PRINTER'S NO. 260
No. 254 Session of 2003
INTRODUCED BY TOMLINSON, RHOADES, ORIE, ERICKSON, TARTAGLIONE
AND WOZNIAK, FEBRUARY 10, 2003
REFERRED TO BANKING AND INSURANCE, FEBRUARY 10, 2003
AN ACT
1 Requiring health insurers to disclose fee schedules and all
2 rules and algorithms relating thereto; requiring health
3 insurers to provide full payment to physicians when more than
4 one surgical procedure is performed on the patient by the
5 same physician during one continuous operating procedure; and
6 providing for causes of action and for penalties.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Short title.
10 This act shall be known and may be cited as the Fee Schedule
11 Disclosure and Multiple Surgical Procedures Policy Act.
12 Section 2. Legislative findings.
13 The General Assembly finds that:
14 (1) A majority of physicians in this Commonwealth are
15 reimbursed for their services to patients by third-party
16 payors. In some cases, this contractual relationship between
17 physician and insurer has existed for years without the
18 physician receiving from the insurer a formal contract or an
19 accurate or complete fee schedule detailing fees or the rules
1 or algorithms that actually define the rates at which
2 physicians are compensated for the services they render to
3 the payors' insureds. Most health care insurers in this
4 Commonwealth refuse to fully and accurately disclose their
5 fee schedules to participating physicians; therefore, doctors
6 do not know and cannot find out what they will receive in
7 compensation prior to performing a service. This insurer
8 policy is manifestly unfair to physicians; it is a breach of
9 the physicians' contracts; and it facilitates further
10 breaches of such contracts by making it impossible for
11 physicians to enforce their right to full payment for
12 services rendered.
13 (2) During the course of a single operative session, a
14 surgeon may perform multiple surgical procedures on the
15 patient. These multiple surgical procedures are separate and
16 distinct operations in layman's terms and as defined by the
17 current procedure terminology coding system created by the
18 American Medical Association and other professional medical
19 societies. The General Assembly further finds that the
20 Current Procedural Terminology (CPT) Coding System is
21 utilized by all physicians to identify to payors the services
22 rendered by physicians and that payors purport to adopt the
23 same CPT Coding System in defining the services for which
24 they compensate such physicians. The General Assembly also
25 finds, however, that, contrary to the dictates of the CPT
26 Coding System and without disclosing any such deviation to
27 the physicians with whom they contract, a number of health
28 care insurers in this Commonwealth compensate physicians as
29 if the procedures performed in addition to the primary
30 procedure were merely incidental to the primary procedure and
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1 therefore such payors will compensate the surgeon for only
2 one procedure. This insurer policy is inconsistent with the
3 medical judgments upon which the CPT Coding System is based,
4 it is not accurately disclosed to physicians, it is
5 manifestly unfair to surgeons, it leads to a lack of access
6 to quality health care services for patients, and it adds to
7 the excess profits insurers take from the health care
8 delivery system.
9 Section 3. Declaration of intent.
10 The General Assembly hereby declares that it is the policy of
11 this Commonwealth that physicians should receive from health
12 care insurers a complete and accurate schedule of the
13 reimbursement fees, including any rules or algorithms utilized
14 by the payor to determine the amount a physician will be
15 compensated if more than one procedure is performed during a
16 single treatment session. The General Assembly further declares
17 that it is the policy of this Commonwealth that insurers must
18 comply with their contractual obligations and that surgeons
19 should be fairly and justly compensated for all surgical
20 procedures they perform in a single operative session.
21 Section 4. Definitions.
22 The following words and phrases when used in this act shall
23 have the meanings given to them in this section unless the
24 context clearly indicates otherwise:
25 "Fee schedule." The generally applicable monetary allowance
26 payable to a participating physician for services rendered as
27 provided for by agreement between the participating physician
28 and the insurer, including, but not limited to, a list of
29 Healthcare Common Procedure Coding System (HCPCS) Level I
30 Current Procedural Terminology (CPT) Codes, HCPCS Level II
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1 National Codes and HCPCS Level III Local Codes and the fees
2 associated therein; and a delineation of the precise methodology
3 used for determining the generally applicable monetary
4 allowances, including, but not limited to, footnotes describing
5 formulas, algorithms, rules and calculations associated with
6 determination of the individual allowances.
7 "HCPCS." HCFA (Health Care Financing Administration) Common
8 Procedural Coding System, a uniform method for health care
9 providers and medical suppliers to report professional services,
10 procedures, pharmaceuticals and supplies.
11 "HCPCS Level I CPT Codes." The descriptive terms and
12 identifying codes used in reporting supplies and pharmaceuticals
13 used by and services and procedures performed by participating
14 physicians as listed in the American Medical Association's
15 Physician's Current Procedural Terminology (CPT).
16 "HCPCS Level II National Codes." Descriptive terms and
17 identifying codes used in reporting supplies and pharmaceuticals
18 used by and services and procedures performed by participating
19 physicians.
