PRINTER'S NO. 3402
No. 2348 Session of 2008
INTRODUCED BY EACHUS, DeLUCA, CARROLL, COHEN, COSTA, CURRY, DePASQUALE, DERMODY, DeWEESE, D. EVANS, FRANKEL, KORTZ, KOTIK, KULA, MANDERINO, McCALL, MUNDY, PARKER, PASHINSKI, SIPTROTH, SURRA, WHEATLEY AND YUDICHAK, MARCH 12, 2008
REFERRED TO COMMITTEE ON INSURANCE, MARCH 12, 2008
AN ACT 1 Amending the act of March 20, 2002 (P.L.154, No.13), entitled 2 "An act reforming the law on medical professional liability; 3 providing for patient safety and reporting; establishing the 4 Patient Safety Authority and the Patient Safety Trust Fund; 5 abrogating regulations; providing for medical professional 6 liability informed consent, damages, expert qualifications, 7 limitations of actions and medical records; establishing the 8 Interbranch Commission on Venue; providing for medical 9 professional liability insurance; establishing the Medical 10 Care Availability and Reduction of Error Fund; providing for 11 medical professional liability claims; establishing the Joint 12 Underwriting Association; regulating medical professional 13 liability insurance; providing for medical licensure 14 regulation; providing for administration; imposing penalties; 15 and making repeals," further providing for medical 16 professional liability insurance, for the Medical Care 17 Availability and Reduction of Error Fund and for actuarial 18 data; establishing the Pennsylvania Access to Basic Care (PA 19 ABC) Program Fund and the Continuing Access with Relief for 20 Employers (CARE) Fund; further defining "health care 21 provider"; further providing for the Health Care Provider 22 Retention Program; establishing the Supplemental Assistance 23 and Funding Account; further providing for expiration of the 24 Health Care Provider Retention Program; establishing the 25 Pennsylvania Access to Basic Care (PA ABC) Program; providing 26 for Continuing Access with Relief for Employers (CARE) 27 Grants, for health care coverage for certain adults, 28 individuals, employees and employers and for expiration of 29 certain sections; and repealing provisions of the Tobacco 30 Settlement Act. 31 The General Assembly of the Commonwealth of Pennsylvania
1 hereby enacts as follows:
2 Section 1. Section 711(d) and (g) of the act of March 20,
3 2002 (P.L.154, No.13), known as the Medical Care Availability
4 and Reduction of Error (Mcare) Act, are amended to read:
5 Section 711. Medical professional liability insurance.
6 * * *
7 (d) Basic coverage limits.--A health care provider shall
8 insure or self-insure medical professional liability in
9 accordance with the following:
10 (1) For policies issued or renewed in the calendar year
11 2002, the basic insurance coverage shall be:
12 (i) $500,000 per occurrence or claim and $1,500,000
13 per annual aggregate for a health care provider who
14 conducts more than 50% of its health care business or
15 practice within this Commonwealth and that is not a
16 hospital.
17 (ii) $500,000 per occurrence or claim and $1,500,000
18 per annual aggregate for a health care provider who
19 conducts 50% or less of its health care business or
20 practice within this Commonwealth.
21 (iii) $500,000 per occurrence or claim and
22 $2,500,000 per annual aggregate for a hospital.
23 (2) For policies issued or renewed in the calendar years
24 2003[, 2004 and 2005] through 2008, the basic insurance
25 coverage shall be:
26 (i) $500,000 per occurrence or claim and $1,500,000
27 per annual aggregate for a participating health care
28 provider that is not a hospital.
29 (ii) $1,000,000 per occurrence or claim and
30 $3,000,000 per annual aggregate for a nonparticipating
20080H2348B3402 - 2 -
1 health care provider. 2 (iii) $500,000 per occurrence or claim and 3 $2,500,000 per annual aggregate for a hospital. 4 [(3) Unless the commissioner finds pursuant to section 5 745(a) that additional basic insurance coverage capacity is 6 not available, for policies issued or renewed in calendar 7 year 2006 and each year thereafter subject to paragraph (4), 8 the basic insurance coverage shall be: 9 (i) $750,000 per occurrence or claim and $2,250,000 10 per annual aggregate for a participating health care 11 provider that is not a hospital. 12 (ii) $1,000,000 per occurrence or claim and 13 $3,000,000 per annual aggregate for a nonparticipating 14 health care provider. 15 (iii) $750,000 per occurrence or claim and 16 $3,750,000 per annual aggregate for a hospital. 17 If the commissioner finds pursuant to section 745(a) that 18 additional basic insurance coverage capacity is not 19 available, the basic insurance coverage requirements shall 20 remain at the level required by paragraph (2); and the 21 commissioner shall conduct a study every two years until the 22 commissioner finds that additional basic insurance coverage 23 capacity is available, at which time the commissioner shall 24 increase the required basic insurance coverage in accordance 25 with this paragraph. 26 (4) Unless the commissioner finds pursuant to section 27 745(b) that additional basic insurance coverage capacity is 28 not available, for policies issued or renewed three years 29 after the increase in coverage limits required by paragraph 30 (3) and for each year thereafter, the basic insurance 20080H2348B3402 - 3 -
1 coverage shall be: 2 (i) $1,000,000 per occurrence or claim and 3 $3,000,000 per annual aggregate for a participating 4 health care provider that is not a hospital. 5 (ii) $1,000,000 per occurrence or claim and 6 $3,000,000 per annual aggregate for a nonparticipating 7 health care provider. 8 (iii) $1,000,000 per occurrence or claim and 9 $4,500,000 per annual aggregate for a hospital. 10 If the commissioner finds pursuant to section 745(b) that 11 additional basic insurance coverage capacity is not 12 available, the basic insurance coverage requirements shall 13 remain at the level required by paragraph (3); and the 14 commissioner shall conduct a study every two years until the 15 commissioner finds that additional basic insurance coverage 16 capacity is available, at which time the commissioner shall 17 increase the required basic insurance coverage in accordance 18 with this paragraph.] 19 (5) For policies issued or renewed in calendar year 20 2009, the basic insurance coverage shall be: 21 (i) $550,000 per occurrence or claim and $1,650,000 22 per annual aggregate for a participating health care 23 provider that is not a hospital. 24 (ii) $1,000,000 per occurrence or claim and 25 $3,000,000 per annual aggregate for a nonparticipating 26 health care provider. 27 (iii) $550,000 per occurrence or claim and 28 $2,700,000 per annual aggregate for a hospital. 29 (6) For policies issued or renewed in calendar years 30 2010 and thereafter: 20080H2348B3402 - 4 -
1 (i) The basic insurance coverage for a participating 2 health care provider that is not a hospital shall 3 increase by $50,000 per occurrence or claim and $150,000 4 per annual aggregate per year until such time as the 5 basic insurance coverage required shall be $1,000,000 per 6 occurrence or claim and $3,000,000 per annual aggregate. 7 (ii) The basic insurance coverage for a 8 nonparticipating health care provider shall be $1,000,000 9 per occurrence or claim and $3,000,000 per annual 10 aggregate. 11 (iii) The basic insurance coverage for a hospital 12 shall increase by $50,000 per occurrence or claim and 13 $200,000 per annual aggregate until such time as the 14 basic insurance coverage requirement shall be $1,000,000 15 per occurrence or claim and $4,500,000 per annual 16 aggregate per year. 17 (7) Basic insurance coverage amounts shall be exclusive 18 of a deductible or any other contribution from the health 19 care provider. 20 * * * 21 (g) Basic insurance liability.-- 22 (1) An insurer providing medical professional liability 23 insurance shall not be liable for payment of a claim against 24 a health care provider for any loss or damages awarded in a 25 medical professional liability action in excess of the basic 26 insurance coverage required by subsection (d) unless the 27 health care provider's medical professional liability 28 insurance policy or self-insurance plan provides for a higher 29 limit. 30 (2) If a claim exceeds the limits of a participating 20080H2348B3402 - 5 -
1 health care provider's basic insurance coverage or self- 2 insurance plan, the fund shall be responsible for payment of 3 the claim against the participating health care provider up 4 to the fund liability limits. The fund shall not be 5 responsible if a claimant has waived collection of any 6 portion of the applicable basic insurance coverage limit. 7 (3) If the health care provider has more than one basic 8 insurance coverage policy with more than one insurer 9 applicable to a claim, the fund shall be liable when the 10 policy with the highest limit has been tendered to the fund. 11 * * * 12 Section 2. Section 712(c), (d), (e), (i), (j) and (m) of the 13 act are amended and the section is amended by adding a 14 subsection to read: 15 Section 712. Medical Care Availability and Reduction of Error 16 Fund. 17 * * * 18 (c) Fund liability limits.-- 19 (1) For calendar year 2002, the limit of liability of 20 the fund created in section 701(d) of the former Health Care 21 Services Malpractice Act for each health care provider that 22 conducts more than 50% of its health care business or 23 practice within this Commonwealth and for each hospital shall 24 be $700,000 for each occurrence and $2,100,000 per annual 25 aggregate. 26 (2) The limit of liability of the fund for each 27 participating health care provider shall be [as follows: 28 (i) For] for calendar year 2003 and each year 29 thereafter, the limit of liability of the fund shall be 30 $500,000 for each occurrence and $1,500,000 per annual 20080H2348B3402 - 6 -
