THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MICCARELLI, DiGIROLAMO, HALUSKA, HARKINS, O'NEILL, SWANGER, YOUNGBLOOD AND DAVIDSON, JUNE 29, 2011

REFERRED TO COMMITTEE ON INSURANCE, JUNE 29, 2011  

AN ACT

Providing for physician contracts with health insurers.

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 Fair Health

Care Provider Contracting Act.

Section 2.  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:

"Capitation."  The payment by a health insurer to physicians,

physician groups or physician organizations of a per-member-per-

month amount, such as percentage of premium, by which a health

insurer transfers to the physicians, physician groups or

physician organizations the financial risk for those covered

services as set forth in the contract between the health insurer

and the physicians, physician groups or physician organizations.

"CCI."  The Centers for Medicare and Medicaid Services'

published list of edits and adjustments that are made to health

care providers' claims submitted for services or supplies

provided to patients insured under the Federal Medicare program

and under other Federal insurance programs.

"Clean claim."  A claim for payment for a covered service

that has no defect or impropriety. The term does not include a

claim from a physician who is under investigation for fraud or

abuse regarding that claim.

"Clinical information."  Clinical, operative or other medical

records and reports kept in the ordinary course of a

physician's, physician group's or physician organization's

business. The term shall include, where applicable, requested

statements of medical necessity.

"CMS-1500."  The current health care provider claim form

number 1500 created by the Centers for Medicare and Medicaid

Services.

"Covered services."  With respect to a particular health

insurer, a health care benefit that is within the coverage

described in the plan documents applicable to an eligible plan

member of the health insurer.

"CPT," "CPT codes" or "AMA CPT book."  Current medical

nomenclature in the publication entitled "CPT Standard Edition,"

"CPT Professional Edition," "CPT Assistant" and "Principles of

CPT Coding" published by the American Medical Association

containing a systematic listing and coding of procedures and

services provided to patients by physicians and certain

nonphysician health professionals.

"CPT conventions."  Rules for the application of codes that

go across all sections and subsections of the American Medical

Association CPT book.

"CPT guidelines."  Guidelines set out in the introduction, in

the beginning to each of the six major sections, in the

subsections and in the code level parenthetic statements and

cross references contained in the American Medical Association

publication "CPT, Professional Edition." The term shall not

include any reference to another publication that is not subject

to the existing CPT Editorial Panel process, such as "CPT

Assistant" or Principles of CPT coding.

"Edit."  A practice or procedure pursuant to which one or

more adjustments are made to CPT codes or HCPCS Level II codes

included in a claim that results in:

(1)  payment being made based on some, but not all, of

the CPT codes or HCPCS Level II codes included in the claim;

(2)  payment being made based on different CPT codes or

HCPCS Level II codes than those included in the claim;

(3)  payment for one or more of the CPT codes or HCPCS

Level II codes included in the claim being reduced by

application of Multiple Procedure Logic;

(4)  payment for one or more of the CPT codes or HCPCS

Level II codes being denied; or

(5)  any combination of the above.

"ERISA."  The Employee Retirement Income Security Act of 1974

(Public Law 93-406, 88 Stat. 829), as amended, and the rules and

regulations promulgated thereunder.

"Fully insured plan."  A plan as to which a health insurer

assumes all or a majority of health care cost and utilization

risk.

"HCPCS Level II codes."  Alphanumeric codes used to identify

those codes not included in CPT and that are commonly referred

to as Healthcare Common Procedure Coding System Level II codes.

"Health insurer."  An entity and its health subsidiaries and

affiliates licensed under:

(1)  40 Pa.C.S. Ch. 61 (relating to hospital plan

corporations); or

(2)  40 Pa.C.S. Ch. 63 (relating to professional health

services plan corporations).

"HIPAA."  The Health Insurance Portability and Accountability

Act of 1996 (Public Law 104-191, 110 Stat. 136).

"Individually negotiated contract."  A contract pursuant to

which the parties to the contract, as a result of negotiation,

agreed to one or more modifications to the terms of a health

insurer's applicable standard form agreement that:

(1)  Substantially modify the standard form agreement.

