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| PRIOR PRINTER'S NOS. 1766, 1825 | PRINTER'S NO. 1839 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY D. WHITE, STACK, ERICKSON, WAUGH, BAKER, SCHWANK, PILEGGI, EARLL, RAFFERTY, ORIE, SOLOBAY, BROWNE AND PIPPY, NOVEMBER 10, 2011 |
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| AS AMENDED ON SECOND CONSIDERATION, DECEMBER 6, 2011 |
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| AN ACT |
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1 | Amending the act of December 18, 1996 (P.L.1066, No.159), |
2 | entitled "An act providing for review procedures pertaining |
3 | to accident and health insurance form and rate filings; |
4 | providing penalties; and making repeals," dividing the act |
5 | into Federal compliance and Commonwealth exclusivity; in |
6 | Federal compliance, further providing for definitions, for |
7 | required filings, for review procedure, for notice of |
8 | disapproval, for use of disapproved forms or rates, for |
9 | review of form or rate disapproval, for disapproval after |
10 | use, for filing of provider contracts, for record |
11 | maintenance, for public comment and for penalties and |
12 | providing for regulations and for expiration; in Commonwealth |
13 | exclusivity, providing for regulations and for action by the |
14 | Insurance Commissioner; and making editorial changes. |
15 | The General Assembly of the Commonwealth of Pennsylvania |
16 | hereby enacts as follows: |
17 | Section 1. The act of December 18, 1996 (P.L.1066, No.159), |
18 | known as the Accident and Health Filing Reform Act, is amended |
19 | by adding a chapter heading to read: |
20 | CHAPTER 1 |
21 | PRELIMINARY PROVISIONS |
22 | Section 2. Section 1 of the act is renumbered to read: |
23 | Section [1] 101. Short title. |
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1 | This act shall be known and may be cited as the Accident and |
2 | Health Filing Reform Act. |
3 | Section 3. The act is amended by adding a chapter heading to |
4 | read: |
5 | CHAPTER 3 |
6 | FEDERAL COMPLIANCE |
7 | Section 4. The introductory paragraph and the definitions of |
8 | "group accident and health insurance" and "insurer" in section 2 |
9 | of the act are amended, the section is amended by adding a |
10 | definition and the section is renumbered to read: |
11 | Section [2] 301. Definitions. |
12 | The following words and phrases when used in this [act] |
13 | chapter shall have the meanings given to them in this section |
14 | unless the context clearly indicates otherwise: |
15 | * * * |
16 | "Group accident and health insurance." A form affording |
17 | insurance coverage against death, injury, disablement, disease |
18 | or sickness resulting from an accident and covering [more than |
19 | one person] a large or small group. The term shall not include |
20 | blanket accident insurance policies or franchise accident and |
21 | sickness insurance policies as defined in [section] sections |
22 | 621.3 and 621.4 of the act of May 17, 1921 (P.L.682, No.284), |
23 | known as The Insurance Company Law of 1921. |
24 | * * * |
25 | "Insurer." A foreign or domestic company, association or |
26 | exchange, hospital plan corporation, professional health |
27 | services plan corporation, fraternal benefits society, health |
28 | maintenance organization and risk-assuming preferred provider |
29 | organization. |
30 | * * * |
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1 | "Small group." A group that purchases accident and health |
2 | insurance in the small group market, as defined in section |
3 | 2791(e)(5) of the Public Health Service Act (110 Stat. 1972, 42 |
4 | U.S.C. § 300gg-91(e)(5)), provided, however, that for plan years |
5 | beginning prior to January 1, 2016, or other date as established |
6 | in Federal law, "50 employees" is substituted for "100 |
7 | employees" in the definition of "small employer" in section |
8 | 2791(e)(4) of the Public Health Service Act. |
9 | * * * |
10 | Section 4.1. The act is amended by adding a section to read: |
11 | Section 302. (Reserved). |
12 | Section 5. Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 |
13 | of the act are amended to read: |
14 | Section [3] 303. Required filings. |
15 | (a) Form filings.--Each insurer [and HMO] shall file with |
16 | the department any form which it proposes to issue in this |
17 | Commonwealth except a type or kind of form which, in the opinion |
18 | of the commissioner, does not require filing. The form filings |
19 | required by this section shall be made no less than 45 days, or |
20 | a shorter period of time as the department may establish, prior |
21 | to their effective dates. The filings shall be subject to filing |
22 | and review in accordance with the provisions of section 304. |
23 | (b) Notice of exemption from form filing.--The commissioner |
