PRINTER'S NO. 1829
No. 1506 Session of 1997
INTRODUCED BY SURRA, VEON, THOMAS, MANDERINO, WALKO, GEORGE,
BELARDI, SATHER, MUNDY, ROONEY, HALUSKA, McCALL, CAPPABIANCA,
YOUNGBLOOD, CASORIO, BLAUM, CURRY, ITKIN, BEBKO-JONES,
SHANER, MELIO, OLASZ, LAUGHLIN, DeLUCA, SCRIMENTI, PRESTON,
JOSEPHS, MIHALICH, PETRARCA, BOSCOLA, WASHINGTON, GIGLIOTTI,
STEELMAN, TRICH, A. H. WILLIAMS AND M. COHEN, MAY 14, 1997
REFERRED TO COMMITTEE ON INSURANCE, MAY 14, 1997
AN ACT
1 Amending the act of December 29, 1972 (P.L.1701, No.364),
2 entitled "An act providing for the establishment of nonprofit
3 corporations having the purpose of establishing, maintaining
4 and operating a health service plan; providing for
5 supervision and certain regulations by the Insurance
6 Department and the Department of Health; giving the Insurance
7 Commissioner and the Secretary of Health certain powers and
8 duties; exempting the nonprofit corporations from certain
9 taxes and providing penalties," further providing for
10 definitions; providing for an availability and accessibility
11 bill of rights; and making editorial changes.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Sections 1 and 2 of the act of December 29, 1972
15 (P.L.1701, No.364), known as the Health Maintenance Organization
16 Act, amended December 19, 1980 (P.L.1300, No.234), are amended
17 to read:
18 Section 1. Short Title.--This act shall be known and may be
19 cited as the "[Health Maintenance Organization] Managed Care
20 Plan Act."
1 Section 2. Purpose.--The purpose of this act is to permit
2 and encourage the formation and regulation of [health
3 maintenance organizations] managed care plans and to authorize
4 the Secretary of Health to provide technical advice and
5 assistance to corporations desiring to establish, operate and
6 maintain [a health maintenance organization] managed care plans
7 to the end that increased competition and consumer choice
8 offered by diverse [health maintenance organizations] managed
9 care plans can constructively serve to advance the purposes of
10 quality assurance, cost-effectiveness and access.
11 Section 2. The definition of "direct provider" in section 3
12 of the act, amended December 19, 1980 (P.L.1300, No.234), is
13 amended and the section is amended by adding definitions to
14 read:
15 Section 3. Definitions.--As used in this act:
16 * * *
17 "Clinical peer" or "peer" means a physician or other health
18 care professional who holds a nonrestricted license in this
19 Commonwealth or another state and in the same or similar
20 specialty as typically manages the medical condition, procedure
21 or treatment under review.
22 * * *
23 "Department" means the Department of Health of the
24 Commonwealth.
25 "Direct provider" means an individual who is a direct
26 provider of health care services under a benefit plan of a
27 [health maintenance organization] managed care plan or an
28 individual whose primary current activity is the administration
29 of health facilities in which such care is provided. An
30 individual shall not be considered a direct provider of health
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1 care solely because the individual is a member of the governing
2 body of a health-related organization.
3 "Direct services ratio" means the ratio between an
4 organization's medical revenues and medical expenses.
5 "Emergency" means a medical emergency.
6 "Enrollee" or "subscriber" means a person covered by a health
7 insurance policy or managed care plan including a person who is
8 covered as an eligible dependent of another person.
9 "Grievance" means a complaint made by or on behalf of a
10 subscriber. The term includes:
11 (1) a determination by a managed care plan or its designated
12 utilization review organization or by any health care
13 professional or health care facility affiliated with or acting
14 under arrangement with the plan, that an admission, availability
15 of care, continued stay or other health care service reviewed
16 does not meet the plan's requirements for medical necessity,
17 appropriateness, health care setting, level of care or
18 effectiveness and that, the requested service is therefore
19 denied, reduced or terminated;
20 (2) the availability, delivery or quality of health care
21 services, including delay, timing or location of services,
22 appropriate skill level of health care professional, denial of
23 coverage for emergency and related services or any other managed
24 care plan action or policy which hinders the receipt of covered
25 health care services;
26 (3) claims payment, handling or reimbursement for health
27 care services; or
28 (4) matters pertaining to the contractual relationship
29 between a covered person and a managed care plan.
