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A09276
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1237
Session of
2018
INTRODUCED BY BAKER, SCHWANK, GORDNER, MENSCH, ARGALL,
EICHELBERGER, BLAKE, HUTCHINSON AND BARTOLOTTA,
AUGUST 23, 2018
REFERRED TO HEALTH AND HUMAN SERVICES, AUGUST 23, 2018
AN ACT
Establishing the Pennsylvania Rural Health Redesign Center
Authority and the Pennsylvania Rural Health Redesign Center
Fund.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Purpose.
Section 103. Definitions.
Chapter 3. Pennsylvania Rural Health Redesign Center Authority
Section 301. Scope of chapter.
Section 302. Pennsylvania Rural Health Redesign Center
Authority.
Section 303. Powers and duties.
Chapter 5. Participation in Global Budget Model
Section 501. Roles of participating payers.
Section 502. Roles of participant rural hospitals.
Chapter 7. Data Collection and Confidentiality Provisions
Section 701. Data collection and retention.
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Section 702. Confidentiality of data, contracts and agreements.
Chapter 9. Pennsylvania Rural Health Redesign Center Fund
Section 901. Establishment of fund.
Section 902. Money in fund.
Chapter 21. Miscellaneous Provisions
Section 2101. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Pennsylvania
Rural Health Redesign Center Authority Act.
Section 102. Purpose.
It is the purpose of this act to protect and promote access
by the residents of this Commonwealth to high-quality health
care in rural communities by encouraging innovation in health
care delivery.
Section 103. 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:
"Acute care hospital." A facility that provides inpatient
and outpatient services, which may include an emergency
department or intensive care unit.
"Authority." The Pennsylvania Rural Health Redesign Center
Authority established in section 302.
"Board." The governing body of the authority.
"Conflict of interest." A situation in which a board member:
(1) has a financial an interest in one or more parties
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involved in an action under section 303; and
(2) may have gain access to competitively sensitive or
strategically relevant information about a participating
payer or participant rural hospital.
"Critical access hospital." As defined in section 1861(mm)
(1) of the Social Security Act (49 Stat. 620, 42 U.S.C. §
1395x(mm)(1)).
"Department." The Department of Health of the Commonwealth.
"Eligible hospital services." All inpatient and hospital-
based outpatient items and services. The term shall exclude all
other items and services, including the following:
(1) Postacute care.
(2) Professional services.
(3) Durable medical equipment.
(4) Dental services.
(5) Noninpatient or non-hospital-based outpatient
behavioral health services.
(6) Long-term care services, except for swing bed
services for critical access hospitals.
"Fund." The Pennsylvania Rural Health Redesign Center Fund
established in section 901.
"Global budget." The prospectively set annual budget that is
the basis for payment for each participant rural hospital for
eligible hospital services by participating payers.
"Global budget model." An innovative payment and service
delivery model that is intended to reduce health care costs
while maintaining access to care, improving the quality of care
in rural counties and meeting the health needs of participant
rural hospitals' local communities, and under which
participating payers pay participant rural hospitals using a
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global budget methodology established by the authority.
"Government program." A health benefit plan offered or
administered by or on behalf of the United States or the
Commonwealth or an agency or instrumentality of either of them,
including:
(1) The medical assistance program established under the
act of June 13, 1967 (P.L.31, No.21), known as the Human
Services Code.
(2) The children's health insurance program established
under Article XXIII-A of the act of May 17, 1921 (P.L.682,
No.284), known as The Insurance Company Law of 1921.
(3) A health benefit plan offered or administered by or
on behalf of the Commonwealth or an agency or instrumentality
of the Commonwealth.
(4) Health care benefits administered under 10 U.S.C.
(relating to armed forces) or 38 U.S.C. (relating to
veterans' benefits).
(5) The Medicare program established under Title XVIII
of the Social Security Act (42 U.S.C. § 1395 et seq.).
"Insurer." A person, corporation or other entity licensed by
the Commonwealth with authority to offer, issue or renew an
insurance policy, subscriber contract or certificate providing
health care coverage, including:
(1) An insurance company, association or exchange
governed by The Insurance Company Law of 1921, including
section 630 and Article XXIV of The Insurance Company Law of
1921.
