PRINTER'S NO. 1586
No. 1238 Session of 1999
INTRODUCED BY KASUNIC, TARTAGLIONE, O'PAKE, HUGHES, SCHWARTZ,
WAGNER, MELLOW, STAPLETON, BODACK, BELAN, COSTA, KITCHEN,
LAVALLE, MUSTO AND BOSCOLA, DECEMBER 8, 1999
REFERRED TO PUBLIC HEALTH AND WELFARE, DECEMBER 8, 1999
AN ACT
1 Providing for distribution of a portion of the proceeds from the
2 settlement between the Commonwealth and tobacco product
3 manufacturers to certain hospitals that provide care to
4 persons without health insurance and for powers and duties of
5 the Department of Health.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the Uncompensated
10 Health Care Reimbursement Act.
11 Section 2. Legislative findings and declaration.
12 (a) Findings.--The General Assembly finds as follows:
13 (1) Access to health care is vital to the well-being of
14 all citizens of this Commonwealth.
15 (2) Many citizens of this Commonwealth cannot afford
16 adequate health care insurance. Without insurance coverage,
17 these citizens look to hospitals to provide necessary health
18 care services.
19 (3) Hospitals in this Commonwealth have taken on the
1 financial burden of providing health care services to
2 uninsured individuals.
3 (4) Hospitals in this Commonwealth have sustained losses
4 of more than $700 million in providing health care to
5 uninsured individuals.
6 (b) Declaration.--The General Assembly declares that
7 hospitals in this Commonwealth that expend a certain percent of
8 their budgets providing uncompensated care should receive money
9 from the master settlement agreement between the Commonwealth
10 and tobacco product manufacturers.
11 Section 3. Definitions.
12 The following words and phrases when used in this act shall
13 have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Bad debt expense." The foregone revenue for care in which
16 the hospital initially anticipated payment or extended credit to
17 the patient, and later determined it to be uncollectible.
18 "Charity care." The care a hospital provides without charges
19 because the patient is unable to compensate the hospital either
20 through third-party coverage or the patient's own resources.
21 "Department." The Department of Health of the Commonwealth.
22 "Distribution." Payment from the Uncompensated Health Care
23 Fund to an eligible hospital.
24 "Eligible hospital." A hospital that meets the requirements
25 of section 5(a).
26 "Fund." The Uncompensated Health Care Fund established under
27 this act.
28 "Master settlement agreement." The settlement agreement and
29 related documents entered into on January 13, 1999, by the
30 Commonwealth and leading United States tobacco product
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1 manufacturers.
2 "Net proceeds." The amount of money made available annually
3 to the Commonwealth under the master settlement agreement less
4 any sum deducted for a master settlement agreement reserve fund.
5 Section 4. Uncompensated Health Care Fund.
6 (a) Establishment.--There is hereby established in the State
7 Treasury the Uncompensated Health Care Fund.
8 (b) Payments into the fund.--An amount equal to 12.2% of the
9 net proceeds available to the Commonwealth under the master
10 settlement agreement shall be deposited into the fund.
11 (c) Administration.--The department shall administer the
12 fund in accordance with the provisions of this act.
13 Section 5. Determination of eligibility for distribution.
14 (a) Criteria.--In order to be eligible for distributions
15 under this act, a hospital must satisfy all of the following
16 criteria:
17 (1) The hospital must meet at least one of the
18 following:
19 (i) in accordance with the Health Care Cost
20 Containment Council's Annual Report on the Financial
21 Health of Pennsylvania's Hospitals, the hospital must
22 provide health care services above the regional weighted
23 average to persons receiving Medicaid or Medicare;
24 (ii) the hospital must show a net operating loss in
25 three of the most recent and available fiscal years
26 preceding an application for a distribution.
27 (2) The hospital must submit to a management audit
28 performed by the Auditor General to determine its financial
29 soundness, in accordance with the regulations promulgated by
30 the department.
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1 (3) The hospital must be licensed by the department as a
2 hospital in this Commonwealth. If a hospital fails to
3 maintain licensure throughout the fiscal year in which
4 distributions are made, the department may discontinue
5 distributions and require the return of any distributions
6 made in the fiscal year in which licensure was suspended or
7 revoked.
8 (4) The hospital must provide screenings and treatment
9 for cancer, including, but not limited to, the following:
10 (i) Annual gynecological examination, including a
11 pelvic examination and clinical breast examination in
12 accordance with the act of April 22, 1994 (P.L.136,
13 No.20), known as the Women's Preventative Health Services
14 Act.
15 (ii) Routine pap smears in accordance with the
16 recommendations of the American College of Obstetricians
17 and Gynecologists in accordance with the Women's
18 Preventative Health Services Act.
19 (iii) Mammographic examination every year for women
20 40 years of age or older and any mammogram based on a
21 physician's recommendation for women under 40 years of
22 age in accordance with the provisions of section 632 of
23 the act of May 17, 1921 (P.L.682, No.284), known as The
24 Insurance Company Law of 1921.
25 (iv) For men 50 years of age or older, an annual
26 digital rectal examination to detect prostate cancer.
27 (v) For men 40 years of age or older with a family
28 history of prostate cancer or other prostate cancer risk
29 factors, an annual digital rectal examination to detect
30 prostate cancer.
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1 (vi) For men 50 years of age or older, an annual
2 prostate specific antigen (PSA) test or a test consistent
3 with approved medical standards and practices, as deemed
4 medically necessary.
5 (vii) For men 40 years of age or older with a family
6 history of prostate cancer or other prostate cancer risk
7 factors, an annual prostate specific antigen (PSA) test
8 or a test consistent with approved medical standards and
9 practices, as deemed medically necessary.
10 (viii) For individuals 50 years of age or older, an
11 annual fecal occult blood test and, every fourth year
12 after an individual reaches 50 years of age, a
13 sigmoidoscopy or a test consistent with approved medical
14 standards and practices to detect colon cancer.
15 (5) The hospital must submit an application for
16 distributions on a form approved by the department.
17 (b) Report to General Assembly.--On or before February 1 of
18 each year, the department shall transmit to the General Assembly
19 a list of hospitals that received distributions under this act.
20 Section 6. Distribution formula.
21 (a) General rule.--The department shall promulgate a formula
22 for the distribution of funds under this act which shall
23 include, but need not be limited to, the factors set forth in
24 subsection (b). Where possible any factors used by the
25 department shall take an average of the three most recent and
26 available fiscal years of a hospital.
27 (b) Factors.--The factors that must be considered are:
28 (1) the ratio of the sum of bad debt expense and charity
29 care to the net patient revenue of the hospital;
30 (2) the Medicare and Medicaid percentages of net patient
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1 revenue of the hospital; and
2 (3) the operating margin of the hospital.
3 Section 7. Rules and regulations.
4 The department shall promulgate rules and regulations to
5 administer and enforce this act.
6 Section 8. Expiration.
7 This act expires in three years unless extended by statute.
8 Section 9. Effective date.
9 This act shall take effect immediately.
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