30 * * *
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1 "Health outcomes" means:
2 (1) the results of treatment adjusted for severity for
3 patients seeking treatment;
4 (2) the recurrence of treatment; and
5 (3) the treatment received which is indicative of the
6 possible lack of treatment of a less severe but related health
7 problem.
8 "Managed care plan" or "plan" means a system pursuant to
9 which health care, related equipment or services are provided
10 for members or subscribers whose access to other health care
11 must be approved by a primary care practitioner selected by or
12 for such member or subscriber from a panel of participating
13 practitioners. The term includes, but is not limited to, health
14 maintenance organizations and preferred provider organizations.
15 "Medical audit" means an onsite review of the quality of care
16 being provided and the effectiveness of the quality assurance of
17 the managed care plan.
18 "Medical emergency" means the initial treatment of a sudden,
19 unexpected onset of a medical condition or traumatic injury, but
20 does not include treatment for an occupational injury for which
21 benefits are provided under any workers' compensation law or
22 occupational disease law. The symptoms or injury must be of
23 sufficient severity that a prudent layperson would seek
24 immediate attention.
25 "Medical expenses" means the cost of providing health care
26 services.
27 "Medical revenues" means the income generated from providing
28 health care services.
29 "Medically necessary" means treatment which is reasonable and
30 necessary for the diagnosis or treatment of illness or injury or
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1 to improve the functioning of a malformed body member. Treatment
2 is considered reasonable and necessary if it is safe, effective
3 and appropriate. The term does not include experimental or
4 investigational treatment.
5 "Preferred provider organization" means a health care benefit
6 arrangement designed to supply services at a reasonable cost
7 through incentives for enrollees to use designated health care
8 providers, and in which:
9 (1) patients pay more to use services rendered by health
10 care providers who are not part of the organization's network;
11 and
12 (2) health care providers expect to benefit through
13 increased patient volume and prompt payment, in return for the
14 health care providers' agreement to abide by a fee schedule and
15 follow utilization management procedures.
16 "Primary care provider" means a health care professional who
17 is designated by a managed care plan to supervise, coordinate,
18 or provide initial care or continuing care to a subscriber, and
19 who may be required by the plan to initiate a referral for
20 specialty care and to maintain supervision of the health care
21 services rendered to the subscriber. The term includes a
22 physician, a gynecologist, a pediatrician, an obstetrician or
23 other licensed health care specialist.
24 "Risk-assuming preferred provider organization" means a
25 preferred provider organization which has one or more of the
26 following characteristics:
27 (1) Assumption by the preferred provider organization of
28 financial risk arising out of contractual liability to pay for
29 or reimburse enrollees for covered health care services.
30 (2) Participation in financial gains or losses of a health
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1 benefits plan based on aggregate measures of expenditures or
2 utilization.
3 (3) Participation in the overall financial risk of a health
4 benefits plan by placing upper limits on future premium
5 increases.
6 (4) Other characteristics which create a financial risk to
7 the preferred provider organization and arise out of the
8 preferred provider arrangement.
9 The term does not include a third-party administrator, or a
10 licensed insurer, when functioning solely as a third-party
11 administrator.
12 * * *
13 Urgent care services" means those health care services that
14 are appropriately provided for an unforeseen condition of a kind
15 that usually requires medical attention without delay but that
16 does not pose a threat to the life, limb or permanent health of
17 the injured or ill person, without regard to where these
18 services are provided, and that may include services provided
19 out of a managed care plan's approved service area pursuant to
20 indemnity payments or plan contracts.
