PRIOR PRINTER'S NO. 1171 PRINTER'S NO. 1756
No. 1000 Session of 2007
INTRODUCED BY MANDERINO, KENNEY, ADOLPH, ARGALL, BARRAR, BELFANTI, BENNINGHOFF, BEYER, BIANCUCCI, BISHOP, BLACKWELL, BOYD, BUXTON, CALTAGIRONE, CAPPELLI, CARROLL, CASORIO, CIVERA, COHEN, COSTA, CREIGHTON, CURRY, DALLY, DeLUCA, DePASQUALE, DERMODY, DeWEESE, DiGIROLAMO, DONATUCCI, EACHUS, J. EVANS, FABRIZIO, FAIRCHILD, FRANKEL, FREEMAN, GEIST, GEORGE, GERGELY, GIBBONS, GINGRICH, GRELL, GRUCELA, HANNA, HARHART, HARKINS, HENNESSEY, HERSHEY, HESS, JAMES, JOSEPHS, KAUFFMAN, W. KELLER, KILLION, KING, KORTZ, KOTIK, KULA, LEACH, LEVDANSKY, MACKERETH, MAHONEY, MAJOR, MANN, MARKOSEK, McCALL, McGEEHAN, McILHATTAN, McILVAINE SMITH, MELIO, MOYER, MUNDY, MURT, MUSTIO, MYERS, NAILOR, NICKOL, D. O'BRIEN, M. O'BRIEN, OLIVER, O'NEILL, PALLONE, PARKER, PASHINSKI, PETRONE, PICKETT, PRESTON, QUIGLEY, RAMALEY, RAPP, RAYMOND, READSHAW, REED, REICHLEY, ROEBUCK, ROSS, RUBLEY, SAMUELSON, SANTONI, SCAVELLO, SHAPIRO, SHIMKUS, SIPTROTH, K. SMITH, M. SMITH, SOLOBAY, SONNEY, STEIL, STERN, R. STEVENSON, STURLA, SURRA, SWANGER, TANGRETTI, THOMAS, TRUE, VEREB, VULAKOVICH, WAGNER, WALKO, WANSACZ, WATSON, WILLIAMS, WOJNAROSKI, YOUNGBLOOD, YUDICHAK, BENNINGTON, LONGIETTI, SAINATO, STABACK, LENTZ, SCHRODER, VITALI, CONKLIN, HORNAMAN, PHILLIPS, ROHRER, MILNE, HARPER, GABIG AND MANTZ, APRIL 3, 2007
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, JUNE 4, 2007
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," providing, PROVIDING FOR <--
12 RETROACTIVE DENIAL OF REIMBURSEMENT OF PAYMENTS TO HEALTH
1 CARE PROVIDERS BY INSURERS AND, in quality health care 2 accountability and protection, for mental health services; 3 and further providing, in quality health care accountability 4 and protection, for procedures. 5 The General Assembly of the Commonwealth of Pennsylvania 6 hereby enacts as follows: 7 Section 1. The act of May 17, 1921 (P.L.682, No.284), known <-- 8 as The Insurance Company Law of 1921, is amended by adding a 9 section to read: 10 SECTION 1. THE ACT OF MAY 17, 1921 (P.L.682, NO.284), KNOWN <-- 11 AS THE INSURANCE COMPANY LAW OF 1921, IS AMENDED BY ADDING AN 12 ARTICLE TO READ: 13 ARTICLE VI-B 14 RETROACTIVE DENIAL OF REIMBURSEMENTS 15 § 601-B. SCOPE OF ARTICLE. 16 THIS ARTICLE SHALL NOT APPLY TO REIMBURSEMENTS MADE AS PART 17 OF AN ANNUAL CONTRACTED RECONCILIATION OF A RISK-SHARING 18 ARRANGEMENT UNDER AN ADMINISTRATIVE SERVICE PROVIDER CONTRACT. 19 § 602-B. DEFINITIONS. 20 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ARTICLE 21 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE 22 CONTEXT CLEARLY INDICATES OTHERWISE: 23 "CODE." ANY OF THE FOLLOWING CODES: 24 (1) THE APPLICABLE CURRENT PROCEDURAL TERMINOLOGY (CPT) 25 CODE, AS ADOPTED BY THE AMERICAN MEDICAL ASSOCIATION. 26 (2) IF FOR DENTAL SERVICE, THE APPLICABLE CODE ADOPTED 27 BY THE AMERICAN DENTAL ASSOCIATION. 28 (3) ANOTHER APPLICABLE CODE UNDER AN APPROPRIATE UNIFORM 29 CODING SCHEME USED BY AN INSURER IN ACCORDANCE WITH THIS 30 ARTICLE. 31 "CODING GUIDELINES." THOSE STANDARDS OR PROCEDURES USED OR 20070H1000B1756 - 2 -
