PRINTER'S NO. 1605
No. 1347 Session of 2005
INTRODUCED BY BAKER, KENNEY, BENNINGHOFF, ALLEN, BALDWIN,
BIANCUCCI, BISHOP, BROWNE, BUNT, BUXTON, CALTAGIRONE,
CAPPELLI, CAUSER, CLYMER, CORNELL, CRAHALLA, CREIGHTON,
CURRY, DALLY, DENLINGER, DIVEN, FAIRCHILD, FLEAGLE,
GILLESPIE, GINGRICH, GODSHALL, GOOD, HARRIS, HESS,
HICKERNELL, HUTCHINSON, KAUFFMAN, KILLION, LEDERER, MAJOR,
McILHATTAN, MICOZZIE, MUSTIO, NICKOL, O'NEILL, PALLONE,
PETRARCA, PICKETT, REICHLEY, ROSS, SATHER, SCAVELLO,
SCHRODER, SHAPIRO, SOLOBAY, STERN, STURLA, E. Z. TAYLOR,
THOMAS, TURZAI, WATSON, WILT AND YOUNGBLOOD, APRIL 12, 2005
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
APRIL 12, 2005
AN ACT
1 Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
2 act to consolidate, editorially revise, and codify the public
3 welfare laws of the Commonwealth," further providing for
4 medical assistance payments for hospital services; and
5 creating the State Health Payment Review Board.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. The act of June 13, 1967 (P.L.31, No.21), known
9 as the Public Welfare Code, is amended by adding sections to
10 read:
11 Section 443.9. Payment Policies for Hospital Inpatient and
12 Outpatient Services.--Payment rates for services provided by
13 hospitals enrolled in the medical assistance program shall be
14 adequate to provide incentives for provider efficiency, to
15 facilitate beneficiaries' access to high-quality care and to
1 offer cost-effective care. Stability and predictability in
2 hospital payment rates are necessary for responsible and
3 effective planning and budgeting by this Commonwealth and
4 hospitals.
5 (1) Rates shall be supported by factual evidence in
6 sufficient detail to demonstrate why they are deemed reasonable.
7 (2) Rates shall be established and adjusted annually using
8 accepted and verifiable benchmarks for assessing adequacy,
9 including calculation of provider costs, comparison to rates
10 established by federally funded health care programs,
11 consideration of geographic variations across this Commonwealth
12 and relationship to providers' clinical activity.
13 (3) Rates shall be fair and equitable across and within
14 categories of hospitals so that comparable services are
15 comparably reimbursed based on resource use. Fairness and equity
16 shall be established by assuring, at a minimum, that rates
17 account for such variables as severity and complexity of
18 patients' conditions and resources required to treat them, the
19 number or percentage of indigent patients treated by providers,
20 and the hospital's health professional educational costs.
21 (4) Rates shall exclude any disproportionate share or
22 medical education payments. Disproportionate share payments
23 shall be based on the number or percentage of low-income persons
24 served by the hospital. Medical education costs shall reflect
25 the medical assistance share of actual allowable costs for
26 medical education.
27 Section 443.10. State Health Payment Review Board.--There is
28 hereby created the State Health Payment Review Board that shall
29 consist of five members who shall be appointed in accordance
30 with the following:
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1 (1) One resident appointed by the Governor who will serve as
2 chairman of the review board.
3 (2) Four residents of this Commonwealth, one of whom shall
4 be appointed by the President pro tempore of the Senate, one of
5 whom shall be appointed by the Minority Leader of the Senate,
6 one of whom shall be appointed by the Speaker of the House of
7 Representatives and one of whom shall be appointed by the
8 Minority Leader of the House of Representatives.
9 (3) All appointees shall serve terms coterminous with their
10 respective appointing authorities. Members of the review board
11 shall be chosen for their familiarity and experience with health
12 care finance, economics, delivery or law and have relevant
13 training and experience, to assist the board in performing its
14 designated functions. No person shall be chosen who is an
15 employee of this Commonwealth or of any health care provider. No
16 member shall participate in any action or decision concerning
17 any matter in which the member has an economic interest or other
18 conflict of interest. The appointing authorities shall make
19 their initial appointments within sixty days of the effective
20 date of this section.
21 (4) The review board shall hear de novo appeals on payments
22 for inpatient and outpatient hospital services.
23 (5) The Governor shall appoint counsel to serve and advise
24 the review board and shall replace such counsel upon request of
25 the board.
26 (6) Each member of the review board shall be paid travel and
27 other necessary expenses and compensation at a rate to be fixed
28 by the Executive Board, as established in the act of April 9,
29 1929 (P.L.177, No.175), known as "The Administrative Code of
30 1929."
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1 (7) Hearings before the review board.
2 (i) All hearings before the review board shall be subject to
3 the right of notice, hearing and adjudication in accordance with
4 2 Pa.C.S. Chs. 1 (relating to general provisions), 5 (relating
5 to practice and procedure) and 7 (relating to judicial review),
6 and a written record shall be kept of said proceedings and a
7 copy thereof provided to the parties at cost.
8 (ii) Persons conducting hearings under this act shall have
9 the power to subpoena witnesses and documents required for the
10 hearing, to administer oaths and examine witnesses and receive
11 evidence in any locality which the hearing body may designate,
12 having regard to the public convenience and proper discharge of
13 its functions and duties.
14 (iii) Notice of hearings before the board shall be given to
15 the parties at least twenty-one calendar days in advance of the
16 hearing.
17 (iv) Any party may request an expedited hearing, which
18 request shall not be unreasonably denied.
19 (v) The board shall make best efforts to conclude each
20 proceeding within one hundred eighty days.
21 (8) Decisions of the department regarding payment for
22 hospital services to medical assistance recipients may be
23 appealed to the review board. The appeal to the review board
24 shall be de novo, and shall be limited to issues raised by the
25 appellant in the specification of objections. Decisions of the
26 review board relating to payment rates may be appealed to the
27 Commonwealth Court as provided herein by any party to the
28 proceeding. Group appeals by hospitals shall be permitted.
29 (9) The record made on appeal to the review board shall
30 contain all of the evidence required to sustain any decisions or
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1 determinations by the department in reaching its decision. The
2 department may rely upon regulations unless the authority of the
3 department or the reasonableness of the regulations is
4 challenged. The record for determining the propriety of the
5 regulations shall be made before the review board and any
6 evidence the department may wish to introduce to establish
7 justification for the regulations shall be submitted at the
8 hearing. The review board may pass upon the reasonableness of
9 the regulation and the authority for its promulgation under this
10 act. An aggrieved party may appeal an adverse decision by the
11 review board to the Commonwealth Court and should provide notice
12 of such appeal to the review board within thirty days.
13 (10) As used in this section, the term "board" shall mean
14 the State Health Payment Review Board.
15 Section 2. This act shall take effect in 60 days.
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