21 Section 3. Sections 4, 5.1, 6.1, 7, 8, 9 and 10 of the act,
22 amended or added December 19, 1980 (P.L.1300, No.234), are
23 amended to read:
24 Section 4. Services Which Shall be Provided.--(a) Any law
25 to the contrary notwithstanding, any corporation may establish,
26 maintain and operate a [health maintenance organization] managed
27 care plan upon receipt of a certificate of authority to do so in
28 accordance with this act.
29 (b) Such [health maintenance organizations] managed care
30 plans shall:
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1 (1) Provide either directly or through arrangements with
2 others, basic health services to individuals enrolled;
3 (2) Provide either directly or through arrangements with
4 other persons, corporations, institutions, associations or
5 entities, basic health services; [and]
6 (3) Provide physicians' services (i) directly through
7 physicians who are employes of such organization, (ii) under
8 arrangements with one or more groups of physicians (organized on
9 a group practice or individual practice basis) under which each
10 such group is reimbursed for its services primarily on the basis
11 of an aggregate fixed sum or on a per capita basis, regardless
12 of whether the individual physician members of any such group
13 are paid on a fee-for-service or other basis or (iii) under
14 similar arrangements which are found by the secretary to provide
15 adequate financial incentives for the provision of quality and
16 cost-effective care.
17 Section 5.1. Certificate of Authority.--(a) Every
18 application for a certificate of authority under this act shall
19 be made to the commissioner and secretary in writing and shall
20 be in such form and contain such information as the regulations
21 of the Departments of Insurance and Health may require.
22 (b) A certificate of authority shall be jointly issued by
23 order of the commissioner and secretary when:
24 (1) The secretary has found and determined that the
25 applicant:
26 (i) has demonstrated the potential ability to assure both
27 availability and accessibility of adequate personnel and
28 facilities in a manner [enhancing] assuring availability,
29 accessibility, quality of care and continuity of services in
30 accordance with section 10.1 of this act;
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1 (ii) has arrangements for an ongoing quality of health care
2 assurance program; and
3 (iii) has appropriate mechanisms whereby the [health
4 maintenance organization] managed care plan will effectively
5 provide or arrange for the provision of basic health care
6 services on a prepaid basis; and
7 (2) The commissioner has found and determined that the
8 applicant has a reasonable plan to operate the [health
9 maintenance organization] managed care plan in a financially
10 sound manner and is reasonably expected to meet its obligations
11 to enrollees and prospective enrollees. In making this
12 determination, the commissioner may consider:
13 (i) The adequacy of working capital and funding sources.
14 (ii) Arrangements for insuring the payment of the cost of
15 health care services or the provision for automatic
16 applicability of an alternative coverage in the event of
17 discontinuance of the [health maintenance organization] managed
18 care plan.
19 (iii) Any agreement with providers of health care services
20 whereby they assume financial risk for the provision of services
21 to subscribers.
22 (iv) Any deposit of cash, or guaranty or maintenance or
23 minimum restricted reserves which the commissioner, by
24 regulation, may adopt to assure that the obligations to
25 subscribers will be performed.
26 (c) Within ninety days of receipt of a completed application
27 for a certificate of authority, the commissioner and secretary
28 shall jointly either:
29 (1) approve the application and issue a certificate of
30 authority; or
19970H1506B1829 - 8 -
1 (2) disapprove the application [specifying] and specify in
2 writing the reasons for such disapproval. Any disapproval of an
3 application may be appealed in accordance with Title 2 of the
4 Pennsylvania Consolidated Statutes (relating to administrative
5 law and procedure).
6 Section 6.1. Foreign [Health Maintenance Organizations]
7 Managed Care Plans.--(a) A [health maintenance organization]
8 managed care plan approved and regulated under the laws of
9 another state may be authorized by issuance of a certificate of
10 authority to operate or do business in this Commonwealth by
11 satisfying the commissioner and the secretary that it is fully
12 and legally organized under the laws of [its] the other state,
13 and that it complies with all requirements for [health
14 maintenance organizations] managed care plans organized within
15 the Commonwealth.
