THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY VANCE, FONTANA, ERICKSON, SCARNATI, PILEGGI, ALLOWAY, BAKER, BOSCOLA, BROWNE, CORMAN, COSTA, EARLL, FARNESE, FERLO, GORDNER, GREENLEAF, HUGHES, KASUNIC, LEACH, LOGAN, MELLOW, O'PAKE, ORIE, PICCOLA, PIPPY, RAFFERTY, ROBBINS, STACK, STOUT, TARTAGLIONE, WASHINGTON, WAUGH AND YAW, JANUARY 29, 2009

REFERRED TO PUBLIC HEALTH AND WELFARE, JANUARY 29, 2009  

AN ACT

Amending the act of July 8, 1986 (P.L.408, No.89), entitled, as

reenacted, "An act providing for the creation of the Health

Care Cost Containment Council, for its powers and duties, for

health care cost containment through the collection and

dissemination of data, for public accountability of health

care costs and for health care for the indigent; and making

an appropriation," defining "committee"; further providing

for the Health Care Cost Containment Council and its powers

and duties, for data submission and collection and for access

to council data; and providing for the establishment of a

Health Care Cost Containment Council Act Review Committee and

for sunset of act.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 3 of the act of July 8, 1986 (P.L.408,

No.89), known as the Health Care Cost Containment Act, reenacted

and amended July 17, 2003 (P.L.31, No.14), is amended by adding

a definition to read:

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Committee."  The Health Care Cost Containment Council Act

Review Committee.

* * *

Section 2.  Sections 4(f), 5(c) and (d), 6(a) and (d) and

10(b)(5) of the act are amended to read:

Section 4.  Health Care Cost Containment Council.

* * *

(f)  Bylaws.--The council shall adopt bylaws, not

inconsistent with this act, and may appoint such committees or

elect such officers subordinate to those provided for in

subsection (c) as it deems advisable. The council shall provide

for the approval and participation of additional delegates

appointed under subsection (b)(7) and (8) so that each

organization represented by delegates under those paragraphs

shall not have more than one vote on any committee to which they

are appointed. The council shall also appoint a technical

advisory group which shall, on an ad hoc basis, respond to

issues presented to it by the council or committees of the

council and shall make recommendations to the council. The

technical advisory group shall include physicians, researchers,

biostatisticians, one representative of the Hospital and

Healthsystem Association of Pennsylvania and one representative

of the Pennsylvania Medical Society. The Hospital and

Healthsystem Association of Pennsylvania and the Pennsylvania

Medical Society representatives shall not be subject to

executive committee approval. In appointing other physicians,

researchers and biostatisticians to the technical advisory

group, the council shall consult with and take nominations from

the representatives of the Hospital Association of Pennsylvania,

the Pennsylvania Medical Society, the Pennsylvania Osteopathic

Medical Society or other like organizations. At its discretion

and in accordance with this section, nominations shall be

approved by the executive committee of the council. If the

subject matter of any project exceeds the expertise of the

technical advisory group, physicians in appropriate specialties

who possess current knowledge of the issue under study may be

consulted. The technical advisory group shall also review the

availability and reliability of severity of illness measurements

as they relate to small hospitals and psychiatric,

rehabilitation and children's hospitals and shall make

recommendations to the council based upon this review. Meetings

of the technical advisory group shall be open to the general

public.

* * *

Section 5.  Powers and duties of the council.

* * *

(c)  Audit powers.--The council shall have the right to

independently audit all information required to be submitted by

data sources as needed to corroborate the accuracy of the

submitted data, pursuant to the following:

(1)  Audits of information submitted by providers or

health care insurers shall be performed on a sample and

issue-specific basis, as needed by the council, and shall be

coordinated, to the extent practicable, with audits performed

by the Commonwealth. All health care insurers and providers

are hereby required to make those books, records of accounts

and any other data needed by the auditors available to the

council at a convenient location within 30 days of a written

notification by the council.