(2)  Are made to individually suit, in whole or in part, the

needs of a participating physician, participating physician

group or participating physician organization, such as higher

or customized rates and other customized payment

methodologies.

"Most favored nation."  A clause within a health care

provider contract that places an obligation on a participating

physician, participating physician group or participating

physician organization to grant to a health insurer contract

terms and conditions that are identical to every other contract

negotiated by the participating physician, participating

physician group or participating physician organization with

another health insurer or third-party payor entity including

more advantageous terms for the participating physician,

participating physician group or participating physician

organization.

"Nonparticipating."  A physician, physician group or

physician organization that is not a participating physician,

participating physician group or participating physician

organization.

"Overpayment."  With respect to a claim submitted by or on

behalf of a physician, physician group or physician

organization, any erroneous or excess payment that a health

insurer makes for any reason such as:

(1)  payment at an incorrect rate;

(2)  duplicate payments for the same physician service;

(3)  payment with respect to an individual who was not a

plan member on the date the physician provided the physician

services that are the subject of the payment; and

(4)  payment for any noncovered service.

"Participating physician."  A physician who has entered into

a valid written contract with a health insurer, or who has

agreed pursuant to an arrangement with a physician group,

physician organization or other entity which has a valid written

contract with a health insurer, to provide covered services to

that health insurer's plan members and, where applicable, who

meets the health insurer's credentialing requirements during the

effective period of the contract. The term term does not include

a physician who has entered into an agreement with a rental

network.

"Participating physician group."  A physician group that has

entered into a valid written contract with a health insurer to

provide covered services to that health insurer's plan members.

"Participating physician organization."  A physician

organization that has entered into a valid written contract with

a health insurer to provide covered services to that health

insurer's plan members.

"Physician."  The term shall have have the same meaning as

given to it in section 2 of the act of October 5, 1978

(P.L.1109, No.261), known as the Osteopathic Medical Practice

Act and section 2 of the act of December 20, 1985 (P.L.417,

No.112), known as the Medical Practice Act of 1985.

"Physician group."  Two or more physicians, and those

claiming by or through them, who practice under a single

taxpayer identification number.

"Physician organization."  Any association, partnership,

corporation or other form of organization, such as independent

practice associations and physician hospital organizations, that

arranges for care to be provided to plan members by physicians

organized under multiple taxpayer identification numbers.

"Physician services."  Covered services that a physician

provides to a plan member, as specified in applicable agreements

with a health insurer or otherwise.

"Physician specialty society."  A United States medical

specialty society that represents diplomats certified by a board

recognized by the American Board of Medical Specialties.

"Plan."  A benefit plan through which a plan member obtains

health care benefits set forth in pertinent plan documents.

"Plan documents."  Documents defining the health care

benefits available to a plan member, such as the plan member's

summary plan description, certificate of coverage or other

applicable coverage document and the terms and conditions under

which the benefits are available under the plan.

"Plan member."  An individual enrolled in or covered by a

plan offered and administered by a health insurer.

"Precertification," "precertify" or "precertifies."  The

prior approval by a health insurer that the service or supply is

medically necessary and not experimental or investigational.

"Product network."  A network of participating physicians

who, pursuant to contracts with a health insurer, provide

covered services to plan members for one or more products or

types of products offered by the health insurer in exchange for

a specified type of compensation."

"Provider website."  The secure and password-protected online

resources for participating physicians to obtain information

about a health insurer, its products and policies and other

information.

"Public website."  The online resources for the public to

obtain information about a health insurer, its products and

policies and other information.

"Self-insured plan."  Any plan other than a fully insured

plan.

"Significant edit."  An edit that a health insurer reasonably

believes, based on its experience with submitted claims, shall

cause, on the initial review of submitted claims, the denial of

or reduction in payment for a particular CPT code or HCPCS Level

II code more than 250 times per year.

Section 3.  Availability of fee schedules and scheduled payment

dates.

The following shall apply:

(1)  A health insurer shall develop and implement a plan

on the effective date of this section to reasonably permit

its participating physician, participating physician group or

participating physician organization to view, by CDROM or

electronically, at the health insurer's option, on a

confidential basis, complete fee information showing the

applicable fee schedule amounts for the participating

physician, participating physician group or participating

physician organization pursuant to that participating

physician's, participating physician group's or participating

physician organization's direct written agreement with the

health insurer.