16 (b) The commissioner and the secretary may waive or modify
17 the provisions of this act under which they have the authority
18 to act if they determine that the same are not appropriate to a
19 particular [health maintenance organization] managed care plan
20 of another state, that such waiver or modification will be
21 consistent with the purposes and provisions of this act, and
22 that it will not result in unfair discrimination in favor of the
23 [health maintenance organization] managed care plan of another
24 state.
25 (c) The commissioner and the secretary are hereby authorized
26 and directed to develop with other states reciprocal licensing
27 agreements concerning the licensure of [health maintenance
28 organizations] managed care plans which permit the commissioner
29 and the secretary to accept audits, inspections and reviews of
30 agencies from other states to determine whether [health
19970H1506B1829 - 9 -
1 maintenance organizations] managed care plans licensed in other
2 states meet Commonwealth requirements.
3 Section 7. Board of Directors.--A corporation receiving a
4 certificate of authority to operate a [health maintenance
5 organization] managed care plan under the provisions of this act
6 shall be organized in such a manner that assures that at least
7 one-third of the membership of the board of directors of the
8 [health maintenance organization] managed care plan will be
9 subscribers of the [organization] plan. The board of directors
10 shall be elected in the manner stated in the corporation's
11 charter or bylaws.
12 Section 8. Contracts with Practitioners, Hospitals,
13 Insurance Companies, Etc.--(a) Contracts enabling [the] a
14 corporation to provide the services authorized under section 4
15 of this act made with hospitals and practitioners of medical,
16 dental and related services shall be filed with the secretary.
17 The secretary shall have power to require immediate
18 renegotiation of such contracts whenever he determines that they
19 provide for excessive payments, or that they fail to include
20 reasonable incentives for cost control, or that they otherwise
21 substantially and unreasonably contribute to escalation of the
22 costs of providing health care services to subscribers, or that
23 they are otherwise inconsistent with the purposes of this act.
24 (b) A [health maintenance organization] managed care plan
25 may reasonably contract with any individual, partnership,
26 association, corporation or organization for the performance on
27 its behalf of other necessary functions including, but not
28 limited to, marketing, enrollment, and administration, and may
29 contract with an insurance company authorized to do an accident
30 and health business in this State or a hospital plan corporation
19970H1506B1829 - 10 -
1 or a professional health service corporation for the provision
2 of insurance or indemnity or reimbursement against the cost of
3 health care services provided by the [health maintenance
4 organization] managed care plan as it deems to be necessary.
5 Such contracts shall be filed with the commissioner.
6 Section 9. Right to Serve or Benefits When Outside the
7 State.--If a subscriber entitled to services provided by the
8 corporation necessarily incurs expenses for such services while
9 outside the service area, the [health maintenance organization]
10 managed care plan to which the person is a subscriber may, in
11 its discretion and if satisfied both as to the necessity for
12 such services and that it was such as the subscriber would have
13 been entitled to under similar circumstances in the service
14 area, reimburse the subscriber or pay on his behalf all or part
15 of the reasonable expenses incurred for such services. Such
16 decision for reimbursement shall be subject to review by the
17 commissioner at the request of a subscriber.
18 Section 10. Supervision.--(a) Except as otherwise provided
19 in this act, a [health maintenance organization] managed care
20 plan operating under the provisions of this act shall not be
21 subject to the laws of this State now in force relating to
22 insurance corporations engaged in the business of insurance nor
23 to any law hereafter enacted relating to the business of
24 insurance unless such law specifically and in exact terms
25 applies to such [health maintenance organization] plan. For a
26 [health maintenance organization] managed care plan established,
27 operated and maintained by a corporation, this exemption shall
28 apply only to the operations and subscribers of the [health
29 maintenance organization] plan.