(2)  Audits of information submitted by purchasers shall

be performed on a sample basis, unless there exists

reasonable cause to audit specific purchasers, but in no case

shall the council have the power to audit financial

statements of purchasers.

(3)  All audits performed by the council shall be

performed at the expense of the council.

(4)  The results of audits of providers or health care

insurers shall be provided to the audited providers and

health care insurers on a timely basis, not to exceed 30 days

beyond presentation of audit findings to the council.

(d)  General duties and functions.--The council is hereby

authorized to and shall perform the following duties and

functions:

(1)  Develop a computerized system for the collection,

analysis and dissemination of data. The council may contract

with a vendor who will provide such data processing services.

The council shall assure that the system will be capable of

processing all data required to be collected under this act.

Any vendor selected by the council shall be selected in

accordance with the provisions of section 16, and said vendor

shall relinquish any and all proprietary rights or claims to

the data base created as a result of implementation of the

data processing system.

(2)  Establish a Pennsylvania Uniform Claims and Billing

Form for all data sources and all providers which shall be

utilized and maintained by all data sources and all providers

for all services covered under this act.

(3)  Collect and disseminate data, as specified in

section 6, and other information from data sources to which

the council is entitled, prepared according to formats, time

frames and confidentiality provisions as specified in

sections 6 and 10, and by the council.

(4)  Adopt and implement a methodology to collect and

disseminate data reflecting provider quality and provider

service effectiveness pursuant to section 6.

(5)  Subject to the restrictions on access to raw data

set forth in section 10, issue special reports and make

available raw data as defined in section 3 to any purchaser

requesting it. Sale by any recipient or exchange or

publication by a recipient, other than a purchaser, of raw

council data to other parties without the express written

consent of, and under terms approved by, the council shall be

unauthorized use of data pursuant to section 10(c).

(6)  On an annual basis, publish in the Pennsylvania

Bulletin a list of all the raw data reports it has prepared

under section 10(f) and a description of the data obtained

through each computer-to-computer access it has provided

under section 10(f) and of the names of the parties to whom

the council provided the reports or the computer-to-computer

access during the previous month.

(7)  Promote competition in the health care and health

insurance markets.

(8)  Assure that the use of council data does not raise

access barriers to care.

(10)  Make annual reports to the General Assembly on the

rate of increase in the cost of health care in the

Commonwealth and the effectiveness of the council in carrying

out the legislative intent of this act. In addition, the

council may make recommendations on the need for further

health care cost containment legislation. The council shall

also make annual reports to the General Assembly on the

quality and effectiveness of health care and access to health

care for all citizens of the Commonwealth.

(12)  Conduct studies and publish reports thereon

analyzing the effects that noninpatient, alternative health

care delivery systems have on health care costs. These

systems shall include, but not be limited to: HMO's; PPO's;

primary health care facilities; home health care; attendant

care; ambulatory service facilities; freestanding emergency

centers; birthing centers; and hospice care. These reports

shall be submitted to the General Assembly and shall be made

available to the public.

(13)  Conduct studies and make reports concerning the

utilization of experimental and nonexperimental transplant

surgery and other highly technical and experimental

procedures, including costs and mortality rates.

(14)  In order to ensure that the council adopts and

maintains both scientifically credible and cost-effective

methodology to collect and disseminate data reflecting

provider quality and service effectiveness, the council

shall, within one year of the effective date of this

paragraph, utilizing current Commonwealth agency guidelines

and procedures, issue a request for information from any

vendor that wishes to provide data collection or risk

adjustment methodology to the council to help meet the

requirements of this subsection and section 6. The council

shall establish an independent Request for Information Review

Committee to review and rank all responses and to make a

final recommendation to the council. The Request for

Information Review Committee shall consist of the following

members appointed by the Governor:

(i)  One representative of the Hospital and

Healthsystem Association of Pennsylvania.

(ii)  One representative of the Pennsylvania Medical

Society.

(iii)  One representative of insurance.