1 aggregate. 2 [(ii) If the basic insurance coverage requirement is 3 increased in accordance with section 711(d)(3) and, 4 notwithstanding subparagraph (i), for each calendar year 5 following the increase in the basic insurance coverage 6 requirement, the limit of liability of the fund shall be 7 $250,000 for each occurrence and $750,000 per annual 8 aggregate. 9 (iii) If the basic insurance coverage requirement is 10 increased in accordance with section 711(d)(4) and, 11 notwithstanding subparagraphs (i) and (ii), for each 12 calendar year following the increase in the basic 13 insurance coverage requirement, the limit of liability of 14 the fund shall be zero.] 15 (3) The limit of liability of the fund for each 16 participating health care provider shall be: 17 (i) For calendar years 2003 through 2008, $500,000 18 for each occurrence and $1,500,000 per annual aggregate. 19 (ii) For calendar year 2009, $450,000 per occurrence 20 or claim and $1,350,000 per annual aggregate. 21 (iii) For calendar years 2010 and thereafter, the 22 limit of liability shall decrease by $50,000 per 23 occurrence or claim and $150,000 per annual aggregate per 24 year until such time as the fund limit of liability shall 25 be zero dollars per occurrence or claim and zero dollars 26 per annual aggregate. 27 (d) Assessments.-- 28 (1) For calendar [year 2003 and for each year 29 thereafter,] years 2003 through 2017, the fund shall be 30 funded by an assessment on each participating health care 20080H2348B3402 - 7 -
1 provider. Assessments shall be levied by the department on or 2 after January 1 of each year. The assessment shall be based 3 on the prevailing primary premium for each participating 4 health care provider and shall, in the aggregate, produce an 5 amount sufficient to do all of the following: 6 (i) Reimburse the fund for the payment of reported 7 claims which became final during the preceding claims 8 period. 9 (ii) Pay expenses of the fund incurred during the 10 preceding claims period. 11 (iii) Pay principal and interest on moneys 12 transferred into the fund in accordance with section 13 713(c). 14 (iv) Provide a reserve that shall be 10% of the sum 15 of subparagraphs (i), (ii) and (iii). 16 (2) The department shall notify all basic insurance 17 coverage insurers and self-insured participating health care 18 providers of the assessment by November 1 for the succeeding 19 calendar year. 20 (3) Any appeal of the assessment shall be filed with the 21 department. 22 [(e) Discount on surcharges and assessments.-- 23 (1) For calendar year 2002, the department shall 24 discount the aggregate surcharge imposed under section 25 701(e)(1) of the Health Care Services Malpractice Act by 5% 26 of the aggregate surcharge imposed under that section for 27 calendar year 2001 in accordance with the following: 28 (i) Fifty percent of the aggregate discount shall be 29 granted equally to hospitals and to participating health 30 care providers that were surcharged as members of one of 20080H2348B3402 - 8 -
1 the four highest rate classes of the prevailing primary 2 premium. 3 (ii) Notwithstanding subparagraph (i), 50% of the 4 aggregate discount shall be granted equally to all 5 participating health care providers. 6 (iii) The department shall issue a credit to a 7 participating health care provider who, prior to the 8 effective date of this section, has paid the surcharge 9 imposed under section 701(e)(1) of the former Health Care 10 Services Malpractice Act for calendar year 2002 prior to 11 the effective date of this section. 12 (2) For calendar years 2003 and 2004, the department 13 shall discount the aggregate assessment imposed under 14 subsection (d) for each calendar year by 10% of the aggregate 15 surcharge imposed under section 701(e)(1) of the former 16 Health Care Services Malpractice Act for calendar year 2001 17 in accordance with the following: 18 (i) Fifty percent of the aggregate discount shall be 19 granted equally to hospitals and to participating health 20 care providers that were assessed as members of one of 21 the four highest rate classes of the prevailing primary 22 premium. 23 (ii) Notwithstanding subparagraph (i), 50% of the 24 aggregate discount shall be granted equally to all 25 participating health care providers. 26 (3) For calendar years 2005 and thereafter, if the basic 27 insurance coverage requirement is increased in accordance 28 with section 711(d)(3) or (4), the department may discount 29 the aggregate assessment imposed under subsection (d) by an 30 amount not to exceed the aggregate sum to be deposited in the 20080H2348B3402 - 9 -
1 fund in accordance with subsection (m).] 2 * * * 3 (i) Change in basic insurance coverage.--If a participating 4 health care provider changes the term of its medical 5 professional liability insurance coverage, the assessment shall 6 be calculated on an annual basis and shall reflect the 7 assessment percentages in effect for the period over which the 8 policies are in effect. A policy period less than 12 months may 9 result in a prorated reduction in the Mcare annual aggregate 10 limit. 11 (j) Payment of claims.--Claims which became final during the 12 preceding claims period shall be paid on [or before] December 31 13 or the last business day of the year following the August 31 on 14 which they became final. 15 * * * 16 (m) Supplemental funding.--Notwithstanding the provisions of 17 75 Pa.C.S. § 6506(b) (relating to surcharge) to the contrary, 18 beginning January 1, 2004, [and for a period of nine calendar 19 years thereafter,] through June 30, 2018, all surcharges levied 20 and collected under 75 Pa.C.S. § 6506(a) by any division of the 21 unified judicial system shall be remitted to the Commonwealth 22 for deposit in the Medical Care Availability and [Restriction] 23 Reduction of Error Fund. These funds shall be used to reduce 24 surcharges and assessments in accordance with subsection (e). 25 Beginning [January 1, 2014] July 1, 2018, and each year 26 thereafter, the surcharges levied and collected under 75 Pa.C.S. 27 § 6506(a) shall be deposited into the [General Fund.] Health 28 Care Provider Retention Account. 29 * * * 30 (o) Coverage of claims in relation to payment of certain 20080H2348B3402 - 10 -
1 late assessments.-- 2 (1) All basic insurance coverage insurers, self-insured 3 participating health care providers and risk retention groups 4 shall bill, collect and remit the assessment to the 5 department within 60 days of the inception or renewal date of 6 the primary professional liability policy. 7 (2) All basic insurance coverage insurers, self-insured 8 participating health care providers and risk retention groups 9 shall be subject to the following: 10 (i) For assessments remitted to the department in 11 excess of 60 days after the inception or renewal date of 12 the primary policy, the basic insurance coverage insurer, 13 self-insured participating health care provider or risk 14 retention group shall pay to the department a penalty 15 equal to 10% per annum of each untimely assessment 16 accruing from the 61st day after the inception or renewal 17 date of the primary policy until the remittance is 18 received by the department. 19 (ii) In addition to the provisions of subparagraph 20 (i), if the department finds that there has been a 21 pattern or practice of not complying with this section, 22 the basic insurance coverage insurer, self-insured 23 participating health care provider or risk retention 24 group shall be subject to the penalties and process set 25 forth in the act of July 22, 1974 (P.L.589, No.205), 26 known as the Unfair Insurance Practices Act. 27 (iii) If the basic insurance coverage insurer, self- 28 insurer or risk retention group receives the assessment 29 from a health care provider, professional corporation or 30 professional association with less than 30 days to make 20080H2348B3402 - 11 -
1 the remittance timely as provided under this subsection, 2 the basic insurance coverage insurer, self-insurer or 3 risk retention group remittance period shall be extended 4 by 30 days from the date of receipt upon providing 5 reasonable evidence to the department regarding the date 6 of receipt and shall not be subject to the penalties 7 provided for under this section. 8 (iv) If the basic insurance coverage insurer, self- 9 insurer or risk retention group receives an assessment 10 after 60 days of the inception or renewal date of the 11 primary professional liability policy and remits the 12 assessment within 30 days from the date of receipt, the 13 basic insurance coverage insurer, self-insurer or risk 14 retention group shall not be subject to the penalties 15 provided for under this section. Remittances to the 16 department beyond the 30-day period shall be subject to 17 the penalties provided for under this section. 18 (v) (A) A health care provider or professional 19 corporation, professional association or partnership 20 shall be provided coverage from the inception or 21 renewal date of the primary professional liability 22 policy if the billed assessment is paid to the basic 23 insurance coverage insurer, self-insurer or risk 24 retention group within 60 days of the inception or 25 renewal date of the primary professional liability 26 policy. 27 (B) A health care provider or professional 28 corporation, professional association or partnership 29 that fails to pay the billed assessment to its basic 30 insurance coverage insurer, self-insurer or risk 20080H2348B3402 - 12 -