20 "HCPCS Level III Local Codes." Descriptive terms and
21 identifying codes used in reporting supplies and pharmaceuticals
22 used by and services and procedures performed by participating
23 physicians which are assigned and maintained by Pennsylvania's
24 Centers for Medicare and Medicaid Services carrier.
25 "Insurer." Any insurance company, association or exchange
26 authorized to transact the business of insurance in this
27 Commonwealth. This shall also include any entity operating under
28 any of the following:
29 (1) Section 630 of the act of May 17, 1921 (P.L.682,
30 No.284), known as The Insurance Company Law of 1921.
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1 (2) Article XXIV of the act of May 17, 1921 (P.L.682,
2 No.284), known as The Insurance Company Law of 1921.
3 (3) The act of December 29, 1972 (P.L.1701, No.364),
4 known as the Health Maintenance Organization Act.
5 (4) 40 Pa.C.S. Ch. 61 (relating to hospital plan
6 corporations).
7 (5) 40 Pa.C.S. Ch. 63 (relating to professional health
8 services plan corporations).
9 (6) 40 Pa.C.S. Ch. 67 (relating to beneficial
10 societies).
11 "Participating physician." An individual licensed under the
12 laws of this Commonwealth to engage in the practice of medicine
13 and surgery in all its branches within the scope of the act of
14 December 20, 1985 (P.L.457, No.112), known as the Medical
15 Practice Act of 1985, or in the practice of osteopathic medicine
16 within the scope of the act of October 5, 1978 (P.L.1109,
17 No.261), known as the Osteopathic Medical Practice Act, who by
18 agreement provides services to an insurer's subscribers.
19 Section 5. Disclosure of fee schedules.
20 Within 30 days of the effective date of this act, insurers
21 shall provide their participating physicians with a copy of
22 their fee schedule, including all applicable rules and
23 algorithms utilized by the insurer to determine the amount any
24 such physician will be compensated for performing any single
25 procedure and any group of procedures during a single treatment
26 session, which are applicable on July 1, 2002, and annually
27 thereafter. Insurers shall also provide participating physicians
28 with updates to the fee schedule as modifications occur.
29 Section 6. Procedure for payment of multiple surgical
30 procedures.
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1 When a participating physician performs more than one
2 surgical procedure on the same patient and at the same operative
3 session, insurers shall pay the participating physician the
4 greater of the amount calculated on the basis of the applicable
5 insurer fee schedule and:
6 (1) any rules, algorithms, codes, or modifiers included
7 therein, governing reimbursement for multiple surgical
8 procedures; or
9 (2) the principles governing reimbursement for multiple
10 surgical procedures set forth and established by the Centers
11 for Medicare and Medicaid Services within the United States
12 Department of Health and Human Services, including the rule
13 mandating payment to the physician of:
14 (i) 100% of the generally applicable maximum
15 monetary allowance for the procedure which has the
16 highest monetary allowance.
17 (ii) 50% of the generally applicable maximum
18 monetary allowance for the second through fifth
19 procedures with the next highest values.
20 (iii) For more than five surgical procedures, such
21 payment amount as is determined following submission of
22 documentation and individual review.
23 Section 7. Contract provisions.
24 Any provision in any contract, insurer policy or fee schedule
25 that is inconsistent with any provision of this act is hereby
26 declared to be contrary to the public policy of the Commonwealth
27 and is void and unenforceable.
28 Section 8. Violations.
29 An insurer violates:
30 (1) Section 5 if the insurer fails to provide a
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1 participating physician with a copy of the fee schedule and
2 updates to the fee schedule in the time frame provided in
3 section 5.
4 (2) Section 6 if the insurer fails to adhere to the
5 policy for payment of multiple surgeries as set forth and
6 established by the Centers for Medicare and Medicaid Services
7 within the Department of Health and Human Services.
8 Section 9. Cause of action.
9 In addition to all statutory, common law and equitable causes
10 of action which already exist, a participating physician shall
11 have a private cause of action for any violation of any
12 provision of this act to enforce the provisions of this act. A
13 participating physician shall be entitled to recover from an
14 insurer any legal fees and costs associated with any suit
15 brought under this section.
16 Section 10. Termination of agreement.
17 In addition to other remedies provided in this act, a
18 participating physician may terminate his agreement if an
19 insurer violates the provisions of this act. The physician may
20 continue to provide services to the insurer's insureds and shall
21 receive compensation as an out-of-network provider.
22 Section 11. Penalties.
23 Violations of this act shall be considered violations of the
24 act of May 17, 1921 (P.L.682, No.284), known as The Insurance
25 Company Law of 1921, and are subject to the penalties and
26 sanctions of section 2182 of The Insurance Company Law of 1921.
27 Section 12. Effective date.
28 This act shall take effect immediately.
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