PRINTER'S NO. 1541
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1172
Session of
2015
INTRODUCED BY DeLUCA, KOTIK, READSHAW, MILLARD, CALTAGIRONE,
D. MILLER, THOMAS, RAVENSTAHL, DEASY, P. COSTA, KORTZ,
D. COSTA AND COHEN, MAY 12, 2015
REFERRED TO COMMITTEE ON INSURANCE, MAY 12, 2015
AN ACT
Providing for the additional regulation and oversight of
integrated delivery networks; and conferring powers and
imposing duties on the Insurance Department.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Access to
Integrated Delivery Networks Act.
Section 2. Legislative intent.
The General Assembly finds and declares as follows:
(1) Many subscribers to health insurance plans make
payments over long periods of time prior to becoming entitled
to benefits under the plans.
(2) Many subscribers develop relationships and come to
rely on the advice and expertise of their health care
providers participating in their health insurance plan.
(3) It is in the public interest that the reasonable
expectations of the subscribers as to coverage should be
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fulfilled if possible.
(4) It is declared to be essential for the maintenance
of the health of the residents of this Commonwealth that:
(i) subscribers to a health insurance plan be
assured continued access to their health care providers
when they are in the middle of a course of treatment;
(ii) vulnerable populations continue to have access
to health care providers that are part of an integrated
delivery network, regardless of whether the health
insurance carrier has a contract with the integrated
delivery network;
(iii) subscribers to a health insurance plan be
assured access to emergency, specialized and unique
health care services offered by an integrated delivery
network;
(iv) subscribers be given sufficient time to find
new providers upon losing access to an integrated
delivery network; and
(v) to accomplish these essential purposes,
termination or expiration without renewal of a contract
between a health insurance carrier and integrated
delivery network be subject to a transition period to be
regulated by the department.
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:
"Affiliate." As defined under section 1401 of the act of May
17, 1921 (P.L.682, No.284), known as The Insurance Company Law
of 1921.
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"Commissioner." The Insurance Commissioner of the
Commonwealth.
"Department." The Insurance Department of the Commonwealth.
"Existing patient." A patient that has established a
relationship with an individual health care provider and
received treatment from the health care provider in the year
immediately preceding the termination or expiration of the
contract.
"Health care provider." A person licensed or otherwise
authorized by the Commonwealth to provide health care services,
including, but not limited to, physician, coordinated care
organization, hospital, health care facility, dentist, nurse,
optometrist, podiatrist, physical therapist, psychologist,
chiropractor or pharmacist, and an officer, employee or agent of
the person acting in the course and scope of employment or
agency related to health care services.
"Health care service." The term includes:
(1) hospitalization; and
(2) care or treatment rendered by an individual who is
employed by a hospital or a physician practice owned by a
hospital.
"Health insurance carrier." An entity that offers or issues
a health insurance plan and is subject to any of the following:
(1) the act of May 17, 1921 (P.L.682, No.284), known as
The Insurance Company Law of 1921;
(2) the act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act; or
(3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations) or Ch. 63 (relating to professional health
services plan corporations).
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"Health insurance plan." A policy, contract, certificate or
agreement offered or issued by a health insurance carrier to
provide, deliver, arrange for, pay for or reimburse the costs of
health care services. The term does not include the following
types of policies:
(1) Accident only.
(2) Limited benefit.
(3) Credit.
(4) Dental.
(5) Vision.
(6) Specified disease.
(7) Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS) supplement.
(8) Long-term care or disability income.
(9) Workers' compensation.
(10) Automobile medical payment.
"Health system." A network of health care providers that by
ownership, contract or agreement is controlled by a common
entity and consists of:
(1) at least one hospital; and
(2) at least one other health care provider.
"Hospital." An entity that is:
(1) licensed as a hospital under the act of July 19,
1979 (P.L.130, No.48), known as the Health Care Facilities
Act; and
(2) either of the following:
(i) claiming tax-exempt status under the act of
November 26, 1997 (P.L.508, No.55), known as the
Institutions of Purely Public Charity Act; or
(ii) has received funds under the act of February 9,
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1999 (P.L.1, No.1), known as the Capital Facilities Debt
Enabling Act.
"Integrated delivery network." A health system that is
closely affiliated with a specific health insurance carrier, and
owns or controls at least one hospital located in a city of the
second class.
"Specialized health services." Health care services that the
Department of Health has determined are not available from
another health care provider in the local community.
"Unique health care facility." A health care provider that
offers unique services as determined by the Department of Health
and published on an annual list of unique health care
facilities.
"Vulnerable populations." Individuals who are 65 years of
age or older, or individuals that are enrolled in or eligible
for one of the following:
(1) Medicare.
(2) Medicare Advantage.
(3) Medigap.
(4) Medicaid.
(5) The Children's Health Insurance Program.
Section 4. Access to integrated delivery networks.
In the event that an integrated delivery network terminates
or otherwise allows its contract with a health insurance carrier
to expire without renewal, the department may develop a
transition plan that shall govern the future relationship
between the integrated delivery network and the health insurance
carrier. The transition plan shall apply to all successors and
subsequent acquisitions of the parties and shall continue for a
reasonable period of time of not more than five years from the
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date it was first implemented. A department-imposed transition
plan shall include the following patient access protections:
(1) All health care services provided in an emergency or
trauma setting at an integrated delivery network shall
continue to be performed on an in-network basis and
reimbursed at in-network rates. Emergency and trauma settings
include all facility and provider services related to the
emergency or trauma episode of care, including any care
provided during a related hospital admission through the
patient's discharge.