30 (b) All [health maintenance organizations] managed care
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1 plans shall be subject to the following insurance laws:
2 (1) The act of July 22, 1974 (P.L.589, No.205), known as the
3 "Unfair Insurance Practices Act."
4 (2) Any rehabilitation, liquidation or conservation of a
5 [health maintenance organization] managed care plan shall be
6 deemed to be the rehabilitation, liquidation or conservation of
7 an insurance company and shall be conducted under the
8 supervision of the commissioner pursuant to the law governing
9 the rehabilitation, liquidation, or conservation of insurance
10 companies.
11 (c) (1) All rates charged subscribers or groups of
12 subscribers by a [health maintenance organization] managed care
13 plan and the form and content of all contracts between a [health
14 maintenance organization] plan and its subscribers or groups of
15 subscribers, all rates of payment to hospitals made by a [health
16 maintenance organization] plan pursuant to contracts provided
17 for in this act, budgeted acquisition costs in connection with
18 the solicitation of subscribers, and the certificates issued by
19 a [health maintenance organization] plan representing its
20 agreements with subscribers shall, at all times, be on file with
21 the commissioner and be deemed approved unless explicitly
22 rejected within sixty days of filing.
23 (2) Filings under this subsection shall be [made] submitted
24 to the commissioner in such form, and shall set forth such
25 information as the commissioner may require to carry out the
26 provisions of this act. Any disapproval of a filing by the
27 commissioner may be appealed in accordance with Title 2 of the
28 Pennsylvania Consolidated Statutes (relating to administrative
29 law and procedure).
30 (d) Solicitors or agents compensated directly or indirectly
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1 by any corporation subject to the provisions of this act shall
2 meet such prerequisites as the commissioner by regulation shall
3 require.
4 (e) A [health maintenance organization] managed care plan
5 shall establish and maintain a grievance resolution system
6 satisfactory to the secretary, whereby the complaints of its
7 subscribers may be acted upon promptly and satisfactorily.
8 (f) If a [health maintenance organization] managed care plan
9 offers eye care which is within the scope of the practice of
10 optometry, it shall make optometric care available to its
11 subscribers, and shall make the same reimbursement whether the
12 service is provided by an optometrist or a physician.
13 Section 4. The act is amended by adding sections to read:
14 Section 10.1. Availability and Accessibility Bill of
15 Rights.--(a) A managed care plan shall cover health emergency
16 services and urgent care services without authorization,
17 regardless of provider or facility.
18 (b) A managed care plan shall include a sufficient number
19 and type of primary care practitioners, specialists and
20 hospitals throughout the services area to meet the needs of
21 enrollees and to ensure reasonable choice. The mix of providers
22 shall meet the needs of enrollee population adjusted for
23 characteristics including, but not limited to, age, gender and
24 health status. At a minimum, the plan shall have one full-time
25 primary care physician per 1,200 enrollees.
26 (c) A managed care plan shall permit subscribers to change
27 primary care providers at any time upon notice to the plan. The
28 plan may not require more than fifteen days' prior notice.
29 (d) A managed care plan shall develop and implement a
30 procedure for subscribers with specific conditions to receive a
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1 standing referral from their primary care provider to a
2 specialist with expertise in treating the condition. A standing
3 referral may be authorized by the primary care provider if the
4 subscriber requires continuing care from a specialist or if the
5 subscriber is suffering from a prolonged, life-threatening,
6 degenerative or disabling condition. Authorization of the
7 specialist to provide health care services to the subscriber
8 shall be made in the same manner as the authorization of
9 subscribers' primary care provider.
10 (e) No managed care plan may:
11 (1) Deny enrollment to a subscriber who is a member of a
12 group for which the plan is providing or has proposed to provide
13 basic health services.
14 (2) Offer to provide basic health services contingent upon
15 the exclusion of individuals who would otherwise be included in
16 the defined group.
17 (f) A managed care plan may not impose a penalty on
18 enrollees who seek direct access to an obstetrician or
19 gynecologist.