(2) A hospital plan corporation as defined in 40 Pa.C.S.
Ch. 61 (relating to hospital plan corporations).
(3) A professional health service corporation as defined
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in 40 Pa.C.S. Ch. 63 (relating to professional health
services plan corporations).
(4) A health maintenance organization governed by the
act of December 29, 1972 (P.L.1701, No.364), known as the
Health Maintenance Organization Act.
"Medicaid managed care organization." An entity as defined
in section 1903(m)(1)(A) of the Social Security Act (42 U.S.C. §
1396b(m)(1)(A)) that is a party to an agreement with the
Department of Human Services, including a county Medicaid
managed care organization and a permitted assignee of an
agreement. The term does not include an assignor of an
agreement.
"Participant rural hospital." A rural hospital that has been
selected and signs an agreement to participate in the global
budget model.
"Participating payer." A payer that operates in rural
counties and, with respect to one or more specified products,
programs or payment arrangements, signs an agreement with the
authority to participate in the global budget model.
"Payer." An insurer, government program or Medicaid managed
care organization that pays or administers payment for health
care services under an insurance policy, subscriber contract,
certificate, administrative services arrangement or other
payment arrangement.
"Rural county." A county within this Commonwealth where the
population density is less than 284 persons per square mile as
defined by the Center for Rural Pennsylvania, established in
section 301 of the act of June 30, 1987 (P.L.163, No.16), known
as the Rural Pennsylvania Revitalization Act.
"Rural hospital." An acute care hospital or critical access
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hospital located in a rural county.
"Rural hospital transformation plan." A description of the
health care delivery system transformation that a participant
rural hospital will undergo under the global budget model, as
approved by the board and the Federal Government.
"Secretary." The Secretary of Health of the Commonwealth.
"Swing bed." A hospital bed that has been approved by the
Medicare program established under Title XVIII of the Social
Security Act to provide posthospital skilled nursing facility
care when the rural hospital participates in the Medicare
program.
CHAPTER 3
PENNSYLVANIA RURAL HEALTH REDESIGN CENTER AUTHORITY
Section 301. Scope of chapter.
This chapter relates to the Pennsylvania Rural Health
Redesign Center Authority.
Section 302. Pennsylvania Rural Health Redesign Center
Authority.
(a) Establishment.--The Pennsylvania Rural Health Redesign
Center Authority is established as a body corporate and politic
constituting a public corporation and government
instrumentality. The powers and duties of the authority shall be
vested in and exercised by the board, which shall have the sole
power to employ staff, including an executive director, legal
counsel, consultants or any other staff deemed necessary by the
board to effectuate the purposes of this act. Individuals
employed by the board shall not be employees of the Commonwealth
for any purpose, including for purposes of compensation, pension
benefits or retirement.
(b) Composition.--The board shall consist of the following
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members:
(1) The secretary or a designee, who shall be an
employee of the department designated in writing prior to
service.
(2) The Secretary of Human Services or a designee, who
shall be an employee of the Department of Human Services
designated in writing prior to service.
(3) The Insurance Commissioner or a designee, who shall
be an employee of the Insurance Department designated in
writing prior to service.
(4) One member selected collectively by each
participating payer that is an insurer, together with its
parents, affiliates, subsidiaries, other associated entities
and the successors of any of them, but excluding any
affiliated, subsidiary or otherwise associated Medicaid
managed care organizations.
(5) One member selected by each participating payer that
is a Medicaid managed care organization.
(4) Each participating payer that is an insurer shall
select one member on behalf of the participating payer and
the participating payers parents, affiliates, subsidiaries,
other associated entities and successors. The selection under
this paragraph shall exclude any affiliated, subsidiary or
otherwise associated Medicaid managed care organization.
(5) Each participating payer that is a Medicaid managed
care organization shall select one member.
(6) One member selected by the organization representing
hospitals and health systems in this Commonwealth. This
member shall be considered a participant rural hospital
member on the board.
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(7) Participant rural hospital members, the number of
which shall not exceed the number of participating payer
members. The participant rural hospital members shall
represent the participant rural hospitals and shall be
selected from different, geographically diverse participant
rural hospitals, and appointed as follows:
(i) The President pro tempore of the Senate, the
Minority Leader of the Senate, the Speaker of the House
of Representatives and the Minority Leader of the House
of the Representatives shall each appoint one member.