24 | shall issue notice in the Pennsylvania Bulletin identifying any |
25 | type or kind of form which has been exempted from filing. The |
26 | commissioner may subsequently require the forms to be filed |
27 | under this section upon notice published in the Pennsylvania |
28 | Bulletin. Any such subsequent notice shall not be effective |
29 | until 90 days after publication. |
30 | (c) Individual rates.--Each insurer [and HMO] shall file |
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1 | with the department rates for individual accident and health |
2 | insurance policies which it proposes to use in this Commonwealth |
3 | except those rates which, in the opinion of the commissioner, |
4 | cannot practicably be filed before they are used. The |
5 | commissioner shall publish notice in the Pennsylvania Bulletin |
6 | identifying rates which the commissioner determines cannot |
7 | practicably be filed. The filings required by this subsection |
8 | shall be made no less than 45 days, or a shorter period of time |
9 | as the department may establish, prior to their effective dates. |
10 | The filings shall be subject to filing and review in accordance |
11 | with the provisions of section 304. |
12 | (d) Certain group rates exempt.--Except as provided in |
13 | subsection (e), an insurer shall not be required to file with |
14 | the department rates for accident and health insurance policies |
15 | which it proposes to issue on a group[, blanket or franchise] |
16 | basis in this Commonwealth. |
17 | (e) Required group rate filings.--Each [hospital plan |
18 | corporation, professional health services plan corporation and |
19 | HMO] insurer shall file with the department rates for small |
20 | group accident and health insurance policies which it proposes |
21 | to issue on a group[, blanket or franchise] basis in this |
22 | Commonwealth for other than excepted benefits as defined in | <-- |
23 | section 2791(c) of the Public Health Service Act (110 Stat. |
24 | 1972, 42 U.S.C. § 300gg-91(c)) in accordance with the following: |
25 | (1) Each [hospital plan corporation, professional health |
26 | services plan corporation and HMO] insurer shall establish |
27 | and file with the department prior to use a base rate which |
28 | is not excessive, inadequate or unfairly discriminatory. The |
29 | initial base rate for existing hospital plan corporations, |
30 | professional health services plan corporations and HMOs shall |
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1 | be the rate or the rating formula currently on file and |
2 | approved by the department as of the effective date of [this |
3 | act] section 314. The initial base rate or base rating |
4 | formula for any [hospital plan corporation, professional |
5 | health services plan corporation or HMO] insurer with no base |
6 | rate or base rating formula on file and approved as of the |
7 | effective date of [this act] section 314 shall be [subject to |
8 | filing, review and prior approval by the department] the base |
9 | rate or base rating formula in effect on the effective date |
10 | of section 314, and shall be filed with the department no |
11 | more than 45 days thereafter. |
12 | (2) Proposed changes to [an approved] a base rate or |
13 | [any approved component of an approved] base rating formula |
14 | which effect an increase or decrease in the [approved] base |
15 | rate or [in an approved component of an approved] base rating |
16 | formula of [more than] 10% or more annually in the aggregate |
17 | shall be subject to filing[,] and review [and prior approval] |
18 | by the department in accordance with the provisions of |
19 | section 304. The filings required by this paragraph shall be |
20 | made no less than 45 days, or a shorter period of time as the |
21 | department may establish, prior to their effective dates. |
22 | (3) Proposed changes to [an approved] a base rate or |
23 | [any approved component of an approved] base rating formula |
24 | which effect an increase or decrease in the [approved] base |
25 | rate or [in an approved component of an approved] base rating |
26 | formula of [not more] less than 10% annually in the aggregate |
27 | shall be [subject to filing and review in accordance with the |
28 | provisions of section 4] filed with the department and may be |
29 | used 45 days thereafter. |
30 | (4) Rates developed for a specific group which do not |
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1 | deviate from the base rate or base rate formula by more than |
2 | 15% may be used without filing with the department. |
3 | (5) Rates developed for a specific group which deviate |
4 | from the base rate or base rate formula by more than 15% |
5 | shall be subject to filing and review in accordance with the |
6 | provisions of section [4] 304. The filings required by this |
7 | paragraph shall be made no less than 45 days, or a shorter |