(2)  A participating physician, participating physician

group or participating physician organization may elect to

receive a hard copy of the fee schedule in lieu of the

foregoing.

(3)  The fee schedule information shall be provided by

the fee-for-service dollar amount allowable for each CPT code

for those CPT codes that a participating physician,

participating physician group or participating physician

organization in the same specialty typically uses in

providing covered services.

(4)  A participating physician, participating physician

group or participating physician organization may request and

the health insurer shall provide the fee-for-service dollar

amount allowable for other CPT codes that its participating

physician, participating physician group or participating

physician organization actually bills the health insurer.

(5)  A health insurer may base actual compensation on the

health insurer's maximum allowable amount and other contract

adjustments.

(6)  Each health insurer, upon written request from a

participating physician, participating physician group or

participating physician organization that, in each case, has

entered into a written contract directly with that health

insurer shall provide, by hard copy, the fee schedule for up

to 100 CPT codes customarily and routinely used by the

participating physician, participating physician group or

participating physician organization, as specified by the

participating physician, participating physician group or

participating physician organization.

(7)  Each health insurer shall be obligated to honor only

two requests under paragraph (6) made annually by the

participating physician, participating physician group or

participating physician organization.

(8)  Each health insurer shall attempt to include

provisions in its agreements with delegated entities that

require comparable disclosure.

(9)  Each health insurer may not require its

participating physicians, participating physician groups or

participating physician organizations to provide that health

insurer with billing rates as a precondition to that health

insurer providing fee information under this section.

Section 4.  Reduced precertification requirements.

(a)  Posting.--Except as provided under subsection (b), each

health insurer shall post to its provider website, on the

effective date of this section, those services or supplies for

which precertification is routinely required for its products,

and shall update the posting to the extent the services or

supplies for which precertification is routinely required

changes.

(b)  Specification of services.--Notwithstanding subsection

(a), a health insurer's self-insured plan customers may specify

services or supplies for which precertification is required that

differ from or are in addition to the services or supplies for

which that health insurer routinely requires precertification

for its fully insured plans, and the self-insured plans may

contract with a different entity to provide precertification

services.

(c)  Utilization.--Each health insurer shall propose to its

self-insured plan customers that they utilize the health

insurer's standard list of services and supplies for which

precertification is required.

(d)  Customized list.--With a self-insured plan's approval,

each health insurer shall post the self-insured plan's

customized list of precertification requirements to the health

insurer's provider website.

Section 5.  Notice of policy and procedure changes.

(a)  Written notice.--Each health insurer shall, if it

intends to make any material adverse changes in the terms of its

contracts, including policies and procedures, with its

participating physicians, participating physician groups or

participating physician organizations give at least 90 days'

written notice to each participating physician, participating

physician group or participating physician organization affected

thereby with whom the health insurer has directly contracted,

except to the extent that a shorter notice period is required to

comply with changes in applicable law. The written notice shall

reasonably apprise its participating physician, participating

physician group or participating physician organization of the

changes and the changes shall not become effective before the

conclusion of the notice period.

(b)  Termination.--If a participating physician,

participating physician group or participating physician

organization objects to the changes that are subject to the

notice, the participating physician, participating physician

group or participating physician organization must, within 30

days of the date of the notice, which shall be the date the

notice is sent by United States mail, by facsimile, or if the

health insurer offers it, electronically at the option of the

physician, physician group or physician organization, give

written notice to terminate his contract with the health

insurer, which shall take effect at the end of the notice period

of the material adverse change unless, within 65 days of the

date of the original notice of changes, the health insurer gives

written notice to the objecting participating physician,

participating physician group or participating physician

organization that it shall not implement, as to the objecting

participating physician, participating physician group or

participating physician organization, the material adverse

changes to which the participating physician, participating

physician group or participating physician organization

objected.

Section 6.  Disclosure of and commitments concerning claims

payment practices.

(a)  Payment rules.--Each health insurer agrees that, except

for Medicaid, State children's health insurance programs and

other similar government programs for low-income persons and for

members of State established high risk pools, its automated

"bundling" and other claims payment rules shall be consistent in

all material respects, for claims submitted by or on behalf of

the health insurer's plan members.

