PRINTER'S NO. 3075
No. 2318 Session of 2000
INTRODUCED BY COSTA, DeWEESE, VEON, DeLUCA, BELARDI, READSHAW,
WALKO, TRELLO, VAN HORNE, MICHLOVIC, FRANKEL, GRUCELA,
SOLOBAY, YUDICHAK, FREEMAN, CURRY, DALEY, MANN, STURLA,
STABACK, GEORGE, HARHAI, HORSEY, JOSEPHS, LAUGHLIN, MELIO,
MYERS, ROONEY, SHANER, STEELMAN, TANGRETTI, THOMAS,
TRAVAGLIO, YOUNGBLOOD AND BROWNE, MARCH 7, 2000
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
MARCH 7, 2000
AN ACT
1 Providing for Medicaid Patient Protection, for powers and duties
2 of Department of Public Welfare, for rights of beneficiaries,
3 for application to existing contracts, for provider
4 protections and for grievances.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Short title.
8 This act shall be known and may be cited as the Medicaid
9 Patient Protection Act.
10 Section 2. Findings.
11 The General Assembly finds as follows:
12 (1) The medical assistance program provides health
13 insurance coverage for approximately 1.4 million
14 Pennsylvanians at a cost of over $6,000,000,000 annually.
15 (2) The Department of Public Welfare is moving the
16 health care service component of the medical assistance
1 program toward Statewide mandatory managed care through
2 contracts with private vendors for prepaid medical services.
3 Over half of the beneficiaries are currently enrolled in
4 managed care organizations.
5 (3) There is no clear state statutory or regulatory
6 framework for the medical assistance managed care program;
7 the existing program operates exclusively based on the
8 provisions of these contracts.
9 (4) Consequently, the General Assembly finds that there
10 is a clear and compelling need to establish a basic statutory
11 framework for Medicaid Managed Care, including establishing
12 the basic responsibilities of the department, the basic
13 duties and obligations of the contractors and the basic
14 rights of beneficiaries.
15 Section 3. Definitions.
16 The following words and phrases when used in this act shall
17 have the meanings given to them in this section unless the
18 context clearly indicates otherwise:
19 "Alternative contractor." An entity other than a health
20 maintenance organization licensed by the Department of Health
21 and the Insurance Department. The term includes all risk-
22 assuming physician hospital organizations, preferred provider
23 organizations, county governments, pharmacies, durable medical
24 equipment providers, federally qualified health centers and
25 provider sponsored organizations.
26 "Appeal." A request for reversal of a denial of service.
27 "Complaint." An issue presented to a managed care
28 organization, in either written or oral form.
29 "Contractor." An entity which contracts with the Department
30 of Public Welfare to provide prepaid medical services under the
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1 act of June 13, 1967 (P.L.31, No.21), known as the Public
2 Welfare Code.
3 "Denial of service." A determination made by a managed care
4 organization or subcontractor or failure to act in response to a
5 qualified provider's or consumer's request for approval to
6 provide in-plan services of a specific duration and scope which:
7 (1) disapproves the request completely;
8 (2) approves provision of the requested service, but for
9 a lesser scope or duration than requested; or
10 (3) disapproves provision of the requested service, but
11 approves provision of an alternative service.
12 "Department." The Department of Public Welfare of the
13 Commonwealth.
14 "Emergency services." A condition that a reasonable person
15 would believe would result in death or serious bodily injury if
16 not treated, including active labor, or where services are
17 needed to evaluate or stabilize such a condition.
18 "Enrollee." A person eligible to receive services under the
19 medical assistance program who is enrolled in the HealthChoices
20 Program.
21 "Fair hearing." A hearing conducted by the Bureau of
22 Hearings and Appeals of the Department of Public Welfare in
23 response to an appeal.
24 "Grievance." A complaint which cannot be resolved to the
25 member's satisfaction or an issue presented by the member to a
26 managed care organization for grievance consideration. To the
27 extent this definition is not in accordance with the act of June
28 17, 1998 (P.L.464, No.68), entitled "An act amending the act of
29 May 17, 1921 (P.L.682, No.284), entitled 'An act relating to
30 insurance; amending, revising, and consolidating the law
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1 providing for the incorporation of insurance companies, and the
2 regulation, supervision, and protection of home and foreign
3 insurance companies, Lloyds associations, reciprocal and inter-
4 insurance exchanges, and fire insurance rating bureaus, and the
5 regulation and supervision of insurance carried by such
6 companies, associations, and exchanges, including insurance
7 carried by the State Workmen's Insurance Fund; providing
8 penalties; and repealing existing laws,' providing for
9 automobile insurance issuance, renewal, cancellation and
10 refusal; providing for quality health care accountability and
11 protection, for responsibilities of managed care plans, for
12 disclosure, for utilization review, for complaints and
13 grievances, for departmental powers and duties and for
14 penalties; providing for comprehensive health care for uninsured
15 children; and making repeals," this act shall apply.