8 | period of time as the department may establish, prior to |
9 | their effective dates. |
10 | (6) The commissioner shall have discretion to exempt any |
11 | type or kind of rate filing under this subsection by |
12 | regulation except for filings required under subsection (c) |
13 | and paragraph (2). |
14 | [(f) Applicability of filings.--All filings required by this |
15 | section shall be made no less than 45 days prior to their |
16 | effective dates. Filings under subsection (e)(1) and (2) shall |
17 | be deemed approved at the expiration of 45 days after filing |
18 | unless earlier approved or disapproved by the commissioner. The |
19 | commissioner, by written notice to the insurer, may within such |
20 | 45-day period extend the period for approval or disapproval for |
21 | an additional 45 days. All other filings under this section |
22 | shall become effective as provided in section 4.] |
23 | (f) Power of the department.--The department may, at the |
24 | discretion of the commissioner through notice in the |
25 | Pennsylvania Bulletin, adjust the 10% threshold set forth in |
26 | subsection (e)(2) and (3) only for purposes of coordinating the |
27 | filing requirements of this section to a state-specific |
28 | percentage determined by the Secretary of the United States |
29 | Department of Health and Human Services. |
30 | Section [4] 304. Review procedure. |
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1 | (a) General rule.--Filings under section 303(c) and (e)(1), |
2 | (2) and (5) shall be reviewed as appropriate and necessary to |
3 | carry out the provisions of this [act] chapter. [Unless a filing |
4 | is disapproved by the department within the 45-day period |
5 | provided in section 3(f), filings made under section 3 shall |
6 | become effective for use 45 days following: |
7 | (1) the expiration of any public comment period |
8 | established by the commissioner under section 11; or |
9 | (2) receipt of the filing by the department if no public |
10 | comment period is established.] The following apply: |
11 | (1) Unless a filing that is subject to review under |
12 | section 303(c) or (e)(1), (2) or (5) is earlier disapproved |
13 | by the department, or the department, by written notice to |
14 | the insurer, extends the period for approval or disapproval |
15 | for an additional 45 days, the filings shall be deemed |
16 | approved 45 days following receipt of the filing by the |
17 | department. |
18 | (2) Unless a resubmitted filing made under subsection |
19 | (c) is earlier disapproved by the department, the resubmitted |
20 | filing shall be deemed approved 30 days following receipt of |
21 | the resubmitted filing by the department. |
22 | (3) The department may hire the services of a competent |
23 | actuarial firm as reasonably necessary under any section of |
24 | this chapter to assist the department in the review of an |
25 | insurer's rate filing or resubmitted rate filing under |
26 | section 303(c) or (e)(1), (2) or (5). The reasonable and |
27 | necessary costs for the services shall be paid by the insurer |
28 | within 30 days of the insurer's receipt of a bill for the |
29 | services. |
30 | (4) An insurer intending to use any rate deemed approved |
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1 | under this subsection shall provide written notice to the |
2 | department prior to use. |
3 | (b) Disapproval.--Disapproval of a filing shall be based |
4 | only on specific provisions of applicable law, regulation or |
5 | statement of policy or if insufficient information is submitted |
6 | to support the filing. Rates [filed under section 3(e)] shall |
7 | not be disapproved unless the rates are determined to be |
8 | excessive, inadequate or unfairly discriminatory. |
9 | (c) Resubmission.--A filing disapproved by the department |
10 | may be resubmitted within 120 days after the date of the |
11 | disapproval. [Filings resubmitted within this time shall become |
12 | effective for use 30 days after the receipt of the resubmission |
13 | by the department unless the filing is disapproved by the |
14 | department before the expiration of the 30-day period. This |
15 | subsection shall not apply to filings made prior to the |
16 | effective date of this act.] |
17 | (d) Disapproval of resubmissions.--Disapproval of a filing |
18 | resubmitted under subsection (c) shall be based only on specific |
19 | provisions of applicable law, regulation or statement of policy |
20 | or if insufficient information is submitted to support the |
21 | filing. Rates shall not be disapproved unless the rates are |
22 | determined to be excessive, inadequate or unfairly |
23 | discriminatory. Disapproval may not be based on any grounds not |
24 | specified in the initial disapproval issued by the department |
25 | except to the extent that new information is presented in the |