1 retention group within 60 days of policy inception or 2 renewal and before receiving notice of a claim shall 3 not have coverage for that claim. 4 (C) If a health care provider or professional 5 corporation, professional association or partnership 6 is billed by the basic insurance coverage insurer, 7 self-insurer or risk retention group later than 30 8 days after the policy inception or renewal date and 9 the health care provider or professional corporation, 10 professional association or partnership pays the 11 basic insurance coverage insurer, self-insurer or 12 risk retention group within 30 days from the date of 13 receipt of the bill and the basic insurance coverage 14 insurer, self-insurer or risk retention group carrier 15 remits the assessment to the department within 30 16 days from the date of receipt, the health care 17 provider shall be provided coverage as of the 18 inception or renewal date of the primary policy. 19 Coverage shall also be provided to the health care 20 provider or professional corporation, professional 21 association or partnership for all professional 22 liability claims made after payment of the 23 assessment. 24 (vi) Except as to provisions in conflict with this 25 section, nothing in this section shall be construed to 26 affect existing regulations saved by section 5107(a), and 27 all existing regulations shall remain in full force and 28 effect. 29 Section 3. Section 745 of the act is repealed: 30 [Section 745. Actuarial data. 20080H2348B3402 - 13 -
1 (a) Initial study.--The following shall apply: 2 (1) No later than April 1, 2005, each insurer providing 3 medical professional liability insurance in this Commonwealth 4 shall file loss data as required by the commissioner. For 5 failure to comply, the commissioner shall impose an 6 administrative penalty of $1,000 for every day that this data 7 is not provided in accordance with this paragraph. 8 (2) By July 1, 2005, the commissioner shall conduct a 9 study regarding the availability of additional basic 10 insurance coverage capacity. The study shall include an 11 estimate of the total change in medical professional 12 liability insurance loss-cost resulting from implementation 13 of this act prepared by an independent actuary. The fee for 14 the independent actuary shall be borne by the fund. In 15 developing the estimate, the independent actuary shall 16 consider all of the following: 17 (i) The most recent accident year and ratemaking 18 data available. 19 (ii) Any other relevant factors within or outside 20 this Commonwealth in accordance with sound actuarial 21 principles. 22 (b) Additional study.--The following shall apply: 23 (1) Three years following the increase of the basic 24 insurance coverage requirement in accordance with section 25 711(d)(3), each insurer providing medical professional 26 liability insurance in this Commonwealth shall file loss data 27 with the commissioner upon request. For failure to comply, 28 the commissioner shall impose an administrative penalty of 29 $1,000 for every day that this data is not provided in 30 accordance with this paragraph. 20080H2348B3402 - 14 -
1 (2) Three months following the request made under 2 paragraph (1), the commissioner shall conduct a study 3 regarding the availability of additional basic insurance 4 coverage capacity. The study shall include an estimate of the 5 total change in medical professional liability insurance 6 loss-cost resulting from implementation of this act prepared 7 by an independent actuary. The fee for the independent 8 actuary shall be borne by the fund. In developing the 9 estimate, the independent actuary shall consider all of the 10 following: 11 (i) The most recent accident year and ratemaking 12 data available. 13 (ii) Any other relevant factors within or outside 14 this Commonwealth in accordance with sound actuarial 15 principles.] 16 Section 4. Chapter 7 of the act is amended by adding 17 subchapters to read: 18 SUBCHAPTER E 19 PENNSYLVANIA ACCESS TO BASIC CARE 20 (PA ABC) PROGRAM FUND 21 Section 751. Establishment. 22 There is established within the State Treasury a special fund 23 to be known as the Pennsylvania Access to Basic Care (PA ABC) 24 Program Fund. 25 Section 752. Allocation. 26 Money in the Pennsylvania Access to Basic Care (PA ABC) 27 Program Fund is hereby appropriated upon approval of the 28 Governor for health care coverage and services under Chapter 13. 29 SUBCHAPTER F 30 CONTINUING ACCESS WITH RELIEF FOR 20080H2348B3402 - 15 -
1 EMPLOYERS (CARE) FUND 2 Section 761. Establishment. 3 There is established within the State Treasury a special fund 4 to be known as the Continuing Access with Relief for Employers 5 (CARE) Fund. 6 Section 762. Allocation. 7 Money in the Continuing Access with Relief for Employers 8 (CARE) Fund is hereby appropriated on a continuing basis to the 9 Department of Community and Economic Development and shall be 10 dedicated to assisting certain employers that currently offer 11 and maintain health care coverage for their employees in 12 compliance with the requirements under section 1308. 13 Section 5. The definition of "health care provider" in 14 section 1101 of the act, added December 22, 2005 (P.L.458, 15 No.88), is amended to read: 16 Section 1101. Definitions. 17 The following words and phrases when used in this chapter 18 shall have the meanings given to them in this section unless the 19 context clearly indicates otherwise: 20 * * * 21 "Health care provider." [An individual who is all of the 22 following: 23 (1) A physician, licensed podiatrist, certified nurse 24 midwife or nursing home. 25 (2) A participating health care provider as defined in 26 section 702.] Any of the following: 27 (1) A nursing home or birth center that is a 28 participating health care provider as defined in section 702. 29 (2) An individual who is a physician, licensed 30 podiatrist or certified nurse midwife. 20080H2348B3402 - 16 -
1 * * * 2 Section 6. Section 1102 of the act, amended October 27, 2006 3 (P.L.1198, No.128), is amended to read: 4 Section 1102. Abatement program. 5 (a) Establishment.--There is hereby established within the 6 Insurance Department a program to be known as the Health Care 7 Provider Retention Program. The Insurance Department, in 8 conjunction with the Department of Public Welfare, shall 9 administer the program. The program shall provide assistance in 10 the form of assessment abatements to health care providers for 11 calendar years [2003, 2004, 2005, 2006 and 2007] beginning 2003 12 and ending 2017, except that licensed podiatrists shall not be 13 eligible for calendar years 2003 and 2004, and nursing homes 14 shall not be eligible for calendar years 2003, 2004 and 2005. 15 (b) Other [abatement.--] abatements.-- 16 (1) Emergency physicians not employed full time by a 17 trauma center or working under an exclusive contract with a 18 trauma center shall retain eligibility for an abatement 19 pursuant to section 1104(b)(2) for calendar years 2003, 2004, 20 2005 and 2006. Commencing in calendar year 2007, these 21 emergency physicians shall be eligible for an abatement 22 pursuant to section 1104(b)(1). 23 (2) Birth centers shall retain eligibility for abatement 24 pursuant to section 1104(b)(2) for calendar years 2003, 2004, 25 2005, 2006 and 2007. Commencing in calendar year 2008, birth 26 centers shall be eligible for abatement pursuant to section 27 1104(b)(1). 28 Section 7. Section 1103 of the act, added December 22, 2005 29 (P.L.458, No.88), is amended by adding paragraphs to read: 30 Section 1103. Eligibility. 20080H2348B3402 - 17 -
1 A health care provider shall not be eligible for [assessment] 2 abatement under the program if any of the following apply: 3 * * * 4 (6) The health care provider has refused to be an active 5 provider in the Pennsylvania Access to Basic Care (PA ABC) 6 Program in the health care provider's service area. 7 (7) The active health care provider is an active 8 provider in the Pennsylvania Access to Basic Care (PA ABC) 9 Program and places restrictions on benefits for patients 10 enrolled in that program. 11 (8) The health care provider has refused to be an active 12 provider in the children's health insurance program 13 established under Article XXIII of the act of May 17, 1921 14 (P.L.682, No.284), known as The Insurance Company Law of 15 1921. 16 (9) The active health care provider is an active 17 provider in the children's health insurance program and 18 places restrictions on benefits for patients enrolled in the 19 children's health insurance program. 20 (10) The Department of Revenue has determined that the 21 health care provider has not filed all required State tax 22 reports and returns for all applicable taxable years or has 23 not paid any balance of State tax due as determined at 24 settlement, assessment or determination by the Department of 25 Revenue that are not subject to a timely perfected 26 administrative or judicial appeal or subject to a duly 27 authorized deferred payment plan as of the date of 28 application. Notwithstanding the provisions of section 353(f) 29 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax 30 Reform Code of 1971, the Department of Revenue shall supply 20080H2348B3402 - 18 -