16 "HealthChoices Program." Pennsylvania's program to provide
17 mandatory managed health care to medical assistance consumers.
18 "Managed care organization." An entity which manages the
19 purchase and provision of physical or behavioral health services
20 under the HealthChoices Program.
21 "Medical assistance consumer." A person eligible to receive
22 services under the medical assistance program.
23 "Medical assistance program." The program established and
24 operated by the Department of Public Welfare pursuant to
25 Subarticle (f) of Article IV of the act of June 13, 1967
26 (P.L.31, No.21), known as the Public Welfare Code.
27 "Medical necessity." A determination of medical necessity
28 for covered care and services, whether made on a prior
29 authorization, concurrent review or post-utilization basis.
30 "Member." An enrollee.
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1 "Plan." A managed care organization which manages the
2 purchase and provision of physical or behavioral health
3 services.
4 "Provider." A person, firm or corporation enrolled in the
5 Pennsylvania Medical Assistance Program, which provides services
6 or supplies to medical assistance consumers.
7 "Subcontractor." An individual, business firm, university,
8 governmental entity or nonprofit organization having a contract
9 to perform part or all of a managed care organization's
10 responsibilities under a contract with the Department of Public
11 Welfare. The term does not cover contracts with utilities or
12 salaried employees.
13 Section 4. Powers and duties of department.
14 (a) General rule.--The department shall establish a sound
15 quality review process and shall monitor the quality of care
16 performed by managed care organizations contracting with the
17 department.
18 (b) Reports.--The department shall provide the following
19 reports, information and data to the General Assembly and make
20 them publicly available:
21 (1) The department shall conduct independent actuarial
22 reviews of the rates for prepaid medical services. The
23 department shall no less than every three years contract to
24 have an independent actuarial assessment of the rate
25 determination process used by the department, including
26 review of reimbursement for impact upon quality and the
27 adequacy of rates paid to each contractor.
28 (2) The department shall audit plans' compliance with
29 their contracts annually, including all standards specified
30 in Federal and State law.
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1 (3) The department shall require each contractor to
2 submit annually data that allows the department and consumers
3 to evaluate and compare the performance and quality of care
4 offered by each contractor. In consultation with the Medical
5 Assistance Advisory Committee, quality experts, managed care
6 organizations and other stakeholders, the department shall
7 annually establish performance and quality indicators it will
8 use and shall require each contractor to provide the
9 information and data in a timely fashion.
10 (4) The department shall annually prepare region-by-
11 region report cards allowing the comparison of contractors
12 and shall provide these report cards to each beneficiary. At
13 a minimum, the department shall require each contractor to
14 provide the following information.
15 (i) The results of an annual consumer satisfaction
16 survey based on a protocol established by the department.
17 The department shall include standard questions developed
18 by the department, a survey instrument approved by the
19 department and a survey technique endorsed by the
20 department. The survey shall include beneficiaries who
21 are former members as well as current members of a
22 contractor's plan.
23 (ii) Indicators incorporated into contracts for
24 prepaid health services in force prior to the effective
25 date of this act.
26 (iii) Indicators used by the National Committee for
27 Quality Assurance HEDIS system.
28 (iv) Indicators used by the Foundation for
29 Accountability.
30 (v) The most current medical loss ratio for the
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1 contractor.
2 (vi) Quarterly data on emergency room claims and
3 denials.
4 (vii) The number and percentage of children who have
5 been fully immunized pursuant to the schedule adopted by
6 the American Academy of Pediatrics.
7 (viii) The number and percentage of women who
8 received prenatal care in the first trimester of their
9 pregnancies.
10 (ix) The number and percentage of low birth weight
11 children as a percentage of all live births, as well as
12 the number of live births as a percentage of all births.
13 (x) The number and percentage of all beneficiaries
14 who had a physical examination and well patient visit
15 within the prior year.
16 (xi) The incidence of renal examinations within the
17 past 24 months, hospitalization for inpatient diabetes-
18 related treatment and other indicators of treatment of
19 diabetes and diabetes-related illnesses.
20 (xii) The incidence of inpatient hospitalization of
21 children under 21 years of age for asthma and asthma-
22 related illnesses.
23 (xiii) The percentage of women with annual
24 mammograms, percentage of women detected with stage 0 or
25 stage 1 breast cancer and the incidence of radical
26 mastectomies and breast conserving surgeries.