(b)  Disclosure.--Each health insurer agrees to disclose its

significant edits on its provider website on the effective date

of this section, or as soon thereafter as practicable.

(c)  Update.--Each health insurer shall update its disclosure

of significant edits once per calendar year to reflect changes

in the health insurer's significant edits and the health

insurer's experience with submitted claims. The health insurer

shall promptly disclose newly adopted significant edits. The

following shall apply:

(1)  On the effective date of this section, or as soon

thereafter as practicable, each health insurer shall publish

on its provider website, for each commercially available

claims editing software product then in use by the health

insurer, a list identifying each customized edit added to the

standard claims editing software product at the health

insurer's request.

(2)  On the effective date of this section, a health

insurer shall not routinely require submission of clinical

information, before or after payment of claims, in connection

with that health insurer's adjudication of a physician's

claims for payment, except as to claims for unlisted codes,

claims to which a modifier 22 is appended, and other limited

categories of claims as to which the health insurer

determines that routine review of clinical information is

appropriate, except that the health insurer shall disclose

any of its categories of the nature on its public website and

its provider website.

(d)  Required submission.--Notwithstanding subsection (c)(2),

a health insurer may require submission of clinical information

in connection with a health insurer's adjudication of a

physician's claims for payment for the purpose of investigating

fraudulent or abusive, whether intentional or unintentional,

billing practices, but only so long as, and only during the

times as, the health insurer has a reasonable basis for

believing that the investigation is warranted.

(e)  Contest.--A participating physician may contest any

requirement that the participating physician submit clinical

information in connection with a health insurer's adjudication

of the participating physician's claims for payment for the

purpose of investigating fraudulent or abusive, whether

intentional or unintentional, billing practices.

(f)  Intent.--Nothing under this section is intended or shall

be construed to limit a health insurer's right to require

submission of clinical information when the requirement is not

in connection with a health insurer's adjudication of a

physician's claims for payment or is otherwise permitted by this

section, such as the right to require submission of clinical

information for precertification purposes as consistent with

this section.

(g)  Publication.--On the effective date of this section,

each health insurer shall publish on its provider website those

limited code combinations as to which it has determined that

particular services or procedures, relative to modifiers 25 and

59, are not appropriately reported together with those modifiers

and the health insurer's application of the rule differs from

CPT codes, except that no determination shall be inconsistent

with the undertakings set forth under this section.

Section 7.  Dispute resolution process for physician billing

disputes.

(a)  Establishment.--On the effective date of this section,

each of the health insurers shall take actions necessary to

establish a billing dispute external review process. The billing

dispute external review process shall provide for a billing

dispute reviewer to resolve disputes with physicians and

physician groups arising from covered services provided to the

health insurer's plan members by the physicians and physician

groups concerning:

(1)  the health insurer's application of the health

insurer's coding and payment rules and methodologies for fee-

for-service claims, including, but not limited to, any

bundling, downcoding, application of a CPT modifier and other

reassignment of a code by the health insurer, to patient-

specific factual situations, including, but not limited to,

the appropriate payment when two or more CPT codes are billed

together or whether a payment-enhancing modifier is

appropriate; or

(2)  any retained claims, if the retained claims are

submitted by the physician to the billing dispute reviewer

prior to the later to occur of 90 days after the effective

date of this section or 30 days after exhaustion of the

health insurer's internal appeals process. Each matter shall

be a billing dispute.

(b)  Jurisdiction.--The billing dispute reviewer shall not

have jurisdiction over any other disputes, such as those

disputes that fall within the scope of the external review

process set forth under subsection (a), compliance disputes and

disputes concerning the scope of covered services, nor shall any

billing dispute reviewer have jurisdiction or authority to

revise or establish any reimbursement policy of the health

insurer.

(c)  Intent.--Nothing contained under this section shall be

intended, or shall be construed, to supersede, alter or limit

the rights or remedies otherwise available to any plan member

under section 502(a) of ERISA or to supersede in any respect the

claims procedures for plan members of section 503 of ERISA, or

required by applicable Federal or State law or regulation.