(iv)  One representative of labor.

(v)  One representative of business.

(vi)  Two representatives of the general public.

(15)  The council shall execute a request for proposals

with third-party vendors for the purpose of demonstrating a

methodology for the collection, analysis and reporting of

hospital-specific complication rates. The results of this

demonstration shall be provided to the chairman and minority

chairman of the Public Health and Welfare Committee of the

Senate and the chairman and minority chairman of the Health

and Human Services Committee of the House of Representatives.

This methodology may be utilized by the council for public

reporting on comparative hospital complication rates.

Section 6.  Data submission and collection.

(a)  (1)  Submission of data.--The council is hereby

authorized to collect and data sources are hereby required to

submit, upon request of the council, all data required in

this section, according to uniform submission formats, coding

systems and other technical specifications necessary to

render the incoming data substantially valid, consistent,

compatible and manageable using electronic data processing

according to data submission schedules, such schedules to

avoid, to the extent possible, submission of identical data

from more than one data source, established and promulgated

by the council in regulations pursuant to its authority under

section 5(b). If payor data is requested by the council, it

shall, to the extent possible, be obtained from primary payor

sources. The council shall not require any data sources to

contract with any specific vendor for submission of any

specific data elements to the council.

(1.1)  Any vendor shall comply with data submission

guidelines established in the report submitted under section

17.2. The council shall maintain a vendor list of at least

two vendors that may be chosen by any data source for

submission of any specific data elements.

(2)  Except as provided in this section, the council may

adopt any nationally recognized methodology to adjust data

submitted under subsection (c) for severity of illness. Every

three years after the effective date of this paragraph, the

council shall solicit bids from third-party vendors to adjust

the data. The solicitation shall be in accordance with 62

Pa.C.S. (relating to procurement). Except as provided in

subparagraph (i), in carrying out its responsibilities, the

council shall not require health care facilities to report

data elements which are not included in the manual developed

by the national uniform billing committee. The following

apply:

(i)  Within 60 days of the effective date of this

paragraph, the council shall publish in the Pennsylvania

Bulletin a list of diseases, procedures and medical

conditions, not to exceed 35, for which data under

subsections (c)(21) and (d) shall be required. The chosen

list shall not represent more than 50% of total hospital

discharges, based upon the previous year's hospital

discharge data. Subsequent to the publication of the

list, any data submission requirements under subsections

(c)(21) and (d) previously in effect shall be null and

void for diseases, procedures and medical conditions not

found on the list. All other data elements pursuant to

subsection (c) shall continue to be required from data

sources. The council shall review the list and may add no

more than a net of three diseases, procedures or medical

conditions per year over a five-year period starting on

the effective date of this subparagraph. The adjusted

list of diseases, procedures and medical conditions shall

at no time be more than 50% of total hospital discharges.

(ii)  If the current data vendor is unable to

achieve, on a per-chart basis, savings of at least 40% in

the cost of hospital compliance with the data abstracting

and submission requirements of this act by June 30, 2004,

as compared to June 30, 2003, then the council shall

disqualify the current vendor and reopen the bidding

process. The independent auditor shall determine the

extent and validity of the savings. In determining any

demonstrated cost savings, surveys of all hospitals in

this Commonwealth shall be conducted and consideration

shall be given at a minimum to:

(A)  new costs, in terms of making the

methodology operational, associated with laboratory,

pharmacy and other information systems a hospital is

required to purchase in order to reduce hospital

compliance costs, including the cost of electronic

transfer of required data; and

(B)  the audited direct personnel and related

costs of data abstracting and submission required.

(iii)  Review by the independent auditor shall

commence by March 1, 2004, and shall conclude with a

report of findings by July 31, 2004. The report shall be

delivered to the council, the Governor, the Health and

Human Services Committee of the House of Representatives

and the Public Health and Welfare Committee of the

Senate.