1 the Insurance Department with information concerning the 2 status of delinquent taxes owed by a health care provider for 3 purposes of this paragraph. 4 (11) (i) The health care provider has not attended at 5 least one Commonwealth-sponsored independent drug 6 information service session, either in person or by 7 videoconference. 8 (ii) This paragraph does not apply if the 9 Commonwealth has not made a Commonwealth-sponsored 10 independent drug information service session available to 11 the health care provider prior to the date that the 12 health care provider's application is submitted under 13 section 1104. 14 Section 8. Section 1104(b) of the act, amended December 22, 15 2005 (P.L.458, No.88), is amended to read: 16 Section 1104. Procedure. 17 * * * 18 (b) Review.--Upon receipt of a completed application, the 19 Insurance Department shall review the applicant's information 20 and grant the applicable abatement of the assessment for the 21 previous calendar year specified on the application in 22 accordance with all of the following: 23 (1) The Insurance Department shall notify the Department 24 of Public Welfare that the applicant has self-certified as 25 eligible and was not disqualified for an abatement under 26 section 1103(6), (7), (8), (9), (10) and (11) for a 100% 27 abatement of the imposed assessment if the health care 28 provider was assessed under section 712(d) as: 29 (i) a physician who is assessed as a member of one 30 of the four highest rate classes of the prevailing 20080H2348B3402 - 19 -
1 primary premium; 2 (ii) an emergency physician; 3 (iii) a physician who routinely provides obstetrical 4 services in rural areas as designated by the Insurance 5 Department; [or] 6 (iv) a certified nurse midwife[.]; or 7 (v) a birth center. 8 (2) The Insurance Department shall notify the Department 9 of Public Welfare that the applicant has self-certified as 10 eligible and was not disqualified for an abatement under 11 section 1103(6), (7), (8), (9), (10) and (11) for a 50% 12 abatement of the imposed assessment in calendar years 2008 13 through 2012, a 56.5% abatement in calendar year 2013, a 14 63.5% abatement in calendar year 2014, a 70% abatement in 15 calendar year 2015, a 78% abatement in calendar year 2016, an 16 88% abatement in calendar year 2017 and a 100% abatement in 17 calendar year 2018 if the health care provider was assessed 18 under section 712(d) as: 19 (i) a physician but is a physician who does not 20 qualify for abatement under paragraph (1); 21 (ii) a licensed podiatrist; [or] 22 (iii) a nursing home[.]; or 23 (iv) a birth center. 24 * * * 25 Section 9. Section 1112(c) and (e) of the act, added 26 December 22, 2005 (P.L.458, No.88), are amended and the section 27 is amended by adding subsections to read: 28 Section 1112. Health Care Provider Retention Account. 29 * * * 30 (a.1) Supplemental Assistance and Funding Account.--There is 20080H2348B3402 - 20 -
1 established within the Health Care Provider Retention Account a 2 special account to be known as the Supplemental Assistance and 3 Funding Account. Funds in this account shall be used annually to 4 supplement the funding of the Pennsylvania Access to Basic Care 5 (PA ABC) Program. 6 * * * 7 (c) Transfers from account.-- 8 (1) The Secretary of the Budget may annually transfer 9 from the account to the Medical Care Availability and 10 Reduction of Error (Mcare) Fund an amount up to the aggregate 11 amount of abatements granted by the Insurance Department 12 under section 1104(b). 13 (2) In addition to the transfers specified in paragraph 14 (1), the Secretary of the Budget may also transfer funds from 15 the account to the Medical Care Availability and Reduction of 16 Error (Mcare) Fund for the purpose of paying claims and 17 operating expenses coming due after January 1, 2018. 18 (3) The Secretary of the Budget may transfer funds from 19 the account to the Pennsylvania Access to Basic Care (PA ABC) 20 Program Fund. 21 (4) The Secretary of the Budget shall annually transfer 22 from the account to the Continuing Access Relief for 23 Employers (CARE) Fund an amount at least equal to the amount 24 deposited under section 712(m). 25 (c.1) Transfers from the Supplemental Assistance and Funding 26 Account.--The Secretary of the Budget shall annually transfer 27 funds from the Supplemental Assistance and Funding Account 28 established under subsection (a.1) to the Pennsylvania Access to 29 Basic Care (PA ABC) Program Fund. 30 * * * 20080H2348B3402 - 21 -
1 [(e) Administration assistance.--The Insurance Department 2 shall provide assistance to the Department of Public Welfare in 3 administering the account.] 4 Section 10. Section 1115 of the act, amended October 27, 5 2006 (P.L.1198, No.128), is amended to read: 6 Section 1115. Expiration. 7 The Health Care Provider Retention Program established under 8 this chapter shall expire December 31, [2008] 2018. 9 Section 11. The act is amended by adding a chapter to read: 10 CHAPTER 13 11 PENNSYLVANIA ACCESS TO BASIC CARE (PA ABC) PROGRAM 12 Section 1301. Scope. 13 This chapter relates to offering health care coverage to 14 eligible adults, individuals, employees and employers. 15 Section 1302. Definitions. 16 The following words and phrases when used in this chapter 17 shall have the meanings given to them in this section unless the 18 context clearly indicates otherwise: 19 "AdultBasic Program." The adult basic coverage insurance 20 program established under section 1303 of the act of June 26, 21 2001 (P.L.755, No.77), known as the Tobacco Settlement Act. 22 "Average annual wage." The total annual wages paid by an 23 employer divided by the number of the employer's full-time 24 equivalent employees. 25 "Behavioral health services." Mental health or substance 26 abuse services. 27 "Children's health insurance program." The children's health 28 care program established under Article XXIII of the act of May 29 17, 1921 (P.L.682, No.284), known as The Insurance Company Law 30 of 1921. 20080H2348B3402 - 22 -
1 "Chronic disease management program." A program that allows 2 a patient, with the support of a health care team, to play an 3 active role in the patient's care and assures that there is an 4 infrastructure to ensure compliance with established practice 5 guidelines. 6 "Community Health Reinvestment Agreement." The Agreement on 7 Community Health Reinvestment entered into February 2, 2005, by 8 the Insurance Department and Capital Blue Cross, Highmark Inc., 9 Hospital Service Association of Northeastern Pennsylvania and 10 Independence Blue Cross and published in the Pennsylvania 11 Bulletin at 35 Pa.B. 4155. 12 "Contractor." An insurer awarded a contract to provide 13 health care services under this chapter. The term includes an 14 entity and its subsidiary which is established under 40 Pa.C.S. 15 Ch. 61 (relating to hospital plan corporations) or 63 (relating 16 to professional health services plan corporations), the act of 17 May 17, 1921 (P.L.682, No.284), known as The Insurance Company 18 Law of 1921, or the act of December 29, 1972 (P.L.1701, No.364), 19 known as the Health Maintenance Organization Act. 20 "Department." The Insurance Department of the Commonwealth. 21 "Eligible adult." An individual who meets all of the 22 following: 23 (1) Is at least 19 years of age but not more than 64 24 years of age. 25 (2) Legally resides within the United States. 26 (3) Has been domiciled in this Commonwealth for at least 27 90 days prior to application to the program. 28 (4) Is ineligible to receive continuous eligibility 29 coverage under Title XIX or XXI of the Social Security Act 30 (49 Stat. 620, 42 U.S.C. § 301 et seq.), except for benefits 20080H2348B3402 - 23 -
1 authorized under a waiver granted by the United States 2 Department of Health and Human Services to implement the 3 Pennsylvania Access to Basic Care (PA ABC) Program. 4 (5) Is ineligible for medical assistance or Medicare. 5 (6) May currently be enrolled in the AdultBasic Program 6 or is on the waiting list for that program on the effective 7 date of this section. 8 (7) Subject to the provisions of section 1305, has a 9 household income that is no greater than 300% of the Federal 10 poverty level at the time of application. 11 (8) Has not been covered by any health insurance plan or 12 program for at least 180 days immediately preceding the date 13 of application, except that the 180-day period shall not 14 apply to an eligible adult who meets one of the following: 15 (i) is eligible to receive benefits under the act of 16 December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), 17 known as the Unemployment Compensation Law; 18 (ii) was covered under a health insurance plan or 19 program provided by an employer, but at the time of 20 application is no longer covered because of a change in 21 the individual's employment status and is ineligible to 22 receive benefits under the Unemployment Compensation Law; 23 (iii) lost coverage as a result of divorce or 24 separation from a covered individual, the death of a 25 covered individual or a change in employment status of a 26 covered individual; or 27 (iv) is transferring from another government- 28 subsidized health insurance program, including a transfer 29 that occurs as a result of failure to meet income 30 eligibility requirements. 20080H2348B3402 - 24 -