(d)  Appeal process.--

(1)  The physician or physician group must exhaust the

health insurer's internal appeals process before submitting a

billing dispute to the billing dispute reviewer.

(2)  A physician or physician group shall be deemed to

have exhausted the health insurer's internal appeals process

if the health insurer does not communicate a decision on an

internal appeal within 30 days of the health insurer's

receipt of all documentation reasonably needed to decide the

internal appeal. If the health insurer and physician or

physician group disagree as to whether the requirements of

this paragraph have been satisfied, the disagreement shall be

resolved by the billing dispute reviewer.

(e)  Time.--Billing disputes shall be submitted to the

billing dispute reviewer no more than 90 days after a physician

or physician group exhausts the health insurer's internal

appeals process. The billing dispute reviewer shall not hear or

decide any billing dispute submitted more than 90 days after the

health insurer's internal appeals process has been exhausted.

(f)  Documentation.--The health insurer shall supply

appropriate documentation to the billing dispute reviewer no

later than 30 days after requested by the billing dispute

reviewer, which request shall not be made until billing disputes

have been submitted with amounts in dispute that in aggregate

exceed $500.

(g)  Cooperation.--Each health insurer shall cooperate with

organized State physician organizations in order to select the

persons or organizations that shall serve as the billing dispute

reviewer, on a local or regional basis.

Section 8.  All products clauses prohibition.

(a)  Capitated fee arrangement.--No health insurer may

require a participating physician to participate in a capitated

fee arrangement in order to participate in product networks in

which such participating physician is compensated on a fee-for-

service basis.

(b)  Product networks.--No health insurer shall require a

participating physician to participate in its Medicare Advantage

or Medicaid product networks in order to participate in its

commercial product networks.

(c)  Participation.--If a participating physician or

participating physician group comprised of participating

physicians or participating physician organization chooses not

to participate in all of the health insurer's product networks

or terminates participation in some of the health insurer's

product networks, the reimbursement levels offered to or applied

by the health insurer to the participating physician or

participating physician group or participating physician

organization for the product network in which the participating

physician or participating physician group or participating

physician organization continues to participate shall not be

lower than the health insurer's standard reimbursement levels in

the geographic market. This subsection shall not apply if a

participating physician or participating physician group

comprised of participating physicians or participating physician

organization has agreed in an individually negotiated contract

to participate in more than one product network for a specified

period of time, in which case the terms of the individually

negotiated contract shall govern.

(d)  Reimbursement level or incentive.--Notwithstanding

subsection (c), the health insurer may offer a higher

reimbursement level or other incentive to any participating

physician, participating physician group or participating

physician organization who elects to participate or elects to

continue participation in more than one of the health insurer's

product networks.

(e)  Obligation.--Nothing under this section shall obligate a

health insurer to pay more than the lesser of the participating

physician's billed charges or the health insurer's applicable

fee-for-service amount.

Section 9.  Termination without cause.

(a)  Written notice.--Unless an individually negotiated

contract between a health insurer and a participating physician,

participating physician group or participating physician

organization specifies a different period of notice, or

specifies that the contract may not be terminated except for

cause during a defined period of time, either party to a

contract between a health insurer and a participating physician,

participating physician group or participating physician

organization shall have the right to terminate the contract

without cause upon prior written notice provided to the other

party which notice shall be a definite period set forth in the

agreement, which period shall be no less than 60 or more than

120 calendar days.

(b)  Obligations.--In the event of a contract termination by

either party, the following obligations shall apply with respect

to the continuation of care for those patients of a

participating physician, participating physician group or

participating physician organization who are entitled to

continuation of care as reasonably defined under the

participating physician's, participating physician group's or

participating physician organization's contract with the health

insurer or under applicable law:

(1)  In the case of a continuation of care situation as

described in the introductory paragraph, the participating

physician, participating physician group or participating

physician organization shall continue to render necessary

care to the health insurer's plan member consistent with

contractual or legal obligations. If, on notice from the

participating physician, participating physician group,

participating physician organization or the health insurer's

plan member that a plan member is in a continuation of care

situation, the health insurer does not use due diligence to

make alternative care available to the plan member within 90

days after receipt of the notice for continuation of care

services provided after termination, the health insurer shall

pay to the participating physician, participating physician

group or participating physician organization the standard

rates paid to nonparticipating physicians for that

geographical area.