1 APPLIED BY A PAYOR TO DETERMINE THE MOST ACCURATE AND 2 APPROPRIATE CODE OR CODES FOR PAYMENT BY THE PAYOR FOR A SERVICE 3 OR SERVICES. 4 "FRAUD." THE INTENTIONAL MISREPRESENTATION OR CONCEALMENT OF 5 INFORMATION IN ORDER TO DECEIVE OR MISLEAD. 6 "HEALTH CARE PROVIDER." A PERSON, CORPORATION, FACILITY, 7 INSTITUTION OR OTHER ENTITY LICENSED, CERTIFIED OR APPROVED BY 8 THE COMMONWEALTH TO PROVIDE HEALTH CARE OR PROFESSIONAL MEDICAL 9 SERVICES. THE TERM INCLUDES, BUT IS NOT LIMITED TO, A PHYSICIAN, 10 CHIROPRACTOR, OPTOMETRIST, PROFESSIONAL NURSE, CERTIFIED NURSE- 11 MIDWIFE, PODIATRIST, HOSPITAL, NURSING HOME, AMBULATORY SURGICAL 12 CENTER OR BIRTH CENTER. 13 "INSURER." AN ENTITY SUBJECT TO ANY OF THE FOLLOWING: 14 (1) 40 PA.C.S. CH. 61 (RELATING TO HOSPITAL PLAN 15 CORPORATIONS) OR 63 (RELATING TO PROFESSIONAL HEALTH SERVICES 16 PLAN CORPORATIONS). 17 (2) THIS ACT. 18 (3) THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364), 19 KNOWN AS THE HEALTH MAINTENANCE ORGANIZATION ACT. 20 "MEDICAL ASSISTANCE PROGRAM." THE PROGRAM ESTABLISHED UNDER 21 THE ACT OF JUNE 13, 1967 (P.L.31, NO.21), KNOWN AS THE PUBLIC 22 WELFARE CODE. 23 "MEDICARE." THE FEDERAL PROGRAM ESTABLISHED UNDER TITLE 24 XVIII OF THE SOCIAL SECURITY ACT (49 STAT. 620, 42 U.S.C. § 301 25 ET SEQ. OR 1395 ET SEQ.). 26 "REIMBURSEMENT." PAYMENTS MADE TO A HEALTH CARE PROVIDER BY 27 AN INSURER ON EITHER A FEE-FOR-SERVICE, CAPITATED OR PREMIUM 28 BASIS. 29 § 603-B. RETROACTIVE DENIAL OF REIMBURSEMENT. 30 (A) GENERAL RULE.--IF AN INSURER RETROACTIVELY DENIES 20070H1000B1756 - 3 -
1 REIMBURSEMENT TO A HEALTH CARE PROVIDER, THE INSURER MAY ONLY: 2 (1) RETROACTIVELY DENY REIMBURSEMENT FOR SERVICES 3 SUBJECT TO COORDINATION OF BENEFITS WITH ANOTHER INSURER, THE 4 MEDICAL ASSISTANCE PROGRAM OR THE MEDICARE PROGRAM DURING THE 5 12-MONTH PERIOD AFTER THE DATE THAT THE INSURER PAID THE 6 HEALTH CARE PROVIDER; AND 7 (2) EXCEPT AS PROVIDED IN PARAGRAPH (1), RETROACTIVELY 8 DENY REIMBURSEMENT DURING A 12-MONTH PERIOD AFTER THE DATE 9 THAT THE INSURER PAID THE HEALTH CARE PROVIDER. 10 (B) WRITTEN NOTICE.--AN INSURER THAT RETROACTIVELY DENIES 11 REIMBURSEMENT TO A HEALTH CARE PROVIDER UNDER SUBSECTION (A) 12 SHALL PROVIDE THE HEALTH CARE PROVIDER WITH A WRITTEN STATEMENT 13 SPECIFYING THE BASIS FOR THE RETROACTIVE DENIAL. IF THE 14 RETROACTIVE DENIAL OF REIMBURSEMENT RESULTS FROM COORDINATION OF 15 BENEFITS, THE WRITTEN STATEMENT SHALL PROVIDE THE NAME AND 16 ADDRESS OF THE ENTITY ACKNOWLEDGING RESPONSIBILITY FOR PAYMENT 17 OF THE DENIED CLAIM. 18 § 604-B. EFFECT OF NONCOMPLIANCE. 19 EXCEPT AS PROVIDED IN SECTION 605-B, AN INSURER THAT DOES NOT 20 COMPLY WITH THE PROVISIONS OF SECTION 603-B MAY NOT 21 RETROACTIVELY DENY REIMBURSEMENT OR ATTEMPT IN ANY MANNER TO 22 RETROACTIVELY COLLECT REIMBURSEMENT ALREADY PAID TO A HEALTH 23 CARE PROVIDER. 24 § 605-B. FRAUDULENT OR IMPROPERLY CODED INFORMATION. 25 (A) REASONS FOR DENIAL.--THE PROVISIONS OF SECTION 603-B DO 26 NOT APPLY IF AN INSURER RETROACTIVELY DENIES REIMBURSEMENT TO A 27 HEALTH CARE PROVIDER BECAUSE: 28 (1) THE INFORMATION SUBMITTED TO THE INSURER WAS 29 FRAUDULENT; 30 (2) THE INFORMATION SUBMITTED TO THE INSURER WAS 20070H1000B1756 - 4 -