20 (g) In applying practice standards or parameters, a managed
21 care plan shall make appropriate adjustments based on the
22 severity of the subscriber's condition consistent with generally
23 recognized standards or parameters established or recognized by
24 a professional provider association.
25 (h) A managed care plan shall cover medically necessary
26 services provided by any provider if a participating provider
27 cannot attend to the enrollee within a time period appropriate
28 to the enrollee's medical condition. In no case shall the
29 waiting period for an appointment exceed thirty days from the
30 date of initial contact to schedule an appointment.
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1 (i) A managed care plan shall provide coverage for all FDA-
2 approved drugs and devices, whether or not the drug or device
3 has been approved for the specific treatment or condition, and
4 provided that the treating physician determines that the drug or
5 device is medically necessary or appropriate for the enrollee's
6 condition.
7 (j) Enrollees shall have thirty days from the commencement
8 of the contract to cancel for any reason. Cancellation shall be
9 provided to the managed care plan in writing, and a United
10 States postmark shall be conclusive evidence of the date
11 received.
12 (k) A managed care plan shall cover medically necessary
13 services furnished as a result of a medical emergency by a
14 nonparticipating provider.
15 (l) Enrollees shall be covered for any condition which is
16 normally covered under the plan. This shall include secondary
17 conditions resulting from a noncovered primary condition.
18 Section 10.2 Disenrollment Parameters.--A managed care plan
19 may disenroll an enrollee only in accordance with the following:
20 (1) A subscriber shall be provided a notice thirty days
21 prior to disenrollment. The notice shall state the reason for
22 the disenrollment, the effective date of disenrollment and the
23 subscriber's right to appeal the disenrollment to the
24 department.
25 (2) A disenrollment shall only be provided for nonpayment of
26 charges or premiums, termination of conditions under which
27 enrollment occurred, violation of policies published by the
28 secretary, policies of the managed care organization as approved
29 by the secretary, change of residence or fraudulent use of
30 managed care services.
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1 (3) The plan shall offer to each subscriber who is eligible
2 for disenrollment, as a result of discontinuation of membership
3 in a group enrolled with the managed care organization, a
4 subscription agreement with the same level of benefits as
5 provided under the group contract. The plan may charge a
6 different reasonable premium to any subscriber who is not a
7 member of a group.
8 Section 5. Sections 11, 12, 13, 15, 16 and 17 of the act,
9 amended December 19, 1980 (P.L.1300, No.234), are amended to
10 read:
11 Section 11. Reports and Examinations.--(a) (1) [The] A
12 corporation that has a certificate of authority under section 4
13 of this act shall, on or before the first of March of every
14 year, file with the commissioner a statement verified by at
15 least two of the principal officers of the corporation
16 summarizing its financial activities during the calendar or
17 fiscal year immediately preceding, and showing its financial
18 condition at the close of business on December 31 of that year,
19 or the corporation's fiscal year. [Such] The statement shall be
20 in such form and shall contain such matter as the commissioner
21 prescribes.
22 (2) The financial affairs and status of [every such
23 corporation] each corporation that has a certificate of
24 authority under section 4 of this act shall be examined by the
25 commissioner or [his] the commissioner's agents not less
26 frequently than once in every three years [and for]. For this
27 purpose, the commissioner and [his] the commissioner's agents
28 shall be entitled to:
29 (i) the aid and cooperation of the officers and employes of
30 the corporation [and shall have convenient];
19970H1506B1829 - 16 -
1 (ii) access to all books, records, papers, and documents that
2 relate to the financial affairs of the corporation[. They shall
3 have authority to]; and
4 (iii) examine under oath or affirmation the officers, agents,
5 employes and subscribers for the health services of the
6 corporation, and all other persons having or having had
7 substantial part in the work of the corporation in relation to
8 its affairs, transactions and financial condition.