(2)  Notwithstanding paragraph (1), a health insurer's

obligations under this section shall not apply to the extent

that other participating physicians, participating physician

groups or participating physician organizations are not

available to replace the termination physician, physician

group or physician organization due to:

(i)  geographic or travel-time barriers; or

(ii)  contractual provisions between the terminating

physician, physician group or physician organization and

a facility at which the health insurer's plan member

receives care that limits or precludes other

participating physicians, participating physician groups

or participating physician organizations from rendering

replacement services to the health insurer's plan

members.

Section 10.  Patient-specific issues involving clinical

judgment, and medical necessity definition.

(a)  Adoption.--Each health insurer shall adopt and apply as

to its current agreements and include in its future agreements

with participating physicians the definition of "medically

necessary" or a comparable term in each agreement. The term

shall mean health care services that a physician, exercising

prudent clinical judgment, would provide to a patient for the

purpose of preventing, evaluating, diagnosing or treating an

illness, injury, disease or its symptoms, and that are:

(1)  in accordance with generally accepted standards of

medical practice;

(2)  clinically appropriate, in terms of type, frequency,

extent, site and duration, and considered effective for the

patient's illness, injury or disease; and

(3)  not primarily for the convenience of the patient,

physician or other health care provider and not more costly

than an alternative service or sequence of services at least

as likely to produce equivalent therapeutic or diagnostic

results as to the diagnosis or treatment of that patient's

illness, injury or disease.

(b)  Definition.--As used in this section, the term shall

have the meaning given to it in this subsection unless the

context clearly indicates otherwise:

"Generally accepted standards of medical practice."

Standards that are based on credible scientific evidence

published in peer-reviewed medical literature generally

recognized by the relevant medical community, physician

specialty society recommendations and the views of physicians

practicing in relevant clinical areas and any other relevant

factors.

Section 11.  Policy issues involving clinical judgment.

In formulating and adopting medical policies with respect to

covered services, each health insurer shall rely on credible

scientific evidence published in peer-reviewed medical

literature generally recognized by the relevant medical

community, and shall continue to make the policies readily

available to its plan members and participating physicians via

its public website or by other electronic means. In formulating

and adopting the policies, each health insurer shall take into

account national physician specialty society recommendations and

the views of prudent physicians practicing in relevant clinical

areas and any other clinically relevant factors.

Section 12.  Future consideration by health insurers of an

administrative exemption program.

(a)  Exemption.--Each health insurer shall consider the

feasibility and desirability of exempting certain participating

physicians from certain administrative requirements based on

criteria such as the participating physician's delivery of

quality and cost-effective medical care and accuracy and

appropriateness of claims submissions.

(b)  Construction.--No health insurer shall be obliged to

implement any exemption process, and this section shall not be

construed to limit a health insurer's ability to implement any

program on a pilot or experimental basis, base exemptions on any

health insurer determined basis or otherwise to implement one or

more programs in only some markets.

Section 13.  Timelines for processing and payment of clean

claims.

Beginning on the effective date of this section, each health

insurer shall direct the issuance of a check or an electronic

funds transfer in payment for clean claims for covered services

within 30 calendar days.

Section 14.  No automatic downcoding of evaluation and

management claims.

(a) Prohibition.--On the effective date of this section, no

health insurer shall automatically reassign or reduce the code

level of evaluation and management codes billed for covered

services, downcoding, except that a health insurer may reassign

a new patient visit code to an established patient visit code

based solely on CPT codes, CPT guidelines and CPT conventions.

(b)  Denial.--Health insurers shall continue to have the

right to deny, pend or adjust the claims for covered services on

other bases and shall have the right to reassign or reduce the

code level for selected claims for covered services or claims

for covered services submitted by selected physicians, physician

groups or physician organizations, based on a review of the

information in the clinical information at the time the service

was rendered for the particular claims or a review of

information derived from a health insurer's fraud or abuse

billing detection programs that create a reasonable belief of

fraudulent or abusive, whether intentional or unintentional,

billing practices, provided that the decision to reassign or

reduce is based primarily on a review of clinical information.

