PRINTER'S NO. 1586
No. 1238 Session of 1999
INTRODUCED BY KASUNIC, TARTAGLIONE, O'PAKE, HUGHES, SCHWARTZ, WAGNER, MELLOW, STAPLETON, BODACK, BELAN, COSTA, KITCHEN, LAVALLE, MUSTO AND BOSCOLA, DECEMBER 8, 1999
REFERRED TO PUBLIC HEALTH AND WELFARE, DECEMBER 8, 1999
AN ACT 1 Providing for distribution of a portion of the proceeds from the 2 settlement between the Commonwealth and tobacco product 3 manufacturers to certain hospitals that provide care to 4 persons without health insurance and for powers and duties of 5 the Department of Health. 6 The General Assembly of the Commonwealth of Pennsylvania 7 hereby enacts as follows: 8 Section 1. Short title. 9 This act shall be known and may be cited as the Uncompensated 10 Health Care Reimbursement Act. 11 Section 2. Legislative findings and declaration. 12 (a) Findings.--The General Assembly finds as follows: 13 (1) Access to health care is vital to the well-being of 14 all citizens of this Commonwealth. 15 (2) Many citizens of this Commonwealth cannot afford 16 adequate health care insurance. Without insurance coverage, 17 these citizens look to hospitals to provide necessary health 18 care services. 19 (3) Hospitals in this Commonwealth have taken on the
1 financial burden of providing health care services to 2 uninsured individuals. 3 (4) Hospitals in this Commonwealth have sustained losses 4 of more than $700 million in providing health care to 5 uninsured individuals. 6 (b) Declaration.--The General Assembly declares that 7 hospitals in this Commonwealth that expend a certain percent of 8 their budgets providing uncompensated care should receive money 9 from the master settlement agreement between the Commonwealth 10 and tobacco product manufacturers. 11 Section 3. Definitions. 12 The following words and phrases when used in this act shall 13 have the meanings given to them in this section unless the 14 context clearly indicates otherwise: 15 "Bad debt expense." The foregone revenue for care in which 16 the hospital initially anticipated payment or extended credit to 17 the patient, and later determined it to be uncollectible. 18 "Charity care." The care a hospital provides without charges 19 because the patient is unable to compensate the hospital either 20 through third-party coverage or the patient's own resources. 21 "Department." The Department of Health of the Commonwealth. 22 "Distribution." Payment from the Uncompensated Health Care 23 Fund to an eligible hospital. 24 "Eligible hospital." A hospital that meets the requirements 25 of section 5(a). 26 "Fund." The Uncompensated Health Care Fund established under 27 this act. 28 "Master settlement agreement." The settlement agreement and 29 related documents entered into on January 13, 1999, by the 30 Commonwealth and leading United States tobacco product 19990S1238B1586 - 2 -
1 manufacturers. 2 "Net proceeds." The amount of money made available annually 3 to the Commonwealth under the master settlement agreement less 4 any sum deducted for a master settlement agreement reserve fund. 5 Section 4. Uncompensated Health Care Fund. 6 (a) Establishment.--There is hereby established in the State 7 Treasury the Uncompensated Health Care Fund. 8 (b) Payments into the fund.--An amount equal to 12.2% of the 9 net proceeds available to the Commonwealth under the master 10 settlement agreement shall be deposited into the fund. 11 (c) Administration.--The department shall administer the 12 fund in accordance with the provisions of this act. 13 Section 5. Determination of eligibility for distribution. 14 (a) Criteria.--In order to be eligible for distributions 15 under this act, a hospital must satisfy all of the following 16 criteria: 17 (1) The hospital must meet at least one of the 18 following: 19 (i) in accordance with the Health Care Cost 20 Containment Council's Annual Report on the Financial 21 Health of Pennsylvania's Hospitals, the hospital must 22 provide health care services above the regional weighted 23 average to persons receiving Medicaid or Medicare; 24 (ii) the hospital must show a net operating loss in 25 three of the most recent and available fiscal years 26 preceding an application for a distribution. 27 (2) The hospital must submit to a management audit 28 performed by the Auditor General to determine its financial 29 soundness, in accordance with the regulations promulgated by 30 the department. 19990S1238B1586 - 3 -
1 (3) The hospital must be licensed by the department as a 2 hospital in this Commonwealth. If a hospital fails to 3 maintain licensure throughout the fiscal year in which 4 distributions are made, the department may discontinue 5 distributions and require the return of any distributions 6 made in the fiscal year in which licensure was suspended or 7 revoked. 8 (4) The hospital must provide screenings and treatment 9 for cancer, including, but not limited to, the following: 10 (i) Annual gynecological examination, including a 11 pelvic examination and clinical breast examination in 12 accordance with the act of April 22, 1994 (P.L.136, 13 No.20), known as the Women's Preventative Health Services 14 Act. 15 (ii) Routine pap smears in accordance with the 16 recommendations of the American College of Obstetricians 17 and Gynecologists in accordance with the Women's 18 Preventative Health Services Act. 19 (iii) Mammographic examination every year for women 20 40 years of age or older and any mammogram based on a 21 physician's recommendation for women under 40 years of 22 age in accordance with the provisions of section 632 of 23 the act of May 17, 1921 (P.L.682, No.284), known as The 24 Insurance Company Law of 1921. 25 (iv) For men 50 years of age or older, an annual 26 digital rectal examination to detect prostate cancer. 27 (v) For men 40 years of age or older with a family 28 history of prostate cancer or other prostate cancer risk 29 factors, an annual digital rectal examination to detect 30 prostate cancer. 19990S1238B1586 - 4 -
1 (vi) For men 50 years of age or older, an annual 2 prostate specific antigen (PSA) test or a test consistent 3 with approved medical standards and practices, as deemed 4 medically necessary. 5 (vii) For men 40 years of age or older with a family 6 history of prostate cancer or other prostate cancer risk 7 factors, an annual prostate specific antigen (PSA) test 8 or a test consistent with approved medical standards and 9 practices, as deemed medically necessary. 10 (viii) For individuals 50 years of age or older, an 11 annual fecal occult blood test and, every fourth year 12 after an individual reaches 50 years of age, a 13 sigmoidoscopy or a test consistent with approved medical 14 standards and practices to detect colon cancer. 15 (5) The hospital must submit an application for 16 distributions on a form approved by the department. 17 (b) Report to General Assembly.--On or before February 1 of 18 each year, the department shall transmit to the General Assembly 19 a list of hospitals that received distributions under this act. 20 Section 6. Distribution formula. 21 (a) General rule.--The department shall promulgate a formula 22 for the distribution of funds under this act which shall 23 include, but need not be limited to, the factors set forth in 24 subsection (b). Where possible any factors used by the 25 department shall take an average of the three most recent and 26 available fiscal years of a hospital. 27 (b) Factors.--The factors that must be considered are: 28 (1) the ratio of the sum of bad debt expense and charity 29 care to the net patient revenue of the hospital; 30 (2) the Medicare and Medicaid percentages of net patient 19990S1238B1586 - 5 -
1 revenue of the hospital; and 2 (3) the operating margin of the hospital. 3 Section 7. Rules and regulations. 4 The department shall promulgate rules and regulations to 5 administer and enforce this act. 6 Section 8. Expiration. 7 This act expires in three years unless extended by statute. 8 Section 9. Effective date. 9 This act shall take effect immediately. L6L35SFL/19990S1238B1586 - 6 -