9 (3) The [Insurance Commissioner] commissioner may at any
10 time, without making such examination, call on any such
11 corporation for a written report authenticated by at least two
12 of its principal officers concerning the financial affairs and
13 status of the corporation.
14 (b) A corporation that has a certificate of authority under
15 section 4 of this act shall maintain its financial records in
16 such manner that the revenues and expenses associated with the
17 establishment, maintenance and operation of its prepaid health
18 care delivery system under this act are identifiable and
19 distinct from other activities it may engage in which are not
20 directly related to the establishment, maintenance and operation
21 of its prepaid health care delivery system under this act.
22 (c) The secretary or [his] the secretary's agents shall have
23 free access to all the books, records, papers and documents that
24 relate to the business of the corporation, other than financial.
25 Section 12. Contracts to Provide Medical Care.--A [health
26 maintenance organization] managed care plan established pursuant
27 to this act may receive and accept from governmental or private
28 agencies payments covering all or part of the cost of
29 subscriptions to provide its services, facilities, appliances,
30 medicines or supplies.
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1 Section 13. Exemption from Taxation.--Every [health
2 maintenance organization] managed care plan established,
3 maintained and operated by a corporation not-for-profit is
4 hereby declared to be a charitable and benevolent institution
5 and all its income, funds, investments and property shall be
6 exempt from all taxation of the State or its political
7 subdivisions.
8 Section 15. Penalty.--(a) The commissioner and secretary
9 may suspend or revoke any certificate of authority issued to a
10 [health maintenance organization] managed care plan under this
11 act, or, in their discretion, impose a penalty of not more than
12 one thousand dollars ($1,000) for each and every unlawful act
13 committed, if they find that any of the following conditions
14 exist:
15 (1) that the [health maintenance organization] managed care
16 plan is providing inadequate or poor quality care, thereby
17 creating a threat to the health and safety of its subscribers;
18 (2) that the [health maintenance organization] managed care
19 plan is unable to fulfill its contractual obligations to its
20 subscribers;
21 (3) that the [health maintenance organization] managed care
22 plan or any person on its behalf has advertised its services in
23 an untrue, misrepresentative, misleading, deceptive or unfair
24 manner; or
25 (4) that the [health maintenance organization] managed care
26 plan has otherwise failed to substantially comply with this act.
27 (b) Before the commissioner or secretary, whichever is
28 appropriate, shall take any action as above set forth, [he] the
29 commissioner or secretary shall give written notice to the
30 [health maintenance organization,] managed care plan accused of
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1 violating the law, stating specifically the nature of [such] the
2 alleged violation and fixing a time and place, at least ten days
3 thereafter, when a hearing of the matter shall be held. Hearing
4 procedure and appeals from decisions of the commissioner or
5 secretary shall be as provided in Title 2 of the Pennsylvania
6 Consolidated Statutes (relating to administrative law and
7 procedure).
8 Section 16. Exclusions.--[Certificates] No certificates of
9 authority shall [not] be required of:
10 (1) [Health maintenance organizations] Managed care plans
11 offered by employers for the exclusive enrollment of their own
12 employes, or by unions for the sole use of their members.
13 (2) Any plan, program or service offered by an employer for
14 the prevention of disease among his employes.
15 Section 17. Effect of Act on Other Plans.--(a) Any
16 requirements or privileges granted under this act shall apply
17 exclusively to that portion of business or activities which
18 reasonably relates to the establishment, maintenance and
19 operation of a [health maintenance organization] managed care
20 plan pursuant to the provisions of this act.
21 (b) [Any health maintenance organization program] A managed
22 care plan approved by the commissioner or secretary and
23 operating under the provisions of 40 Pa.C.S. Ch.61 (relating to
24 hospital plan corporations) or 40 Pa.C.S. Ch.63 (relating to
25 professional health services plan corporations) or under any
26 statute superseded by either of such statutes, prior to the
27 effective date of this act, may continue to operate under the
28 provisions of such authority or successor provisions, if any.
29 Section 6. This act shall take effect in 60 days.
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