Section 15.  Bundling and other computerized claim editing.

(a)  Duties.--Each health insurer shall do all of the

following:

(1)  Take actions necessary on the health insurer's part

to cause the claim-editing software program it uses to

continue to produce editing results consistent with the

standards set forth in this section.

(2)  Process and separately reimburse those codes listed

in the American Medical Association CPT book as modifier 51

exempt CPT codes without reducing payment under the health

insurer's multiple procedure logic, if the American Medical

Association CPT book provides that the services are

appropriately reported together.

(3)  Process and separately reimburse codes listed in the

American Medical Association CPT book as add-on billing codes

without reducing payment under the health insurer's multiple

procedure logic, if the American Medical Association CPT book

provides that the add-on CPT codes are appropriately billed

with proper primary procedure codes.

(b)  Clinical information.--No health insurer shall require

physicians to submit clinical information of their patient

encounters solely because the physicians seek payment for both

surgical procedures and CPT evaluation and management services

for the same patient on the same date of service, if the correct

CPT evaluation and management code, surgical code and modifier

are included on the initial claim submission.

(c)  Code recognition.--If a claim contains a CPT code for an

evaluation and management service, appended with a CPT modifier

25 and a CPT code for performance of a nonevaluation and

management service procedure code, both codes shall be

recognized and separately eligible for payment, unless the

clinical information indicates that use of the CPT modifier 25

was inappropriate or the health insurer has disclosed, pursuant

to the limited number of finite code combinations that are not

appropriately reported together.

(d)  Payment.--Payment shall only be made for one evaluation

and management service for any single day unless payment for

more than one is appropriate pursuant to the American Medical

Association CPT book and is supported by appropriate diagnoses

in the clinical information.

(e)  Edits.--Each health insurer shall remove from its claim

review and payment systems any edits that generally deny payment

for CPT evaluation and management codes with a CPT modifier 25

appended when submitted with surgical or other procedure codes

for the same patient on the same date of service except for a

limited number of exceptions, which shall be disclosed on the

health insurer's provider website.

(f)  Prohibition.--Nothing in this section shall prohibit a

health insurer from requiring use of the appropriate CPT code

modifiers for evaluation and management billing codes on the

original claim forms, or preclude a health insurer from

requiring a physician, physician group or physician organization

to submit to an audit of claims submitted by the physician,

physician group or physician organization for payment directly

to the physician, physician group or physician organization,

such as claims for surgical procedures and evaluation and

management services on the same date of service submitted with

the appropriate modifier, and to provide their clinical

information in connection with an audit.

(g)  Supervision code.--A CPT code for supervision and

interpretation or radiologic guidance shall be separately

recognized and eligible for payment to the extent that the

associated procedure code is recognized and eligible for payment

if:

(1)  the associated procedure code does not include

supervision and interpretation or radiologic guidance

according to the American Medical Association CPT book; and

(2)  for each procedure, no health insurer shall be

required to pay for supervision or interpretation or

radiologic guidance by more than one qualified health care

professional.

(h)  Reassignment.--No health insurer shall reassign any CPT

code into any other CPT code or deem a CPT code ineligible for

payment based solely on the format of the published CPT

descriptions.

(i)  Modifier 59 codes.--CPT codes submitted with a modifier

59 attached shall be eligible for payment to the extent they

follow the American Medical Association CPT book and they

designate a distinct or independent procedure performed on the

same day by the same physician, but only to the extent that:

(1)  although the procedures or services are not normally

reported together they are appropriately reported together

under the particular presenting circumstances; and

(2)  it would not be more appropriate to append any other

CPT recognized modifier to such CPT codes.

(j)  Global periods.--No global periods for surgical

procedures shall be longer than the period then designated by

Centers for Medicare and Medicaid Services, except that this

limitation shall not restrict a health insurer from establishing

a global period for surgical procedures, except where Centers

for Medicare and Medicaid Services has determined a global

period is not appropriate or has identified a global period not

associated with a specific number of days.

(k)  Automatic change.--No health insurer shall automatically

change a CPT code to one reflecting a reduced intensity of the

service when the CPT code is one among or across a series that

includes without limitation CPT codes that differentiate among

simple, intermediate and complex, complete or limited, and size.