* * *

(d)  Provider quality and provider service effectiveness data

elements.--In carrying out its duty to collect data on provider

quality and provider service effectiveness under section 5(d)(4)

and subsection (c)(21), the council shall define a methodology

to measure provider service effectiveness which may include

additional data elements to be specified by the council

sufficient to carry out its responsibilities under section 5(d)

(4). The council may adopt a nationally recognized methodology

of quantifying and collecting data on provider quality and

provider service effectiveness until such time as the council

has the capability of developing its own methodology and

standard data elements. The council shall include in the

Pennsylvania Uniform Claims and Billing Form a field consisting

of the data elements required pursuant to subsection (c)(21) to

provide information on each provision of covered services

sufficient to permit analysis of provider quality and provider

service effectiveness within 180 days of commencement of its

operations pursuant to section 4. In carrying out its

responsibilities, the council shall not require health care

insurers to report on data elements that are not reported to

nationally recognized accrediting organizations, to the

Department of Health or to the Insurance Department in quarterly

or annual reports. The council shall not require reporting by

health care insurers in different formats than are required for

reporting to nationally recognized accrediting organizations or

on quarterly or annual reports submitted to the Department of

Health or to the Insurance Department. The council may adopt the

quality findings as reported to nationally recognized

accrediting organizations. Additional quality data elements must

be defined and released for public comment prior to the

promulgation of regulations pursuant to section 5(b). The public

comment period shall be no less than 30 days from the release of

these elements.

* * *

Section 10.  Access to council data.

* * *

(b)  Limitations on access.--Unless specifically provided for

in this act, neither the council nor any contracting system

vendor shall release and no data source, person, member of the

public or other user of any data of the council shall gain

access to:

* * *

(5)  Any raw data disclosing discounts or differentials

between payments accepted by providers for services and their

billed charges obtained by identified payors from identified

providers unless the data is released in a Statewide,

aggregate format that does not identify any individual payor

or class of payors and the council assures that the release

of such information is not prejudicial or inequitable to any

individual payor or provider or group thereof. Payor data

shall be released to individual providers for purposes of

verification and validation prior to inclusion in a public

report. An individual provider shall verify and validate the

payor data within 30 days of its release to that specific

individual provider.

* * *

Section 3.  The act is amended by adding sections to read:

Section 17.2.  Health Care Cost Containment Council Act Review

Committee.

(a)  Establishment.--There is hereby established an

independent committee to be known as the Health Care Cost

Containment Council Act Review Committee.

(b)  Composition.--The committee shall consist of the

following voting members composed of and appointed as follows:

(1)  One member appointed by the Governor.

(2)  Four members appointed by the General Assembly, one

of whom shall be appointed by each of the following:

(i)  one by the President pro tempore of the Senate;

(ii)  one by the Minority Leader of the Senate;

(iii)  one by the Majority Leader of the House of

Representatives; and

(iv)  one by the Minority Leader of the House of

Representatives .

(3)  Two representatives of the business community, at

least one of whom represents small business, and neither of

whom is primarily involved in the provision of health care or

health insurance, one of whom shall be appointed by the

President pro tempore of the Senate and one of whom shall be

appointed by the Speaker of the House of Representatives from

a list of four qualified persons recommended by the

Pennsylvania Chamber of Business and Industry.

(4)  Two representatives of organized labor, one of whom

shall be appointed by the President pro tempore of the Senate

and one of whom shall be appointed by the Speaker of the

House of Representatives from a list of four qualified

persons recommended by the Pennsylvania AFL-CIO.

(5)  One representative of consumers who is not primarily

involved in the provision of health care or health care

insurance, appointed by the Governor from a list of three

qualified persons recommended jointly by the President pro

tempore of the Senate and the Speaker of the House of

Representatives.

(6)  One representative of hospitals, appointed by the

Governor from a list of three qualified hospital

representatives recommended by the Hospital and Health System

Association of Pennsylvania.

(7)  One representative of physicians, appointed by the

Governor from a list of three qualified physician

representatives recommended jointly by the Pennsylvania

Medical Society and the Pennsylvania Osteopathic Medical

Society.

