PRINTER'S NO. 1429
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1211
Session of
2019
INTRODUCED BY FRANKEL, EVERETT, DeLUCA, HILL-EVANS, D. MILLER,
FREEMAN, CALTAGIRONE, DERMODY, A. DAVIS, READSHAW, KINSEY,
KORTZ, MURT, HARKINS, ROZZI, DEASY, CIRESI, MARKOSEK AND
NEILSON, APRIL 15, 2019
REFERRED TO COMMITTEE ON INSURANCE, APRIL 15, 2019
AN ACT
Amending the act of July 19, 1979 (P.L.130, No.48), entitled "An
act relating to health care; prescribing the powers and
duties of the Department of Health; establishing and
providing the powers and duties of the State Health
Coordinating Council, health systems agencies and Health Care
Policy Board in the Department of Health, and State Health
Facility Hearing Board in the Department of Justice;
providing for certification of need of health care providers
and prescribing penalties," in licensing of health care
facilities, further providing for definitions, for licensure
and for issuance of license; and, in general provisions,
repeals and effective date, providing for confidentiality.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 802.1 of the act of July 19, 1979
(P.L.130, No.48), known as the Health Care Facilities Act, is
amended by adding definitions to read:
Section 802.1. Definitions.
The following words and phrases when used in this chapter
shall have, unless the context clearly indicates otherwise, the
meanings given them in this section:
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"Default provider agreement." An agreement between a
hospital that is part of an integrated delivery network and a
willing health insurance carrier to provide health care
services, which agreement is imposed upon the parties if the
parties fail to enter into a mutually agreeable contract.
* * *
"Health insurance carrier." An entity licensed in this
Commonwealth to issue health insurance, subscriber contracts,
certifications or plans that provide medical or health care
coverage by a health care facility or licensed health care
provider that is offered or governed under this act or any of
the following:
(1) The act of December 29, 1972 (P.L.1701, No.364),
known as the "Health Maintenance Organization Act."
(2) The act of May 18, 1976 (P.L.123, No.54), known as
the "Individual Accident and Sickness Insurance Minimum
Standards Act."
(3) 40 Pa.C.S. Chs. 61 (relating to hospital plan
corporations) and 63 (relating to professional health
services plan corporations).
* * *
"Integrated delivery network." One or more entities with
common ownership, operation or control, which include both of
the following:
(1) One or more hospitals, one or more physician
practices or one or more health care providers offering
health care services.
(2) One or more entities operating as a health insurance
carrier offering health insurance, administering health
benefits, operating a health maintenance organization or
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offering other health care benefits and coverage to employers
or individuals in this Commonwealth.
* * *
Section 2. Section 806 of the act is amended by adding a
subsection to read:
Section 806. Licensure.
* * *
(j) Hospitals operating as part of an integrated delivery
network.--
(1) In addition to complying with the standards and
regulations promulgated under this section, a hospital
operating as part of an integrated delivery network or an
entity directly or indirectly owned, operated or controlled
as part of this entity shall contract with a health insurance
carrier that is willing to enter into a contract.
(2) When contracting with a health insurance carrier, a
hospital operating as part of an integrated delivery network
shall be:
(i) prohibited from using contractual provisions and
engaging in business practices that impede the
availability of health care and that restrict access to
facilities based solely on the type of insurance coverage
offered by a health insurance carrier;
(ii) prohibited from incorporating contractual
provisions that limit or preclude the use of tiered
networks by health insurance carriers;
(iii) prohibited from using any portion of the
reimbursement rate to subsidize a health insurance
carrier operating as part of the same integrated delivery
network;
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(iv) prohibited from incorporating a termination
provision with a health insurance carrier for reasons
other than a willful breach of contract; and
(v) permitted to contract for its services at
reimbursement rates that are based upon sound actuarial
data.
(3) Failure of a hospital operating as part of an
integrated delivery network and a willing health insurance
carrier to maintain a mutually agreeable contract shall
result in the parties entering into a default provider
agreement while they submit to mandatory binding arbitration.
The default provider agreement shall set forth payment terms,
while all other contractual terms of the previously executed
contract shall remain in effect until the arbitration process
is completed. The arbitrator shall set all terms of the new
contract.
(4) Failure of a newly affiliated hospital with an
existing integrated delivery network or failure of a hospital
operating as part of a newly formed integrated delivery
network and a willing health insurance carrier to enter into
a mutually agreeable contract within 90 days of the
affiliation or formation shall result in the parties
submitting to mandatory binding arbitration to establish a
contract. The arbitrator shall set all terms of the new
contract.