(2) Any subscriber of a health insurance plan who is a
member of a vulnerable population may continue to access
health care services at an integrated delivery network on an
in-network basis and at in-network rates.
(3) Any subscriber of a health insurance plan may
continue to receive oncology services and specialized health
services at an integrated delivery network, on an in-network
basis and at in-network rates, if the subscriber's treating
physician deems those services necessary. This paragraph
shall apply to all treatments related to oncology and
specialized health services, including, but not limited to,
mental health, endocrinology, orthopedics and cardiology.
(4) Integrated delivery networks shall negotiate in good
faith with health insurance carriers to provide in-network
access to the integrated delivery network's unique health
care facilities. If the parties are unable to reach an
agreement on unique health care facilities, the department
may force the parties to reach an agreement through binding
arbitration. Any final agreement reached through binding
arbitration shall be for a reasonable period of time, but may
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in no case exceed the life of the transition plan.
(5) Any subscriber of a health insurance plan who is an
existing patient of a health care provider that is part of an
integrated delivery network shall have a one-year safety net.
Subscribers with a safety net may continue to have access to
their health care providers at the integrated delivery
network, on an in-network basis at in-network rates, for a
period of one year following the termination or expiration of
the contract.
(6) Any subscriber of a health insurance plan that is in
the midst of a course of treatment at an integrated delivery
network may continue to receive health care services, on an
in-network basis at in-network rates, for as long as the
patient and the patient's physician deem it necessary. The
continuing course of treatment shall apply to all health care
services reasonably related to that treatment, including, but
not limited to, testing and follow-up care.
Section 5. Powers of the department.
(a) General rule.--The department shall ensure compliance
with this act and shall investigate potential violations of this
act based upon information received from health insurance
carriers, integrated delivery networks, health care providers,
subscribers and other sources.
(b) Binding arbitration.--If an integrated delivery network
and a health insurance carrier are unable to reach an agreement
under section 4(4), the department may establish a binding
arbitration process to force an agreement.
(c) Nonrate terms and conditions.--If a dispute arises over
the terms and conditions unrelated to reimbursement rates, the
department, after a hearing, may impose nonrate terms and
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conditions necessary to ensure that patient access protections
are implemented.
(d) Rates.--In-network rates for health care services
provided under section 4, except those rates that have been
submitted to separate binding arbitration process, shall revert
to the last rates or fee schedule mutually agreed upon by the
integrated delivery network and the health insurance carrier.
The new rates and fee schedule shall include the applicable
medical market basket index increase, to be applied on January 1
of each calendar year after the commencement of the transition
plan.
(e) Examinations and investigations.--The department may
examine and investigate the affairs of each health insurance
carrier and integrated delivery network that is subject to this
act to determine whether a transition plan is necessary or
whether there has been a violation of this act. The department
may retain actuaries, attorneys, certified public accountants
and other professionals and specialists as may be necessary, in
the judgment of the department, to develop a transition plan or
conduct an investigation or examination. The fees, costs and
expenses relating to professionals and specialists retained
under this section shall be charged to and paid by the affected
integrated delivery network and other parties as directed by the
department.
(f) Regulations.--The department shall promulgate such
regulations as may be necessary to carry out the provisions of
this act.
Section 6. Enforcement.
(a) Notice.--Upon evidence of a violation of this act or a
department-imposed transition plan, the department shall notify
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the person of the alleged violation. The notice shall specify
the nature of the alleged violation and fix a time and place, at
least 10 days after the notification, when a hearing on the
matter shall be held.
(b) Hearing.--The department shall conduct the hearing on
the violation in accordance with 2 Pa.C.S. Ch. 5 Subch. A
(relating to practice and procedure of Commonwealth agencies).
(c) Penalties.--After the hearing or upon failure of the
person to appear at the hearing, if a violation is found, the
commissioner may, in addition to any penalty which may be
imposed by a court, do any combination of the following which is
deemed appropriate:
(1) Deny, suspend, revoke or refuse to renew the license
of a health insurance carrier or a health insurance carrier
that is part of an integrated delivery network.
(2) Impose a civil penalty of up to $1,000 for each day
there is a violation of this act or a department-imposed
transition plan.
(3) Impose an order to cease and desist.
(4) Assess restitution for consumers.
(5) Report violations of this act to the Department of
Health, with a recommendation to deny, suspend, revoke or
refuse to renew any license that the Department of Health has
issued to the integrated delivery network.
(6) Refer violations of this act to the Office of
Attorney General, with a recommendation that the violating
party be stripped of its tax-exempt designations.
(7) Enforce other violations of the act of May 17, 1921
(P.L.682, No.284), known as The Insurance Company Law of
1921, or the act of May 17, 1921 (P.L.789, No.285), known as
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The Insurance Department Act of 1921, as applicable.
(8) Impose any other conditions the commissioner deems
appropriate.
(d) Application of Unfair Insurance Practices Act.--A
violation of this act shall also be a violation of the act of
July 22, 1974 (P.L.589, No.205), known as the Unfair Insurance
Practices Act.
Section 7. Retroactivity.
The provisions of this act shall apply to all contract
terminations or expirations occurring on or after December 31,
2014.
Section 8. Expiration.
This act shall expire on December 31, 2019.
Section 9. Effective date.
This act shall take effect immediately.
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