27 (xiv) The percentage of members living with human
28 immunodeficiency virus (HIV)/acquired immune deficiency
29 syndrome (AIDS) who are currently receiving the medical
30 care and prescriptions associated with Highly Active
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1 Anti-Retroviral Therapy (HAART).
2 (xv) The number of appeals by reason code, the
3 number of fair hearings and their outcomes, the number of
4 complaints by reason and the number of resolved appeals
5 at levels 1 and 2.
6 (5) The department shall require each plan to separate
7 from their quarterly financial reports filed with the
8 department and the Insurance Department the following
9 information, separately, for both contracted medical
10 assistance services and their entire line of services:
11 (i) Medical loss ratio.
12 (ii) Administrative expense ratio.
13 (iii) Enrollment, disenrollment and total member
14 months.
15 (iv) Unpaid claims per member per month.
16 (v) Patient days per 1,000 enrollees.
17 (vi) Days in unpaid claims.
18 (vii) Net profit.
19 (viii) Claims as a percent of revenues.
20 (6) The department shall require each contractor to
21 maintain adequate numbers and types of specialists to ensure
22 that specialty services can be made available in a timely and
23 geographically accessible manner, particularly behavioral
24 health providers, dentists, pediatric primary care providers
25 and specialists, home health services providers, durable
26 medical equipment suppliers, federally qualified health
27 centers and community health centers with federally qualified
28 health centers level of care.
29 (7) In promulgating regulations under this act, the
30 department shall specify the scope of services required,
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1 standards for service networks, enrollment and disenrollment
2 procedures and measures necessary to ensure that the
3 requirements contained in contracts between the department
4 and plans are clear and consistent. At a minimum, regulations
5 must require plans to:
6 (i) Offer adequate numbers of primary care
7 providers.
8 (ii) Give members sufficient information about
9 choice of providers and plans.
10 (iii) Make appropriate provider assignments.
11 (iv) Allow members to switch primary care and
12 specialist providers either on a regular or an emergency
13 basis.
14 (v) Allow standing referrals in appropriate
15 circumstances.
16 (vi) Permit certain specialists to act as primary
17 care providers.
18 (vii) Educate members and providers about referral
19 procedures.
20 (viii) Arrange out-of-network services when
21 necessary.
22 (ix) Conform to a uniform drug formulary standard
23 established by the department in consultation with the
24 department's medical assistance advisory committee.
25 (x) Provide a 72-hour supply of medications for
26 enrollees for prescriptions which cannot be filled
27 because the prescribed medication is nonformulary or
28 because prior authorization has not been obtained or
29 because the consumer's eligibility status is in dispute.
30 (xi) Maintain a unit that responds immediately to
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1 requests for off-formulary requests where medically
2 indicated.
3 (xii) Maintain approved and authorized services
4 until the time of periodic reviews or receipt of
5 information indicating a material change in circumstances
6 of the enrollee.
7 (xiii) Provide instruction and forms along with
8 notice of a plan's need for additional information to
9 determine whether to approve or deny a service which
10 requires prior authorization where a provider has
11 properly requested the service.
12 (xiv) Maintain and staff a 24-hour, seven-day-a-week
13 toll-free hotline to respond to enrollees' inquiries,
14 problems and to take oral grievances and complaints and
15 assist enrollees in reducing them to writing.
16 (c) Alternative contracts.--The department may contract for
17 the provision of prepaid medical services with alternative
18 contractors if the contractors obtain a certificate of authority
19 from the Insurance Department and the Department of Health.
20 (d) Notice of plan submissions.--The department shall
21 publish notice of State plan submissions and amendments, invite
22 written comments and hold public hearings.
23 (e) Rules and regulations.--The department shall establish
24 such other rules, regulations and standards as may be necessary
25 and are consistent with Federal and State law pertaining to
26 enrollment of medical assistance consumers in managed care.
27 Section 5. Rights of beneficiaries.
28 All the rights and privileges accorded medical assistance
29 consumers under Federal and State law or contract shall continue
30 to be available and will not be adversely affected by provisions
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1 of this act. Medical assistance consumers shall have the right:
2 (1) To participate in experimental treatments, clinical
3 trials and alternative treatments.
4 (2) To continue in the care of a physician who no longer
5 is a member of a network for 180 days or, in the case of a
6 pregnant woman, for the duration of her pregnancy.
7 (3) To use a specialist as a primary care provider if
8 the enrollee is chronically ill or disabled. The department
9 shall adopt standards to facilitate this arrangement.
10 (4) To sue the contractor if denial of care by the
11 contractor or the contractor's agent results in improper or
12 inadequate care.
13 (5) Not to be denied any covered medically necessary
14 benefit based solely on the presence or absence of a
15 particular diagnosis or condition or because the recipient's
16 condition is chronic, developmental, long-term, will not
17 improve or is stable.