1 "Eligible employee." An eligible adult or an employee who 2 meets all the requirements of an eligible adult or employee at 3 the time the eligible employer makes application to the program. 4 "Eligible employer." An employer that meets all of the 5 following: 6 (1) Has at least two but not more than 50 full-time 7 equivalent employees. 8 (2) Has not offered health care coverage through any 9 plan or program during the 180 days immediately preceding the 10 date of application for participation in the Pennsylvania 11 Access to Basic Care (PA ABC) Program. 12 (3) Has not provided remuneration in any form to an 13 employee on payroll for the purchase of health care coverage 14 during the 180 days immediately preceding the date on which 15 the employer applies for participation in the program. 16 (4) Pays an average annual wage that is less than 300% 17 of the Federal poverty level for an individual. 18 "Employee." An individual who is employed for more than 20 19 hours in a single week and from whose wages an employer is 20 required under the Internal Revenue Code of 1986 (Public Law 99- 21 514, 26 U.S.C. § 1 et seq.) to withhold Federal income tax. 22 "Employer." The term shall include: 23 (1) Any of the following who or which employs two but 24 not more than 50 employees to perform services for 25 remuneration: 26 (i) an individual, partnership, association, 27 domestic or foreign corporation or other entity; 28 (ii) the legal representative, trustee in 29 bankruptcy, receiver or trustee of any individual, 30 partnership, association or corporation or other entity; 20080H2348B3402 - 25 -
1 or 2 (iii) the legal representative of a deceased 3 individual. 4 (2) An individual who is self-employed. 5 (3) The executive, legislative and judicial branches of 6 the Commonwealth and any one of its political subdivisions. 7 "Fund." The Pennsylvania Access to Basic Care (PA ABC) 8 Program Fund. 9 "Health benefit plan." An insurance coverage plan that 10 provides the benefits set forth under section 1313. The term 11 does not include any of the following: 12 (1) An accident-only policy. 13 (2) A credit-only policy. 14 (3) A long-term or disability income policy. 15 (4) A specified disease policy. 16 (5) A Medicare supplement policy. 17 (6) A Civilian Health and Medical Program of the 18 Uniformed Services (CHAMPUS) supplement policy. 19 (7) A fixed indemnity policy. 20 (8) A dental-only policy. 21 (9) A vision-only policy. 22 (10) A workers' compensation policy. 23 (11) An automobile medical payment policy pursuant to 75 24 Pa.C.S. (relating to vehicles). 25 (12) Such other similar policies providing for limited 26 benefits. 27 "Health care coverage." A health benefit plan or other form 28 of health care coverage that is approved by the Department of 29 Community and Economic Development in consultation with the 30 Insurance Department. The term does not include coverage under 20080H2348B3402 - 26 -
1 the PA ABC program. 2 "Health maintenance organization" or "HMO." An entity 3 organized and regulated under the act of December 29, 1972 4 (P.L.1701, No.364), known as the Health Maintenance Organization 5 Act. 6 "Health savings account." An account established by an 7 employer under section 1307 on behalf of an employee whose 8 income is greater than 200% of the Federal poverty level. 9 "Hospital." An institution that has an organized medical 10 staff engaged primarily in providing to inpatients, by or under 11 the supervision of physicians, diagnostic and therapeutic 12 services for the care of injured, disabled, pregnant, diseased 13 or sick or mentally ill persons. The term includes a facility 14 for the diagnosis and treatment of disorders within the scope of 15 specific medical specialties. The term does not include a 16 facility that cares exclusively for the mentally ill. 17 "Hospital plan corporation." A hospital plan corporation as 18 defined in 40 Pa.C.S. § 6101 (relating to definitions). 19 "Individual." A person who meets all the requirements of an 20 eligible adult but whose household income is greater than 300% 21 of the Federal poverty level. 22 "Insurer." A company or health insurance entity licensed in 23 this Commonwealth to issue an individual or group health, 24 sickness or accident policy or subscriber contract or 25 certificate or plan that provides medical or health care 26 coverage by a health care facility or licensed health care 27 provider and that is offered or governed under this act or any 28 of the following: 29 (1) The act of May 17, 1921 (P.L.682, No.284), known as 30 The Insurance Company Law of 1921. 20080H2348B3402 - 27 -
1 (2) The act of December 29, 1972 (P.L.1701, No.364), 2 known as the Health Maintenance Organization Act. 3 (3) The act of May 18, 1976 (P.L.123, No.54), known as 4 the Individual Accident and Sickness Insurance Minimum 5 Standards Act. 6 (4) 40 Pa.C.S. Ch. 61 (relating to hospital plan 7 corporations) or 63 (relating to professional health services 8 plan corporations). 9 "Medical assistance." The State program of medical 10 assistance established under the act of June 13, 1967 (P.L.31, 11 No.21), known as the Public Welfare Code. 12 "Medical loss ratio." The ratio of paid medical claim costs 13 to earned premiums. 14 "Medicare." The Federal program established under Title 15 XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1395 16 et seq.). 17 "Offeror." An insurer that submits a bid or proposal under 18 section 1311 in response to the department's procurement 19 solicitation. 20 "Preexisting condition." A disease or physical condition for 21 which medical advice or treatment has been received prior to the 22 effective date of coverage. 23 "Prescription drug." A controlled substance, other drug or 24 device for medication dispensed by order of an appropriately 25 licensed medical professional. 26 "Professional health services plan corporation." A not-for- 27 profit corporation operating under the provisions of 40 Pa.C.S. 28 Ch. 63 (relating to professional health services plan 29 corporations). 30 "Program." The Pennsylvania Access to Basic Care (PA ABC) 20080H2348B3402 - 28 -
1 Program established under this chapter. 2 "Qualifying health care coverage." A health benefit plan or 3 other form of health care coverage actuarially equivalent to the 4 benefits in section 1313 and approved by the Insurance 5 Department. 6 "Terminate." The term includes cancellation, nonrenewal and 7 rescission. 8 "Unemployment Compensation Law." The act of December 5, 1936 9 (2nd Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment 10 Compensation Law. 11 "Uninsured period." A continuous period of time of not less 12 than 180 consecutive days immediately preceding enrollment 13 application during which an adult has been without health care 14 coverage in accordance with the requirements of this chapter. 15 Section 1303. Establishment of program. 16 The Pennsylvania Access to Basic Care (PA ABC) Program is 17 established in the department. 18 Section 1304. Funding. 19 (a) Sources.--The following are the sources of money for the 20 program: 21 (1) Money received from the Supplemental Assistance and 22 Funding Account established under section 1112(a.1). 23 (2) Money received from the Federal Government or other 24 sources. 25 (3) Money required to be deposited pursuant to other 26 provisions of this chapter or any other law of this 27 Commonwealth. 28 (4) Upon implementation of the program: 29 (i) Only those funds appropriated for health 30 investment insurance under section 306(b)(1)(vi) of the 20080H2348B3402 - 29 -
1 act of June 26, 2001 (P.L.755, No.77), known as the 2 Tobacco Settlement Act, and designated for the AdultBasic 3 Program. 4 (ii) Money currently required to be dedicated to the 5 AdultBasic Program or any alternative program to benefit 6 persons of low income under the Community Health 7 Reinvestment Agreement within the respective service 8 areas for each party to that agreement. Money under this 9 subparagraph shall be used only to defray the cost of the 10 program and subsidies approved under sections 1305 and 11 1306. 12 (5) Any moneys derived from whatever sources and 13 designated specifically to fund the program. 14 (6) Return on investments in the fund. 15 Section 1305. Purchase by eligible adults and individuals. 16 (a) Eligible adults.--An eligible adult who seeks to 17 purchase coverage under the program must: 18 (1) Submit an application to the department or its 19 contractor. 20 (2) Pay to the department or its contractor the amount 21 of the premium specified. 22 (3) Be responsible for any required copayments for 23 health care services rendered under the health benefit plan 24 in section 1313 subject to Federal waiver requirements. 25 (4) Notify the department or its contractor of any 26 change in the eligible adult's or individual's household 27 income. 28 (b) Monthly premiums.--Except to the extent that changes may 29 be necessary to meet Federal requirements under section 1317 or 30 to encourage eligible employer participation, subsidies for the 20080H2348B3402 - 30 -
1 2008-2009 fiscal year and each fiscal year thereafter shall 2 result in the following premium amount based on household income 3 for a health benefit plan: 4 (1) For an eligible adult whose household income is not 5 greater than 150% of the Federal poverty level, no monthly 6 premium. 7 (2) For an eligible adult whose household income is 8 greater than 150% but not greater than 175% of the Federal 9 poverty level, a monthly premium of $40. 10 (3) For an eligible adult whose household income is 11 greater than 175% but not greater than 200% of the Federal 12 poverty level, a monthly premium of $50. 13 (4) For an eligible adult whose household income is 14 greater than 200%, a monthly premium may be established based 15 upon Federal requirements and in accordance with Federal 16 waivers, if applicable, by the commissioner. 17 (c) Other eligible adults.--An eligible adult whose 18 household income is greater than 200% of the Federal poverty 19 level may purchase under the program either the benefit package 20 under section 1313 or other qualifying health care coverage at 21 the per-member, per-month premium cost. 22 (d) Individuals.--For an individual whose household income 23 is greater than 300% of the Federal poverty level, an individual 24 may purchase the benefit package under section 1313 at the per- 25 member, per-month premium cost as long as the individual 26 demonstrates, on an annual basis and in a manner determined by 27 the department, either one of the following: 28 (1) The individual is unable to afford individual or 29 group coverage because that coverage would exceed 10% of the 30 individual's household income or because the total cost of 20080H2348B3402 - 31 -