Section 16.  Overpayment recovery procedures.

(a)  Time limit.--Except as provided under subsection (b), no

health insurer shall initiate overpayment recovery efforts more

than 18 months after the payment was received by the physician,

except that no time limit shall apply to the initiation of

overpayment recovery efforts:

(1)  based on a reasonable belief of fraud or other

intentional misconduct;

(2)  required by a self-insured plan; or

(3)  required by a Federal or State program.

(b)  Underpayment.--Notwithstanding subsection (a), if a

physician asserts a claim of underpayment, a health insurer may

defend or set off a claim based on overpayments going back in

time as far as the claimed underpayment.

(c)  Appeal.--If a physician requests an appeal within 30

days of receipt of a request for repayment of an overpayment, no

health insurer shall require the physician to repay the alleged

overpayment before such appeal is concluded.

(d)  Limitation.--Nothing under this section shall be deemed

to limit a health insurer's right to pursue recovery of

overpayments that occurred prior to the effective date of this

section where the health insurer has provided the physician with

notice of the recovery efforts prior to the effective date of

this section.

Section 17.  Effect of health insurer confirmation of patient

procedure medical necessity.

(a)  Revocation.--If the health insurer certifies or

precertifies, approves or preapproves that a proposed service is

medically necessary for one of its plan members, the health

insurer shall not subsequently revoke that medical necessity

determination absent evidence of fraud, evidence that the

information submitted was materially erroneous or incomplete or

evidence of material change in that plan member's health

condition between the date that the certification or

precertification was provided and the date of the service that

makes the proposed service no longer medically necessary for the

plan member.

(b)  New request.--If a health insurer certifies or

precertifies the medical necessity of a course of treatment

limited by number, time period or otherwise, a request for

services beyond the certified course of treatment shall be

deemed to be a new request and that health insurer's denial of

such request shall not be deemed to be inconsistent with this

section.

Section 18.  Gag clauses.

(a)  Exchange of information.--No health insurer shall

include in its contracts with participating physicians,

participating physician groups or participating physician

organizations any provision limiting:

(1)  The free, open and unrestricted exchange of

information between its physicians and its plan members

regarding the nature of the plan member's medical conditions

or treatment and provider options and the relative risks and

benefits and costs to the plan member of the options.

(2)  Whether or not the treatment is covered under the

plan member's plan.

(3)  Any right to appeal any adverse decision by the

health insurer regarding coverage of treatment that has been

recommended or rendered.

(b)  Penalty.--A health insurer shall not penalize or

sanction participating physicians in any way for engaging in any

free, open and unrestricted communication with a plan member

with respect to the foregoing subjects or for advocating for any

service on behalf of a plan member.

Section 19.  Arbitration.

(a)  Refund.--With respect to any arbitration proceeding

between a health insurer and its participating physician who

practices individually or in a participating physician group of

fewer than six physicians, the health insurer agrees that it

shall refund any applicable filing fees and arbitrators' fees

paid by the physician if the physician is the prevailing party

with respect to the arbitration proceeding. This subsection

shall not apply to any arbitration proceeding in which the

participating physician purports to represent any physician

outside of his or her physician group.

(b)  Prohibited language.--No health insurer shall include

any of the following language in any agreement with a physician,

physician group or physician organization:

(1)  requiring that any arbitration panel have multiple

members;

(2)  preventing the recovery of any statutory or

otherwise legally available damages or other relief in an

arbitration proceeding;

(3)  restricting the statutory or otherwise legally

available scope or standard of review;

(4)  completely prohibiting discovery;

(5)  shortening any statute of limitations; or

(6)  requiring that any arbitration proceeding occur more

than 50 miles from the principal office of the physician,

physician group or physician organization.

Section 20.  Most favored nations clauses.

A health insurer shall not include any "most favored nations"

clauses in its contracts with participating physicians,

participating physician groups and participating physician

organizations, except for individually negotiated contracts.

Section 21.  Enforcement by the court.

Upon adjudication of both internal and external review

processes, if a health insurer has not complied with this

section, a physician may challenge this assertion by initiating

a claim in a court of competent jurisdiction.

Section 40.  Effective date.

This act shall take effect immediately.