(ii) The Governor shall appoint the remaining
members.
(8) Two members who are nationally recognized experts in
rural health care delivery or in developing and administering
global budgets who shall be appointed by the Governor.
(c) Terms.--The terms of the members of the board shall be
as follows:
(1) The terms of the members specified under subsection
(b)(1), (2) and (3) shall be concurrent with their holding of
public office.
(2) The board members specified in subsection (b)(4),
(5), (6), (7) and (8) shall serve for a term of four years
and shall not be eligible to serve more than two full
consecutive four-year terms. If a member leaves the board
prior to completing a four-year term due to change in
professional status, including, but not limited to,
retirement, changing jobs, failure to qualify or similar
reasons, a new member shall be appointed or selected within
60 days of the seat becoming vacant.
(d) Quorum.--A majority of the appointed members of the
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board shall constitute a quorum. Action may be taken by the
board at a meeting upon a vote of a quorum of its members
present in person or through electronic means. If a tie vote
occurs at any meeting, it shall be the duty of the chairperson
of the board to cast the deciding vote.
(e) Meetings.--The board shall meet at the call of the
chairperson or as may be provided in the bylaws of the board.
The board shall hold meetings at least quarterly, which shall be
subject to the requirements of 65 Pa.C.S. Ch. 7 (relating to
open meetings).
(f) Chairperson.--The Governor shall appoint a chairperson
from among the board members.
(g) Formation.--The board shall be formed within 90 days of
the effective date of this section.
(h) Conflict of interest.--Board members shall recuse
themselves from discussions and actions where a conflict of
interest may occur. Board members may not receive confidential
information, data or material related to an entity where a
conflict of interest may occur.
Section 303. Powers and duties.
(a) General rule.--The board shall exercise all powers
necessary and appropriate to carry out its duties, including the
following:
(1) Adopt bylaws necessary to carry out the provisions
of this act. The bylaws must include a provision addressing
conflict of interest as well as a provision that restricts
board discussions and decisions to the administration of the
global budget model as provided under subsection (b).
(2) Make, execute and deliver contracts, grants and
other instruments necessary or convenient to exercise the
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powers and duties of the board.
(3) Apply for, solicit, receive, establish priorities
for, allocate, disburse, contract or grant for, administer
and expend money in the fund and other money made available
to the authority from any other source consistent with the
purpose of this act. The authority shall be exempt from the
provisions of 62 Pa.C.S. Pts. I (relating to Commonwealth
Procurement Code) and II (relating to general procurement
provisions).
(4) Apply for, accept and administer grants and loans to
carry out the purposes of the authority.
(5) Accept money from both public and private sources,
consistent with Federal and State law.
(6) Take, hold, administer, assign, lend, encumber,
mortgage, invest or otherwise dispose of, at public or
private sale, on behalf of the authority and for any of the
authority's purposes, real property, personal property and
money or any interest therein, including any mortgage or loan
interest owned by the authority or under its control or in
its possession and the income therefrom either absolutely or
in trust. The following apply:
(i) The board may acquire property or money for such
purpose by purchase or lease and by the acceptance of
gifts, grants, bequests, devises or loans, but no
obligation of the authority shall be a debt of the
Commonwealth, and the authority shall have no power to
pledge the credit or taxing power of the Commonwealth nor
to make its debts payable out of any money except those
of the corporation. This paragraph is not intended to
mean that the board may acquire rural hospitals or
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participant rural hospitals.
(ii) All accrued and future earnings from money
invested by the board and such other accrued and future
nonappropriated funds, including, but not limited to,
those funds obtained from the Federal Government and
contributions, shall be available to the authority and
shall be deposited in the State Treasury and may be
utilized at the discretion of the board for carrying out
any of the corporate purposes of the authority. Any
placement of the funds by the State Treasurer in
depositories or investments shall be consistent with
guidelines approved by the board. For the purpose of
administration, the authority shall be subject to
sections 610, 613 and 614 of act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of
1929.
(7) Seek waivers from State agency requirements as
necessary to carry out the purposes of this act.
(8) Coordinate with the appropriate State agency to seek
waivers from Federal requirements as necessary to carry out
the purposes of this act.