(8)  One representative of nurses, appointed by the

Governor from a list of three qualified representatives

recommended by the Pennsylvania State Nurses Association.

(9)  One representative of the Blue Cross and Blue Shield

plans in Pennsylvania, appointed by the Governor from a list

of three qualified persons recommended jointly by the Blue

Cross and Blue Shield plans of Pennsylvania.

(10)  One representative of commercial insurance

carriers, appointed by the Governor from a list of three

qualified persons recommended by the Insurance Federation of

Pennsylvania, Inc.

(c)  Chairperson.--The appointment made by the Governor under

subsection (b)(1) shall serve as chairman of the committee.

(d)  Quorum.--Eleven members shall constitute a quorum for

the transaction of any business, and the act by the majority of

the members present at any meeting in which there is a quorum

shall be deemed to be the act of the committee.

(e)  Meetings.--

(1)  All meetings of the committee shall be advertised

and conducted pursuant to 65 Pa.C.S. Ch. 7 (relating to open

meetings).

(2)  All action taken by the committee shall be taken in

open public session, and action of the committee shall not be

taken except upon the affirmative vote of a majority of the

members of the committee present during meetings at which a

quorum is present.

(f)  Compensation and expenses.--The members of the committee

shall not receive a salary or per diem allowance for serving as

members of the committee but shall be reimbursed for actual and

necessary expenses incurred in the performance of their duties.

Expenses may include reimbursement of travel and living expenses

while engaged in committee business.

(g)  Commencement of committee.--

(1)  Within 15 days after the effective date of this

section, each organization or individual required to submit a

list of recommended persons to the Governor, the President

pro tempore of the Senate or the Speaker of the House of

Representatives under subsection (b) shall submit the list.

(2)  Within 30 days of the effective date of this

section, the Governor, the President pro tempore of the

Senate and the Speaker of the House of Representatives shall

make the appointments called for in subsection (b), and the

committee shall begin operations immediately following the

appointments.

(h)  Responsibilities of the committee.--The committee shall

have the following powers and duties:

(1)  To study, review and recommend changes to this act.

(2)  To accept and review suggested changes to this act

submitted by members of the committee.

(3)  To approve, by a majority vote of the members of the

committee, a report recommending statutory changes to this

act. The report shall include, at a minimum, the following:

(i)  The establishment of an Internet database for

the general public showing Medicare reimbursement rates

for common covered services and treatment.

(ii)  In consultation with experts in the fields of

quality data and outcome measures, the definition and

implementation of:

(A)  A methodology by provider type for the

council to risk adjust quality data.

(B)  A methodology for the council to collect and

disseminate data reflecting provider quality and

provider service effectiveness.

(4)  To submit the report approved under paragraph (3) to

the President pro tempore of the Senate and the Speaker of

the House of Representatives by April 30, 2009.

(i) Committee support.--The council shall offer staff and

administrative support from the council or its work groups

necessary for the committee to carry out its duties under this

section.

Section 4.  Section 19 of the act is amended to read:

Section 19.  Sunset.

This act shall expire [June 30, 2008] June 30, 2013, unless

reenacted prior to that date. By September 1, [2007] 2012, a

written report by the Legislative Budget and Finance Committee

evaluating the management, visibility, awareness and performance

of the council shall be provided to the Public Health and

Welfare Committee of the Senate and the Health and Human

Services Committee of the House of Representatives. The report

shall include a review of the council's procedures and policies,

the availability and quality of data for completing reports [to

hospitals and outside vendor purchasers, the ability of the

council to become self-sufficient by selling data to outside

purchasers], whether there is a more cost-efficient way of

accomplishing the objectives of the council and the need for

reauthorization of the council.

Section 5.  This act shall take effect as follows:

(1)  The amendment of section 6 of the act shall take

effect January 1, 2010.

(2)  The remainder of this act shall take effect

immediately.