional period of up to 90 days from the effective date of
18 enrollment in a managed care plan. The managed care plan, in
19 consultation with the enrollee and the provider or PCP, may
20 extend this transitional period if determined to be clinically
21 appropriate. In the case of a new enrollee in the second or
22 third trimester of pregnancy on the effective date of
23 enrollment, the transitional period shall extend through
24 postpartum care related to the delivery. Any health care service
25 provided in accordance with this section shall be covered by the
26 managed care plan under the same terms and conditions as
27 applicable for participating providers and primary care
28 providers.
29 (e) Nonparticipating health care provider.--A managed care
30 plan may require a nonparticipating health care provider or PCP
19980H2453B3256 - 34 -
1 whose services are covered in accordance with this section to
2 meet the same terms and conditions as participating providers
3 and primary care providers.
4 (f) Construction.--Nothing in this section shall require a
5 managed care plan to cover services or provide benefits that are
6 not otherwise covered under the terms and provisions of the
7 plan.
8 Section 1504. Referral to specialist.
9 (a) Procedure.--A managed care plan shall have procedures
10 approved by the secretary by which an enrollee with a life-
11 threatening, degenerative or disabling disease or condition
12 shall, upon request, be evaluated and, if the enrollee meets the
13 plan's established standards as approved by the secretary, the
14 enrollee shall subsequently be afforded:
15 (1) a standing referral to a specialist with expertise
16 in treating the disease or condition; or
17 (2) a referral to a specialist designated as responsible
18 for providing and coordinating the enrollee's primary and
19 speciality care.
20 (b) Treatment plan.--The referral or designation shall be
21 pursuant to a treatment plan approved by the managed care plan,
22 in consultation with the primary care provider, the enrollee
23 and, where appropriate, the specialist. Where possible, the
24 specialist should be a member of the plan's network.
25 Section 1505. Recertification of managed care entities.
26 (a) Application for reissuance of license required.--All
27 managed care entities holding a license issued by the Insurance
28 Department of the Commonwealth on the effective date of this
29 chapter shall, as a condition of doing business in this
30 Commonwealth, within one year of the effective date of this
19980H2453B3256 - 35 -
1 chapter make an application to the department for reissuance of
2 their licenses. Each application shall contain sufficient
3 evidence that the managed care entity satisfies the requirements
4 for licensure.
5 (b) Rules and regulations.--The Insurance Commissioner of
6 the Commonwealth shall promulgate rules and regulations to
7 administer and enforce this section.
8 CHAPTER 17
9 MISCELLANEOUS PROVISIONS
10 Section 1701. Repeals.
11 All acts and parts of acts are repealed insofar as they are
12 inconsistent with this act.
13 Section 1702. Applicability.
14 Chapters 7 and 11 shall apply to all health insurance
15 policies issued on or after or renewed on or after January 1,
16 1999.
17 Section 1703. Effective date.
18 This act shall take effect as follows:
19 (1) Section 906(c) shall take effect in 90 days.
20 (2) The remainder of Chapter 9 shall take effect July 1,
21 1998.
22 (3) The remainder of this act shall take effect in 60
23 days.
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