1 coverage for the individual is 150% of the premium cost 2 established under this section for that service area. 3 (2) The individual has been refused coverage by an 4 insurer because the individual or a member of that 5 individual's immediate family has a preexisting condition and 6 coverage is not available to the individual. 7 (e) Establishing premiums.--For each fiscal year beginning 8 after June 30, 2009, the department may adjust the premium 9 amounts under subsection (b) to reflect changes in the cost of 10 medical services and shall forward notice of the new premium 11 amounts to the Legislative Reference Bureau for publication as a 12 notice in the Pennsylvania Bulletin. 13 (f) Purchase of health benefit plan.--An eligible adult's or 14 individual's payment to the department or its contractor under 15 subsection (b) shall be used to purchase the benefit health plan 16 established under section 1313 and must be remitted in a timely 17 manner. 18 (g) Subsidy.--Funding for the program shall be used by the 19 department to pay the difference between the total monthly cost 20 of the health benefit plan and the eligible adult's premium. 21 Subsidization of the health benefit plan is contingent upon the 22 amount of the funding for the program and is limited to eligible 23 adults in compliance with this section. 24 Section 1306. Participation by eligible employers and eligible 25 employees. 26 (a) Eligible employers.--An eligible employer that seeks to 27 participate in the program shall: 28 (1) Offer to all eligible employees the opportunity to 29 participate in the program and enroll at least one-half of 30 the eligible employees. 20080H2348B3402 - 32 -
1 (2) Comply with the application process established by 2 the department or its contractor. 3 (3) Remit to the department or its contractor any 4 premium amounts required under subsections (c) and (d). 5 (4) Allow health insurance premiums to be paid by 6 eligible employees on a pretax basis and inform its employees 7 of the availability of such program. 8 (5) Notify the department or its contractor of any 9 change in the eligible employee's income. 10 (b) Eligible employees.--An eligible employee who seeks to 11 participate with an eligible employer under the program must: 12 (1) Submit an application with the eligible employer to 13 the department or its contractor. 14 (2) Be responsible for any required copayments for 15 health care services rendered under the health benefit plan 16 in section 1313. 17 (c) Premiums for employers.-- 18 (1) In addition to remitting the eligible employee 19 portion under subsections (a) and (d), an eligible employer 20 shall pay the employer share of the total monthly cost for 21 each participating employee to the department or its 22 contractor each month. 23 (2) In addition to remitting the eligible employee 24 portion under paragraph (1), an eligible employer's premium 25 payment to the department or its contractor shall be at least 26 50% of the total monthly cost for each eligible employee but 27 not less than $150. 28 (d) Premiums for eligible employees.--The premium for 29 eligible employees shall be the same as the premium required to 30 be paid by eligible adults under section 1305(b). 20080H2348B3402 - 33 -
1 (e) Purchase by certain eligible employees.--An eligible 2 employee whose household income is greater than 200% of the 3 Federal poverty level may purchase either the benefit package 4 under section 1313 or other qualifying health care coverage 5 under section 1307 at the per-member, per-month premium cost 6 minus any amount remitted by the employer under subsection (c). 7 (f) Publishing premium amounts.--For each fiscal year 8 beginning after June 30, 2009, the department may establish 9 different premium amounts for eligible employees and eligible 10 employers as required under this section and shall forward 11 notice of the new premium amounts to the Legislative Reference 12 Bureau for publication as a notice in the Pennsylvania Bulletin. 13 (g) Purchase of coverage.--A premium payment made by an 14 eligible employer to the department or its contractor shall be 15 used to purchase the health benefit plan and must be remitted in 16 a timely manner. 17 (h) Alternative coverage.-- 18 (1) Notwithstanding any other provision of law to the 19 contrary, employer-based coverage may, in the commissioner's 20 sole discretion, be purchased in place of participation in 21 the program or may be purchased in conjunction with any 22 portion of the program provided outside the scope of the 23 program contracts by the Commonwealth paying the employee's 24 share of the premium to the employer if it is more cost 25 effective for the Commonwealth to purchase health care 26 coverage from an employee's employer-based program than to 27 pay the Commonwealth's share of a subsidized premium. 28 (2) This section shall apply to any employer-based 29 program, whether individual or family, such that if the 30 Commonwealth's share for the employee plus its share for any 20080H2348B3402 - 34 -
1 spouse under the program or children under the children's 2 health insurance program is greater than the employee's 3 premium share for family coverage under the employer-based 4 program, the Commonwealth may choose to pay the latter alone 5 or in combination with providing any benefit the Commonwealth 6 does not provide through its program contracts. 7 (i) Termination of employment.--An eligible employee who is 8 terminated from employment shall be eligible to continue 9 participating in the program if the eligible employee continues 10 to meet the requirements as an eligible adult and pays any 11 increased premium required. 12 Section 1307. Health savings accounts. 13 The department shall permit the establishment of health 14 savings accounts that are actuarially equivalent to the benefits 15 in section 1313 for employees who enroll in the program. Health 16 savings accounts established under the program shall meet the 17 requirements as defined in section 223(d) of the Internal 18 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 223(d)). 19 Section 1308. Continuing Access with Relief for Employers 20 (CARE) grants. 21 (a) General rule.--A Continuing Access with Relief for 22 Employers (CARE) grant shall be provided to employers that meet 23 the requirements of this section. 24 (b) Eligibility.--An employer is eligible to receive a CARE 25 grant if that employer meets the following: 26 (1) has maintained coverage for at least 12 consecutive 27 months prior to the effective date of this act; or 28 (2) (i) has maintained coverage for at least 12 29 consecutive months prior to applying for the CARE grant; 30 (ii) has incurred a health care expense in this 20080H2348B3402 - 35 -
1 Commonwealth; and 2 (iii) has a tax liability for the year in which 3 application is made for the CARE grant. 4 (c) Application.--Beginning July 1, 2009, and for each year 5 thereafter, an employer seeking to receive a CARE grant shall 6 submit an application to the department containing, at a 7 minimum, the following information: 8 (1) A statement of the aggregate health care expense 9 made by the employer to provide coverage during the previous 10 12 consecutive months to employees. 11 (2) The names, addresses and Social Security numbers of 12 the employees provided health care coverage under paragraph 13 (1) and whether that health care coverage is for the employee 14 or the employee and the employee's spouse and/or dependents. 15 (3) The names and addresses of the insurance carriers or 16 underwriters that received payment from the employer for the 17 health care coverage provided under paragraph (2). 18 (d) Computation.--An employer who qualifies under subsection 19 (b) shall receive a grant limited to actual employer health care 20 expenses paid for the previous 12 consecutive months in 21 accordance with the following: 22 (1) No greater than 25% of the employer's health care 23 expense to maintain health care coverage for the employee. 24 (2) No greater than 50% of the employer's health care 25 expense to maintain health care coverage for the employee, 26 the employee's spouse and/or dependents. 27 (3) The total amount of paragraphs (1) and (2) shall not 28 exceed the tax liability owed by the employer for the year 29 application is made for the CARE grant. 30 (4) If no tax liability is owed by the employer then the 20080H2348B3402 - 36 -
1 employer may not apply for a CARE grant. 2 (e) Duties of department.--The department has the following 3 duties: 4 (1) Administer the program. 5 (2) In consultation with other appropriate Commonwealth 6 agencies: 7 (i) Develop an application for the collection of 8 information that is consistent with the requirements of 9 this section and that contains any other information that 10 may be necessary to award CARE grants. 11 (ii) Develop a process to determine the validity of 12 information collected by the department from the 13 application with information filed by the employer, the 14 employee or insurers with any other agency. This process 15 shall include guaranteeing confidentiality of employer 16 and employee information that is consistent with Federal 17 and State laws. 18 (f) Coordination.--The department shall coordinate with 19 other departments in the implementation of this section. 20 (g) Limitation on grants.--The total amount of grants 21 approved by the department shall not exceed the amount of 22 funding designated under section 762. Any application filed by 23 an employer when funding is not available shall not be 24 considered and cannot be carried forward for consideration in 25 any succeeding fiscal year. 26 (h) Lapse.--Funds not used by the department for CARE grants 27 at the end of the fiscal year shall lapse back to the Health 28 Care Provider Retention Account and be designated to the PA ABC 29 Program. 30 (i) Report to General Assembly.--The department shall submit 20080H2348B3402 - 37 -