(5) A mutually agreeable arbitrator shall be chosen by
the parties from the American Arbitration Association's
national healthcare panel of arbitrators experienced in
handling payor-provider disputes.
(6) All costs associated with the arbitration shall be
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split equally between the parties.
(7) The arbitrator shall conduct the arbitration
pursuant to the American Arbitration Association's healthcare
payor provider rules.
(8) Contract terms and conditions shall be established
as follows:
(i) Each party shall submit best and final contract
terms to the arbitrator.
(ii) The arbitrator may request the production of
documents, data and other information.
(iii) Payment terms and all other contractual
provisions shall be set by the arbitrator.
(9) The default provider agreement shall remain in
effect until the hospital operating as part of an integrated
delivery network and a willing health insurance carrier
complete the arbitration process.
(10) Payment terms under the default provider agreement
will be set according to an amount equal to the greatest of
the following three possible amounts:
(i) The amount the health insurance carrier
negotiated with other in-network hospitals for the same
service.
(ii) The amount calculated by the same method the
health insurance carrier uses to determine payments for
out-of-network services, such as the usual, customary and
reasonable charge.
(iii) The amount that would be paid under Medicare
for the same services.
(11) Copies of all contracts between hospitals operating
as part of an integrated delivery network and all health
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insurance carriers shall be provided to the department and
the Insurance Department.
Section 3. Section 808(a) of the act is amended and the
section is amended by adding subsections to read:
Section 808. Issuance of license.
(a) Standards.--The department shall issue a license to a
health care provider when it is satisfied that the following
standards have been met:
(1) that the health care provider is a responsible
person;
(2) that the place to be used as a health care facility
is adequately constructed, equipped, maintained and operated
to safely and efficiently render the services offered;
(3) that the health care facility provides safe and
efficient services which are adequate for the care, treatment
and comfort of the patients or residents of such facility;
(4) that there is substantial compliance with the rules
and regulations adopted by the department pursuant to this
act;
(5) that a certificate of need has been issued if one is
necessary; [and]
(6) that, in the case of abortion facilities, such
facility is in compliance with the requirements of 18 Pa.C.S.
Ch. 32 (relating to abortion) and such regulations
promulgated thereunder[.]; and
(7) that, in the case of a hospital operating as part of
an integrated delivery network, the facility:
(i) has contracts with all willing health insurance
carriers;
(ii) does not place restrictive covenants in its
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employment contracts that restrain a health care
practitioner from engaging in the health care
practitioner's lawful profession; and
(iii) has submitted an attestation statement to the
department and the Insurance Department certifying that
no portion of a reimbursement rate with a health
insurance carrier is subsidizing the health insurance
carrier operating as part of the same integrated delivery
network.
* * *
(d) Methodology records.--Every hospital submitting an
attestation statement in accordance with this section shall keep
all books, records, accounts, papers, documents and computer or
other recordings relating to its methodology for developing
reimbursement rates for every health insurance carrier in the
manner and for the time periods as the department, in its
discretion, may require in order that its authorized
representatives may readily verify that no portion of a
reimbursement rate is subsidizing the health insurance carrier
operating as part of the same integrated delivery network.
(e) Survey.--The department or a surveyor of the department
may conduct a survey under this section of a hospital operating
as part of an integrated delivery network as often as the
secretary, in the sole discretion of the secretary, deems
appropriate.
(f) Survey expenses.--When conducting a survey under this
section, the department may retain attorneys, independent
actuaries, independent certified public accountants or other
professionals and specialists as surveyors. All expenses
incurred in and about the survey of a hospital, including
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compensation of department or Insurance Department employees
assisting in the survey and other professionals or specialists
retained in accordance with this section shall be charged to and
paid by the hospital surveyed in the manner as the secretary
shall provide by regulation.
Section 4. The act is amended by adding a section to read:
Section 902.2. Confidentiality.
(a) Received materials.--Any insurance contracts, documents,
materials or information received by the department or Insurance
Department from a hospital for the purpose of compliance with
this act and regulations developed under this act shall be
confidential.
(b) Access.--The department may use the information under
section 806 and regulations developed under this act for the
sole purpose of a licensure or corrective action against a
health care facility.
(c) Right-to-know requests.--Any insurance contracts,
documents, materials or information made confidential under this
act shall not be subject to requests under the act of February
14, 2008 (P.L.6, No.3), known as the "Right-to-Know Law."
Section 5. This act shall take effect in 90 days.
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