(9) Establish advisory groups with a diverse membership
representing interested and affected groups and individuals
as the board finds necessary to carry out the purposes of
this act.
(10) Collaborate with all applicable State agencies for
purposes of implementing this act.
(11) Perform all other activities necessary to further
the purposes of this act.
(b) Global budget model.--The board is responsible for
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administering the global budget model and shall:
(1) Evaluate and select rural hospitals for
participation in the global budget model as a participant
rural health hospital on the basis of diversity, vision and
commitment to health care delivery transformation.
(2) Provide technical assistance, training and education
to rural hospitals and participant rural hospitals.
(3) Collect and maintain data from rural hospitals and
participant rural hospitals, participating payers and others
as necessary to carry out the responsibilities of this act.
(4) Perform data analysis and quality assurance.
(5) Calculate, approve and administer global budgets.
The global budget may include payments for eligible hospital
services provided under a participant rural hospital's
employee health plan.
(6) Consistent with Federal and State law, review and
approve rural hospital transformation plans, advise and
approve changes to operational and payment mechanisms and
approve exceptions to agreed-upon payment rules through an
approved procedure set forth in the board's bylaws.
(7) Review and approve any participant rural hospital
investments outside the global budget.
(8) (7) Assist rural hospitals and participant rural
hospitals in working with community-based organizations to
determine the targeted population health improvement goals.
(9) (8) Evaluate the progress of the implementation of
each participant rural hospital's global budget toward
population health improvement goals and the cost of achieving
health care goals.
(10) (9) Monitor global budgets and quality metrics for
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participant rural hospitals.
(11) (10) Provide an annual assessment of each
participant rural hospital's compliance with its rural
hospital transformation plan and global budget targets.
(12) (11) Require a participant rural hospital to submit
a corrective action plan for failure to submit a rural
hospital transformation plan, comply with its rural hospital
transformation plan or meet its global budget targets.
(13) (12) Terminate a participant rural hospital from
the global budget model in accordance with the participant
rural hospital's participation agreement.
(14) (13) Contract with an independent evaluation group
to provide the board and executive director with an
evaluation of the global budget model's progress in the areas
of population health, quality of care and cost targets.
(15) (14) Review and update the definition of "eligible
hospital services" by publishing a notice in the Pennsylvania
Bulletin, subject to obtaining all necessary Federal
approvals. The board shall use data collected under paragraph
(3) in its review.
(c) Audit.--
(1) The accounts and books of the authority shall be
examined and audited annually by an independent certified
public accounting firm. The audit shall be public
information.
(2) The authority shall, by December 31 of each year,
file a copy of the audit of the preceding Commonwealth fiscal
year required under paragraph (1) with the Secretary of the
Senate and the Chief Clerk of the House of Representatives
and provide a copy to the department.
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(d) Reports.--The authority shall:
(1) Submit Electronically submit an annual report on the
performance and compliance of each participant rural hospital
to the department and to other appropriate parties, including
associations, foundations, academic institutions and
community-based organizations, as determined by the board.
(2) Submit Electronically submit an annual report to the
Governor, the President pro tempore of the Senate and the
Speaker of the House of Representatives for distribution to
the Health and Human Services Committee of the Senate and the
Health Committee of the House of Representatives on the
activities of the authority for the year.
(3) Comply with applicable Federal reporting
requirements.
(e) Compensation and expenses.--The members of the board
shall not receive a salary or per diem allowance for serving as
members of the board but shall be reimbursed for actual and
necessary expenses incurred in the performance of their duties.
Reasonable expenses may include reimbursement of travel and
living expenses while engaged in board business. The expenses
shall be paid for by the fund.
(f) Publication.--The authority shall annually submit a
financial statement and the authority's audit to the Legislative
Reference Bureau for publication in the Pennsylvania Bulletin.
CHAPTER 5
PARTICIPATION IN GLOBAL BUDGET MODEL
Section 501. Roles of participating payers.
(a) Letter of interest.--A payer may submit a letter of
interest to the authority to participate in the global budget
model.
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(b) Agreement to participate.--As a condition of
participation, a participating payer shall sign an agreement
with the authority. The agreement must detail the terms and
conditions of participation in the global budget model.