1 IMPROPERLY CODED AND THE INSURER HAS PROVIDED TO THE HEALTH 2 CARE PROVIDER SUFFICIENT INFORMATION REGARDING THE CODING 3 GUIDELINES USED BY THE INSURER AT LEAST 30 DAYS PRIOR TO THE 4 DATE THE SERVICES SUBJECT TO THE RETROACTIVE DENIAL WERE 5 RENDERED; OR 6 (3) THE CLAIM SUBMITTED TO THE INSURER WAS A DUPLICATE 7 CLAIM. 8 (B) IMPROPER CODING.--INFORMATION SUBMITTED TO THE INSURER 9 MAY BE CONSIDERED TO BE IMPROPERLY CODED UNDER SUBSECTION (A)(2) 10 IF THE INFORMATION SUBMITTED TO THE INSURER BY THE HEALTH CARE 11 PROVIDER: 12 (1) USES CODES THAT DO NOT CONFORM WITH THE CODING 13 GUIDELINES USED BY THE CARRIER APPLICABLE AS OF THE DATE THE 14 SERVICE OR SERVICES WERE RENDERED; OR 15 (2) DOES NOT OTHERWISE CONFORM WITH THE CONTRACTUAL 16 OBLIGATIONS OF THE HEALTH CARE PROVIDER TO THE INSURER 17 APPLICABLE AS OF THE DATE THE SERVICE OR SERVICES WERE 18 RENDERED. 19 § 606-B. COORDINATION OF BENEFITS. 20 IF AN INSURER RETROACTIVELY DENIES REIMBURSEMENT FOR SERVICES 21 AS A RESULT OF COORDINATION OF BENEFITS UNDER PROVISIONS OF 22 SECTION 605-B(A), THE HEALTH CARE PROVIDER SHALL HAVE SIX MONTHS 23 FROM THE DATE OF THE DENIAL, UNLESS AN INSURER PERMITS A LONGER 24 TIME PERIOD, TO SUBMIT A CLAIM FOR REIMBURSEMENT FOR THE SERVICE 25 TO THE INSURER, THE MEDICAL ASSISTANCE PROGRAM OR MEDICARE 26 PROGRAM RESPONSIBLE FOR PAYMENT. 27 SECTION 2. THE ACT IS AMENDED BY ADDING A SECTION TO READ: 28 Section 2116.1. Mental Health Services.--(a) If an enrollee <-- 29 has obtained a referral or other authorization through 30 utilization review from a managed care plan or a licensed 20070H1000B1756 - 5 -
1 insurer to receive outpatient mental health care services from a 2 health care provider or specialist, such referral or other 3 authorization shall constitute a standing referral for any 4 subsequent outpatient mental health care services provided by 5 any health care provider or specialist until the mental health 6 care service for which the referral or authorization was 7 approved has reached its conclusion. 8 Section 2 3. Section 2121(b) of the act, added June 17, 1998 <-- 9 (P.L.464, No.68), is amended to read: 10 Section 2121. Procedures.--* * * 11 (b) The department shall establish credentialing standards 12 for managed care plans. The department may adopt nationally 13 recognized accrediting standards to establish the credentialing 14 standards for managed care plans. With respect to outpatient 15 behavioral health services, the managed care plan or licensed 16 insurer shall inform credentialing applicants of a decision 17 within ninety (90) days after the complete application has been 18 submitted. 19 * * * 20 Section 3 4. This act shall take effect in 60 days. <-- C12L40VDL/20070H1000B1756 - 6 -