PRIOR PRINTER'S NOS. 1171, 1756 PRINTER'S NO. 1996
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 THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, JUNE 20, 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 for retroactive denial of 12 reimbursement of payments to health care providers by
1 insurers and, in quality health care accountability and 2 protection, for mental health services; and further 3 providing, in quality health care accountability and 4 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 an 9 article to read: 10 ARTICLE VI-B 11 RETROACTIVE DENIAL OF REIMBURSEMENTS 12 § 601-B. Scope of article. 13 This article shall not apply to reimbursements made as part 14 of an annual contracted reconciliation of a risk-sharing 15 arrangement under an administrative service provider contract. 16 § 602-B. Definitions. 17 The following words and phrases when used in this article 18 shall have the meanings given to them in this section unless the 19 context clearly indicates otherwise: 20 "Code." Any of the following codes: 21 (1) The applicable Current Procedural Terminology (CPT) 22 code, as adopted by the American Medical Association. 23 (2) If for dental service, the applicable code adopted 24 by the American Dental Association. 25 (3) Another applicable code under an appropriate uniform 26 coding scheme used by an insurer in accordance with this 27 article. 28 "Coding guidelines." Those standards or procedures used or 29 applied by a payor to determine the most accurate and 30 appropriate code or codes for payment by the payor for a service 31 or services. 20070H1000B1996 - 2 -
1 "Fraud." The intentional misrepresentation or concealment of 2 information in order to deceive or mislead. 3 "Health care provider." A person, corporation, facility, 4 institution or other entity licensed, certified or approved by 5 the Commonwealth to provide health care or professional medical 6 services. The term includes, but is not limited to, a physician, 7 chiropractor, optometrist, professional nurse, certified nurse- 8 midwife, podiatrist, hospital, nursing home, ambulatory surgical 9 center or birth center. 10 "Insurer." An entity subject to any of the following: 11 (1) 40 Pa.C.S. Ch. 61 (relating to hospital plan 12 corporations) or 63 (relating to professional health services 13 plan corporations). 14 (2) This act. 15 (3) The act of December 29, 1972 (P.L.1701, No.364), 16 known as the Health Maintenance Organization Act. 17 "Medical assistance program." The program established under 18 the act of June 13, 1967 (P.L.31, No.21), known as the Public 19 Welfare Code. 20 "Medicare." The Federal program established under Title 21 XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. § 301 22 et seq. or 1395 et seq.). 23 "Reimbursement." Payments made to a health care provider by 24 an insurer on either a fee-for-service, capitated or premium 25 basis. 26 § 603-B. Retroactive denial of reimbursement. 27 (a) General rule.--If an insurer retroactively denies 28 reimbursement to a health care provider, the insurer may only: 29 (1) retroactively deny reimbursement for services 30 subject to coordination of benefits with another insurer, the 20070H1000B1996 - 3 -
1 medical assistance program or the Medicare program during the 2 12-month period after the date that the insurer paid the 3 health care provider; and 4 (2) except as provided in paragraph (1), retroactively 5 deny reimbursement during a 12-month period after the date 6 that the insurer paid the health care provider. 7 (b) Written notice.--An insurer that retroactively denies 8 reimbursement to a health care provider under subsection (a) 9 shall provide the health care provider with a written statement 10 specifying the basis for the retroactive denial. If the 11 retroactive denial of reimbursement results from coordination of 12 benefits, the written statement shall provide the name and 13 address of the entity acknowledging responsibility for payment 14 of the denied claim. 15 § 604-B. Effect of noncompliance. 16 Except as provided in section 605-B, an insurer that does not 17 comply with the provisions of section 603-B may not 18 retroactively deny reimbursement or attempt in any manner to 19 retroactively collect reimbursement already paid to a health 20 care provider. 21 § 605-B. Fraudulent or improperly coded information. 22 (a) Reasons for denial.--The provisions of section 603-B do 23 not apply if an insurer retroactively denies reimbursement to a 24 health care provider because: 25 (1) the information submitted to the insurer was 26 fraudulent; 27 (2) the information submitted to the insurer was 28 improperly coded and the insurer has provided to the health 29 care provider sufficient information regarding the coding 30 guidelines used by the insurer at least 30 days prior to the 20070H1000B1996 - 4 -
1 date the services subject to the retroactive denial were 2 rendered; or 3 (3) the claim submitted to the insurer was a duplicate 4 claim. 5 (b) Improper coding.--Information submitted to the insurer 6 may be considered to be improperly coded under subsection (a)(2) 7 if the information submitted to the insurer by the health care 8 provider: 9 (1) uses codes that do not conform with the coding 10 guidelines used by the carrier applicable as of the date the 11 service or services were rendered; or 12 (2) does not otherwise conform with the contractual 13 obligations of the health care provider to the insurer 14 applicable as of the date the service or services were 15 rendered. 16 § 606-B. Coordination of benefits. 17 If an insurer retroactively denies reimbursement for services 18 as a result of coordination of benefits under provisions of 19 section 605-B(a), the health care provider shall have six months 20 from the date of the denial, unless an insurer permits a longer 21 time period, to submit a claim for reimbursement for the service 22 to the insurer, the medical assistance program or Medicare 23 program responsible for payment. 24 Section 2. The act is amended by adding a section to read: 25 Section 2116.1. Mental Health Services.--If (A) EXCEPT AS <-- 26 SET FORTH IN SUBSECTION (B), IF an enrollee has obtained a 27 referral or other authorization through utilization review from 28 a managed care plan or a licensed insurer to receive outpatient 29 mental health care services from a health care provider or 30 specialist, such referral or other authorization shall 20070H1000B1996 - 5 -
1 constitute a standing referral for any subsequent outpatient 2 mental health care services provided by any health care provider 3 or specialist until the mental health care service for which the 4 referral or authorization was approved has reached its 5 conclusion. 6 (B) THIS SECTION SHALL NOT APPLY TO A MANAGED CARE PLAN OR A <-- 7 LICENSED INSURER PROVIDING OUTPATIENT MENTAL HEALTH SERVICES OF 8 MEDICAL ASSISTANCE UNDER ARTICLE IV(F) OF THE ACT OF JUNE 13, 9 1967 (P.L.31, NO.21), KNOWN AS THE "PUBLIC WELFARE CODE." 10 Section 3. Section 2121(b) of the act, added June 17, 1998 11 (P.L.464, No.68), is amended to read: 12 Section 2121. Procedures.--* * * 13 (b) The department shall establish credentialing standards 14 for managed care plans. The department may adopt nationally 15 recognized accrediting standards to establish the credentialing 16 standards for managed care plans. With respect to outpatient 17 behavioral health services, the managed care plan or licensed 18 insurer shall inform credentialing applicants of a decision 19 within ninety (90) days after the complete application has been 20 submitted. 21 * * * 22 Section 4. This act shall take effect in 60 days. C12L40VDL/20070H1000B1996 - 6 -