18 (6) To receive a response within three minutes to calls
19 made to any person employed by a contractor or a benefits
20 management subcontractor who could prevent or delay the
21 delivery of medical benefits by a failure to respond to a
22 telephone contact.
23 (7) To be assured access to all medical assistance
24 services to which they are entitled even if the service is
25 not reasonably available in an appropriate and timely manner
26 directly or indirectly from the managed care organization or
27 because of an emergency or geographic unavailability.
28 (8) To a 72-hour supply of medication when it has been
29 prescribed but where a form of payment cannot be confirmed,
30 prior authorization has not been obtained or the prescription
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1 is nonformulary.
2 (9) To standards for uniformity among drug formularies
3 and prior authorization processes which protect recipients'
4 health and safety.
5 (10) To access to quality indicators which Federal and
6 State law require that plans make available to the
7 department, including results of plan quality studies,
8 external reviews and compliance audits.
9 (11) To quality assurance provisions relating to the
10 scope, accessibility, reasonableness, adequacy and continuity
11 of medical care, services and supplies in the medical
12 assistance managed care program; the recruitment,
13 organization and adequacy of the provider network; and
14 methods and rates of payment and reimbursement which ensure
15 all of the above.
16 (12) To due process under the law, including the
17 following due process protections:
18 (i) Clinical decisions made by qualified clinicians.
19 (ii) Grievance procedures accessible to enrollees
20 who do not speak English or whose access may be limited
21 by hearing or visual impairment or other physical
22 disabilities.
23 (iii) Expedited, 48-hour, review if delay would
24 significantly increase the risk to an enrollee's health.
25 (iv) Specified time frames for plans to reach
26 decisions.
27 (v) Access to an independent medical assistance
28 consumer assistance program to assist enrollees in filing
29 complaints, grievances and hearing requests, as well as
30 in attempts to resolve problems informally; and provision
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1 of representation in the grievance and hearing processes.
2 (vi) Department fair hearing in addition to in-plan
3 grievances and any other rights and remedies available
4 under the law.
5 (13) When an enrollee responds to a notice with a timely
6 request for a grievance, complaint or fair hearing, the
7 service or benefit shall be continued pending completion of
8 the appeal process or a fair hearing decision.
9 Section 6. Application to existing contracts.
10 To the extent that the provisions of this act materially
11 affect the terms and conditions of an existing contract for
12 prepaid medical services, the provisions of the contract shall
13 remain in force until the contract is reopened or renegotiated.
14 For the purposes of this section, the adjustment of rates shall
15 constitute a reopening of a contract. The provisions of section
16 4(d) and (e) do not materially affect the terms and conditions
17 of an existing contract and, therefore, do not require the
18 reopening of a contract in order to be implemented.
19 Section 7. Provider protections.
20 The department shall require each plan to contract on an
21 equal basis with any pharmacy, federally qualified health center
22 or durable medical equipment supplier qualified to participate
23 in the medical assistance program if the pharmacy, federally
24 qualified health center or equipment supplier is willing to
25 comply with the managed care organization's payment rates and
26 terms and to adhere to quality standards established by the
27 department.
28 Section 8. Grievances.
29 All grievances shall be committed to written form prior to
30 processing, either by the member, the provider, the provider on
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1 behalf of the member of the managed care organization; and the
2 grievance log must be available to enrollees.
3 Section 9. Determinations of medical necessity.
4 A determination of medical necessity shall be in writing and
5 be compensable under medical assistance. The managed care
6 organization shall base its determination on medical information
7 provided by the member, the member's family or caretaker and the
8 primary care physician, as well as any other providers, programs
9 and agencies that have evaluated the member. Medical necessity
10 determinations must be made by qualified and trained providers.
11 Satisfaction of any one of the following standards requires
12 authorization of the service:
13 (1) The service or benefit will or is reasonably
14 expected to prevent the onset of an illness, condition or
15 disability.
16 (2) The service or benefit will or is reasonably
17 expected to reduce or ameliorate the physical, mental or
18 developmental effects of an illness, condition, injury or
19 disability.
20 (3) The service or benefit will or is reasonably
21 expected to assist the member to achieve or maintain maximum
22 functional capacity in performing daily activities, taking
23 into account both the functional capacity of the member and
24 those functional capacities that are appropriate for members
25 of the same age.
26 Section 10. Severability.
27 The provisions of this act are severable. If any provision of
28 this act or its application to any person or circumstance is
29 held invalid, the invalidity shall not affect other provisions
30 or applications of this act which can be given effect without
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1 the invalid provision or application.
2 Section 11. Effective date.
3 This act shall take effect in 60 days.
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