1 an annual report to the General Assembly indicating the 2 effectiveness of the program provided under this section no 3 later than March 15, 2010. The report shall include the names of 4 all the employers that received a CARE grant as of the date of 5 the report and the amount of each CARE grant approved. The 6 report may also include any recommendations for changes in the 7 calculation or administration of the CARE grant. 8 (j) Sunset.--This section shall sunset January 1, 2018. 9 (k) Definitions.--As used in this section, the following 10 words and phrases shall have the meanings given to them in this 11 subsection: 12 "CARE grant." A Continuing Access with Relief for Employers 13 (CARE) grant provided by the Department of Community and 14 Economic Development. 15 "Coverage." Health care coverage that is maintained by an 16 employer for an employee, the employee's spouse and/or 17 dependents for 12 consecutive months. 18 "Department." The Department of Community and Economic 19 Development of the Commonwealth. 20 "Employee." An individual who meets the following: 21 (1) Is employed for more than 20 hours in a single week 22 and from whose wages an employer is required under the 23 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. 24 §1 et seq.) to withhold Federal income tax. 25 (2) Is at least 19 years of age but no older than 64 26 years of age. 27 (3) Legally resides within the United States. 28 (4) Has been domiciled in this Commonwealth for at least 29 90 days prior to enrollment. 30 (5) Has a household income that is no greater than 300% 20080H2348B3402 - 38 -
1 of the Federal poverty level at the time of application. 2 "Employer." An employer that meets all of the following: 3 (1) Has at least two, but not more than 50 full-time 4 equivalent employees. 5 (2) Pays an average annual wage that is not greater than 6 300% of the Federal poverty limit for an individual. 7 "Health care coverage." A health benefit plan or other form 8 of health care coverage that is approved by the Department of 9 Community and Economic Development in consultation with the 10 Insurance Department. The term does not include coverage under 11 the PA ABC program. 12 "Health care expense." A payment made by an employer to 13 maintain health care coverage for an employee, the employee's 14 spouse and/or dependents. 15 "Program." The Continuing Access with Relief for Employers 16 (CARE) Grant Program established under this section. 17 "Tax liability." Liability under Article III, IV or VI of 18 the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform 19 Code of 1971. 20 Section 1309. Program requirements. 21 (a) Rates.--Rates for the program shall be approved annually 22 by the department and may vary by region and contractor. Rates 23 shall be based on an actuarially sound and adequate review. 24 (b) Annual premiums review.--Premiums for the program shall 25 be established annually by the department. 26 (c) Use of funding.--Funding shall be used by the department 27 to pay the difference between the total monthly cost of the 28 health benefit plan and the premium payments by the eligible 29 employee, the eligible employer or the eligible adult. 30 (d) Monthly increases.--With respect to a continuous period 20080H2348B3402 - 39 -
1 of eligibility for an eligible employer to apply for 2 participation in the program and in addition to the requirements 3 of section 1306(d), an eligible employer shall be subject to a 4 1% increase in the base premium for each month after the latter 5 of the following: 6 (1) twelve months from the date of the effective date of 7 this section; or 8 (2) twelve months from the date the eligible employer 9 files for a Federal or State tax identification number. 10 (e) Funding contingency for subsidization.--Subsidization of 11 premiums paid under sections 1305 and 1306 is contingent upon 12 the amount of the funding available to the program, the Federal 13 poverty levels approved by the Federal waiver or State plan 14 amendments granted under section 1317 and is limited to eligible 15 adults and eligible employees who are in compliance with the 16 requirements under this chapter. 17 (f) Limit on subsidy.--At no time shall the subsidy paid by 18 the Commonwealth from funds other than Federal moneys for the 19 premium of eligible employees be more than 40% of the total cost 20 of the health benefit plan purchased in each region or with each 21 contractor. 22 Section 1310. Duties of department. 23 The department has the following duties: 24 (1) Administer the program on a Statewide basis. 25 (2) Solicit bids or proposals and award contracts as 26 follows: 27 (i) The department shall solicit bids or proposals 28 and award contracts for the basic benefit package under 29 section 1313 through a competitive procurement process in 30 accordance with 62 Pa.C.S. (relating to procurement) and 20080H2348B3402 - 40 -
1 subsection (g). The department may award contracts on a 2 multiple-award basis as described in 62 Pa.C.S. § 517 3 (relating to multiple awards). 4 (ii) (A) In order to effectuate the program 5 promptly upon receipt of all applicable waivers and 6 approvals from the Federal Government, the department 7 may amend such contracts as currently exist to 8 provide benefits under either the AdultBasic Program 9 or the Public Welfare Code, or may otherwise procure 10 services outside of the competitive procurement 11 process of 62 Pa.C.S. 12 (B) This subparagraph shall expire at such time 13 as there are effective contracts awarded under this 14 section in every county of this Commonwealth, but not 15 later than 18 months after the effective date of this 16 section. 17 (3) Subject to Federal requirements, impose reasonable 18 cost-sharing arrangements and encourage appropriate use by 19 contractors of cost-effective health care providers who will 20 provide quality health care by establishing and adjusting 21 copayments to be incorporated into the program by 22 contractors. The department shall forward changes of 23 copayments to the Legislative Reference Bureau for 24 publication as notices in the Pennsylvania Bulletin. The 25 changes shall be implemented by contractors as soon as 26 practicable following publication, but in no event more than 27 120 days following publication. 28 (4) In consultation with other appropriate Commonwealth 29 agencies, conduct monitoring and oversight of contracts 30 entered into with contractors. 20080H2348B3402 - 41 -
1 (5) In consultation with other appropriate Commonwealth 2 agencies, monitor, review and evaluate the adequacy, 3 accessibility and availability of services delivered to 4 eligible adults or eligible employees. 5 (6) In consultation with other appropriate Commonwealth 6 agencies, establish and coordinate the development, 7 implementation and supervision of an outreach plan to ensure 8 that all those who may be eligible are aware of the program. 9 The outreach plan shall include provisions for: 10 (i) Reaching special populations, including nonwhite 11 and non-English speaking individuals and individuals with 12 disabilities. 13 (ii) Reaching different geographic areas, including 14 rural and inner-city areas. 15 (iii) Assuring that special efforts are coordinated 16 within the overall outreach activities throughout this 17 Commonwealth. 18 (7) At the request of an eligible adult, eligible 19 employee or eligible employer, facilitate the payment on a 20 pretax basis of premiums: 21 (i) for the program and dependents covered under the 22 program; or 23 (ii) if applicable, for the children's health 24 insurance program. 25 (8) Establish penalties for eligible adults, eligible 26 employees or eligible employers who enroll in the program, 27 drop enrollment and subsequently re-enroll for the purpose of 28 avoiding the ongoing payment of premiums. The commissioner 29 shall forward notice of these penalties to the Legislative 30 Reference Bureau for publication as a notice in the 20080H2348B3402 - 42 -
1 Pennsylvania Bulletin. 2 (9) Coordinate with the Department of Public Welfare in 3 the implementation of this chapter and may designate the 4 Department of Public Welfare to perform any duties that are 5 appropriate under this chapter. 6 Section 1311. Submission of proposals and award of contracts. 7 (a) Corporations required to submit.--Each professional 8 health services plan corporation and hospital plan corporation 9 and their subsidiaries and affiliates doing business in this 10 Commonwealth shall submit a bid or proposal to the department to 11 carry out the purposes of this section in the geographic area 12 serviced by the corporation. All other insurers may submit a bid 13 or proposal to the department to carry out the purposes of this 14 section. 15 (b) Review and scoring of bids or proposals.--The 16 department shall review and score the bids or proposals on the 17 basis of all the requirements for the program. The department 18 may include other criteria in the solicitation and in the 19 scoring and selection of the bids or proposals that the 20 department, in the exercise of its duties under section 1310, 21 deems necessary. The department shall do all of the following: 22 (1) Select, to the greatest extent practicable, offerors 23 that contract with health care providers to provide health 24 care services on a cost-effective basis. The department shall 25 select offerors that use appropriate cost-management methods, 26 including the chronic care and prevention measures, which 27 will enable the program to provide coverage to the maximum 28 number of enrollees. 29 (2) Select, to the greatest extent practicable, only 30 offerors that comply with all procedures relating to 20080H2348B3402 - 43 -