(c) Termination.--A participating payer may terminate its
participation with a participant rural hospital according to the
terms and conditions of the agreement under subsection (b).
Section 502. Roles of participant rural hospitals.
(a) Letter of interest.--A rural hospital may submit a
letter of interest to the authority to participate in the global
budget model.
(b) Condition of participation.--As a condition of
participation, the following shall occur:
(1) A rural hospital shall submit an initial rural
hospital transformation plan in the manner and form
prescribed by the authority for review and approval.
(2) A participant rural hospital shall sign an agreement
with the authority. The agreement must detail the terms and
conditions of participation in the global budget model.
(3) A participant rural hospital shall submit annual
updates to its rural hospital transformation plan in the
manner and form prescribed by the authority for review and
approval.
CHAPTER 7
DATA COLLECTION AND CONFIDENTIALITY PROVISIONS
Section 701. Data collection and retention.
(a) Authority.--The authority may collect and analyze data
from participating payers, rural hospitals, participant rural
hospitals and the Department of Human Services necessary to
carry out the authority's responsibilities under this act,
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including the data needed to develop global budgets, create
rural hospital transformation plans and submit reports regarding
monitoring and oversight of the global budget model. Data
collected by the authority shall only be used for administering
the global budget model. The authority must obtain the written
approval of a participating payer, rural hospital, participant
rural hospital or the Department of Human Services before the
authority can use the entity's data for any other purpose. The
authority shall retain the data for no more than seven years.
(b) Participant rural hospital.--A participant rural
hospital may authorize its insurer or administrator to provide
data to the authority regarding payments for eligible hospital
services provided under the hospital's employee health plan.
(c) Release of data.--Unless specifically provided for in
this act, the authority may not release and no data source,
person, member of the public or other user of any data of the
authority may gain access to:
(1) Raw data which could reasonably be expected to
reveal the identity of an individual patient.
(2) Raw data disclosing discounts or allowances between
participating payers and participant rural hospitals which is
prejudicial to an individual participating payer or
participant rural hospital.
(3) Data which the Department of Human Services provides
to the authority, unless the Secretary of Human Services or
the designee of the Secretary of Human Services specifically
authorizes the release or access.
(4) Any data where a conflict of interest occurs.
Section 702. Confidentiality of data, contracts and agreements.
(a) Right-to-Know Law inapplicable.--Any contract or
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agreement between participating payers and participant rural
hospitals or any data, including patient data, provided by a
participating payer, a participant rural hospital, including a
participant rural hospital's insurer or administrator, a rural
hospital or the Department of Human Services to the authority
and maintained by the authority for the purposes of carrying out
the requirements of this act shall be confidential and shall not
be subject to the act of February 14, 2008 (P.L.6, No.3), known
as the Right-to-Know Law, or discoverable or admissible as
evidence in any civil, criminal or administrative action or
proceeding.
(b) Authority access to data.--Nothing in this section shall
prohibit the authority from accessing the data to carry out its
responsibilities in accordance with law.
(c) Release of data.--Data provided to the Centers for
Medicare and Medicaid Services, or any other entity, by the
authority shall be provided consistent with applicable laws and
regulations, including the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191, 110 Stat. 1936),
the Health Information Technology for Economic and Clinical
Health Act (Public Law 111-5, 123 Stat. 226-279 and 467-496) and
implementing regulations, to the extent allowed by law and
written agreements between the authority and each participating
payer and participant rural hospital.
CHAPTER 9
PENNSYLVANIA RURAL HEALTH REDESIGN CENTER FUND
Section 901. Establishment of fund.
The Pennsylvania Rural Health Redesign Center Fund is
established as a separate fund in the State Treasury. The fund
shall be administered by the authority.
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Section 902. Money in fund.
All money deposited into the fund shall be held for the
purposes of the authority and may not be considered a part of
the General Fund but shall be used only to effectuate the
purposes of this act as determined by the authority. All
interest earned from the investment or deposit of money
accumulated in the fund shall be deposited in the fund for the
same use. Any money that is required to be returned to the
authority for any reason by any party shall be deposited in the
fund for the same use.
CHAPTER 21
MISCELLANEOUS PROVISIONS
Section 2101. Effective date.
This act shall take effect in 180 days.
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