1 coordination of benefits as required by the department and 2 the Department of Public Welfare. 3 (c) Contract terms.--Contracts may be for an initial term of 4 up to five years, with options to extend for five one-year 5 periods. 6 (d) Duties of contractors.--A contractor that contracts with 7 the department to provide a health benefit plan to eligible 8 adults or eligible employees: 9 (1) Shall process claims for the coverage. 10 (2) May not deny coverage to an eligible adult or 11 eligible employee who has been approved by the department to 12 participate in the program. 13 Section 1312. Rates and charges. 14 (a) Medical loss ratio.--The medical loss ratio for a 15 contract shall be not less than 85%. 16 (b) Limitation on fees.--No eligible adult or eligible 17 employee shall be charged a fee, other than those specified in 18 this chapter, as a requirement for participating in the program. 19 Section 1313. Health benefit plan. 20 (a) Benefits.--The health benefit plan to be offered under 21 the program shall be of the scope and duration as the department 22 determines and shall provide for all of the following, which may 23 be as limited or unlimited as the department may determine: 24 (1) Preliminary and annual health assessments. 25 (2) Emergency care. 26 (3) Inpatient and outpatient care. 27 (4) Prescription drugs, medical supplies and equipment. 28 (5) Emergency dental care. 29 (6) Maternity care. 30 (7) Skilled nursing. 20080H2348B3402 - 44 -
1 (8) Home health and hospice care. 2 (9) Chronic disease management. 3 (10) Preventive and wellness care. 4 (11) Inpatient and outpatient behavioral health 5 services. 6 (b) Commonwealth election.--The Commonwealth may elect to 7 provide any benefit independently and outside the scope of the 8 program contracts. 9 (c) Enrollment.--Enrollment in the program may not be 10 prohibited based upon a preexisting condition, nor may a program 11 health benefit plan exclude a diagnosis or treatment for a 12 condition based upon its preexistence. 13 (d) Copayments.--The department may establish a copayment 14 for any of the services provided in the health benefit plan as 15 long as the copayment meets any Federal requirements under 16 section 1317. The department shall forward notice of the 17 copayment amounts to the Legislative Reference Bureau for 18 publication as a notice in the Pennsylvania Bulletin. 19 Section 1314. Data matching. 20 (a) Covered individuals.--All entities providing health 21 insurance or health care coverage within this Commonwealth 22 shall, not less frequently than once every month, provide the 23 names, identifying information and any additional information on 24 coverage and benefits as the department may specify for all 25 individuals for whom the entities provide insurance or coverage. 26 (b) Use of information.-- 27 (1) The department shall use information obtained in 28 subsection (a) to determine whether any portion of an 29 eligible adult's, eligible employee's or eligible employer's 30 premium is being paid from any other source and to determine 20080H2348B3402 - 45 -
1 whether another entity has primary liability for any health 2 care claims paid under any program administered by the 3 department. 4 (2) If a determination is made that an eligible adult's, 5 eligible employee's or eligible employer's premium is being 6 paid from another source, the department may not make any 7 additional payments to the insurer for the eligible adult, 8 eligible employee or eligible employer. 9 (c) Excess payment.--If a payment has been made to an 10 insurer by the department for an eligible adult, eligible 11 employee or eligible employer for whom any portion of the 12 premium paid by the department is being paid from another 13 source, the insurer shall reimburse the department the amount of 14 any excess payment or payments. 15 (d) Reimbursement.--The department may seek reimbursement 16 from an entity that provides health insurance or health care 17 coverage that is primary to the coverage provided under any 18 program administered by the department. 19 (e) Timeliness.--To the maximum extent permitted by law and 20 notwithstanding any policy or plan provision to the contrary, a 21 claim by the department for reimbursement under subsection (c) 22 or (d) shall be deemed timely filed if it is filed with the 23 insurer or entity within three years following the date of 24 payment. 25 (f) Agreements.--The department may enter into agreements 26 with entities that provide health insurance and health care 27 coverage for the purpose of carrying out the provisions of this 28 section. The agreements shall provide for the electronic 29 exchange of data between the parties at a mutually agreed upon 30 frequency, but not less than monthly, and may also allow for 20080H2348B3402 - 46 -
1 payment of a fee by the department to the entity providing 2 health insurance or health care coverage. 3 (g) Other coverage.-- 4 (1) The department shall determine whether any other 5 health care coverage is available to an eligible adult, 6 eligible employee or eligible employer through an alimony 7 agreement or an employment-related or other group basis. 8 (2) If other health care coverage is available, the 9 department shall reevaluate the enrollee's eligibility under 10 this chapter. 11 (h) Penalty.-- 12 (1) The department may impose a penalty of up to $1,000 13 per violation on any insurer that fails to comply with the 14 obligations imposed by this chapter. 15 (2) All moneys collected under this subsection shall be 16 deposited into the fund. 17 Section 1315. Entitlements and claims. 18 Nothing in this chapter shall be construed as an entitlement 19 derived from the Commonwealth or a claim on any funds of the 20 Commonwealth. The Department of Public Welfare, in conjunction 21 with the department, shall establish a waiting list and State 22 plan amendments and revisions to Federal waivers as are 23 necessary to ensure that expenditures in the program do not 24 exceed available funding. 25 Section 1316. Regulations. 26 The department may promulgate regulations for the 27 implementation and administration of this chapter. 28 Section 1317. Federal waivers. 29 (1) The Department of Public Welfare, in cooperation 30 with the department, shall apply for all applicable waivers 20080H2348B3402 - 47 -
1 from the Federal Government and shall seek approval to amend 2 the State plan as necessary to carry out the provisions of 3 this chapter. 4 (2) If the Department of Public Welfare receives 5 approval of a waiver or approval of a State plan amendment as 6 required by this section, it shall notify the department and 7 transmit notice of the waiver or State plan amendment 8 approvals to the Legislative Reference Bureau for publication 9 as a notice in the Pennsylvania Bulletin. 10 (3) The department may change the benefits under section 11 1313 and the premium and copayment amounts payable under 12 sections 1305 and 1306 and eligibility requirements in order 13 for the program to meet Federal requirements. 14 Section 1318. Federal funds. 15 Notwithstanding any other provision of law, the Department of 16 Public Welfare, in cooperation with the department, shall take 17 any action necessary to do all of the following: 18 (1) Ensure the receipt of Federal financial 19 participation under Title XIX of the Social Security Act (49 20 Stat. 620, 42 U.S.C. § 1396 et seq.) for coverage and for 21 services provided under this chapter. 22 (2) Qualify for available Federal financial 23 participation under Title XIX of the Social Security Act. 24 Section 12. The Insurance Department shall publish a notice 25 in the Pennsylvania Bulletin when a law is enacted that provides 26 for or designates at least $120,000,000 for the Supplemental 27 Assistance and Funding Account. 28 Section 13. Repeals are as follows: 29 (1) The General Assembly declares that the repeal under 30 paragraph (2) is necessary to effectuate this act. 20080H2348B3402 - 48 -
1 (2) Chapter 13 of the act of June 26, 2001 (P.L.755, 2 No.77), known as the Tobacco Settlement Act. 3 (3) All other acts and parts of acts are repealed 4 insofar as they are inconsistent with this act. 5 Section 14. The amendment of section 712(e) of the act shall 6 apply retroactively to December 31, 2007. 7 Section 15. This act shall take effect as follows: 8 (1) The following provisions shall take effect July 1, 9 2008, or immediately, whichever is later: 10 (i) The amendment of section 712(e) and (m) of the 11 act. 12 (ii) The amendment of the definition of "health care 13 provider" in section 1101 of the act. 14 (iii) The amendment of section 1112 of the act. 15 (iv) Section 12 of this act. 16 (2) The remainder of this act shall take effect upon 17 publication of the notice specified under section 12 of this 18 act. C10L40DMS/20080H2348B3402 - 49 -