26 | resubmission. |
27 | (e) Subsequent resubmissions.--Any further resubmission |
28 | following a second disapproval shall be considered a new filing |
29 | [and reviewed in accordance with subsection (a)] under section |
30 | 303. |
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1 | (f) [Commissioner's] Department's discretion.--Nothing in |
2 | this section shall be construed to prevent the [commissioner] |
3 | department from affirmatively approving a filing at the |
4 | [commissioner's] department's discretion. |
5 | Section [5] 305. Notice of approval or disapproval. |
6 | (a) Requirement.--Upon the disapproval of any filing under |
7 | this [act] chapter, the department shall notify the insurer [or |
8 | HMO] of the disapproval in writing, specifying the reason or |
9 | reasons for such disapproval. |
10 | (b) Report.--A report of the approval or disapproval of a |
11 | rate filing subject to review under Federal law shall be |
12 | provided by the department to the United States Department of |
13 | Health and Human Services in a form and manner prescribed by the |
14 | Secretary of the United States Department of Health and Human |
15 | Services. |
16 | Section [6] 306. Use of disapproved forms or rates. |
17 | It shall be unlawful for any insurer [or HMO] to use in this |
18 | Commonwealth a form or rate disapproved under this [act] |
19 | chapter. |
20 | Section [7] 307. Review of form or rate disapproval. |
21 | (a) Request for hearing.--Within 30 days from the date of |
22 | mailing of a notice of disapproval of a filing under this [act] |
23 | chapter, the insurer [or HMO] may make a written application to |
24 | the commissioner for a hearing. |
25 | (b) Hearing.--Upon receipt of a timely written application |
26 | for hearing, the commissioner shall schedule and conduct a |
27 | hearing as provided in 2 Pa.C.S. Ch. 5 Subch. A (relating to |
28 | practice and procedure of Commonwealth agencies) and Ch. 7 |
29 | Subch. A (relating to judicial review of Commonwealth agency |
30 | action). All of the actions which may be performed by the |
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1 | commissioner in this section may be performed by the |
2 | commissioner's designated representative. |
3 | Section [8] 308. Disapproval after use. |
4 | (a) General rule.--Any form or rate filed and used [after |
5 | the expiration of the appropriate review period] under this |
6 | [act] chapter, whether or not subject to review under this |
7 | chapter, may be subsequently disapproved. The [commissioner] |
8 | department shall notify the insurer [or HMO] in writing and |
9 | provide the opportunity for a hearing as provided in 2 Pa.C.S. |
10 | Ch. 5 Subch. A (relating to practice and procedure of |
11 | Commonwealth agencies) and Ch. 7 Subch. A (relating to judicial |
12 | review of Commonwealth agency action). |
13 | (b) Discontinuance of form.--If following a hearing the |
14 | commissioner finds that a form in use should be disapproved, the |
15 | commissioner shall order its use to be discontinued for any |
16 | policy issued after a date specified in the order. |
17 | (c) Discontinuance of rate.--If following a hearing the |
18 | commissioner finds that a rate in use should be disapproved, the |
19 | commissioner shall order its use to be discontinued |
20 | prospectively for any policy issued or renewed after a date |
21 | specified in the order. |
22 | (d) Suspension of forms.--Pending a hearing, the |
23 | commissioner may order the suspension of use of a form filed if |
24 | the commissioner has reasonable cause to believe that: |
25 | (1) The form is contrary to applicable law, regulation |
26 | or statement of policy. |
27 | (2) Unless a suspension order is issued, insureds will |
28 | suffer substantial harm. |
29 | (3) The harm insureds will suffer outweighs any hardship |
30 | the insurer will suffer by the suspension of the use of the |
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1 | form. |
2 | (4) The suspension order will result in no harm to the |
3 | public. |
4 | (e) Suspension of rates.--Pending a hearing, the |
5 | commissioner may order the suspension of use of a rate filed and |
6 | reinstate the last previous rate in effect if the commissioner |
7 | has reasonable cause to believe that: |
8 | (1) The rate is excessive, inadequate or unfairly |
9 | discriminatory under section [4(b)] 304(b). |
10 | (2) Unless a suspension order is issued, insureds will |
11 | suffer substantial harm. |
12 | (3) The harm insureds will suffer outweighs any hardship |
13 | the insurer will suffer by the suspension of the use of the |
14 | [form] rate. |
15 | (4) The suspension order will result in no harm to the |
16 | public. |
17 | Section [9] 309. Filing of provider contracts. |
18 | (a) Filing and review process.--Provider contracts shall be |
19 | filed by insurers and reviewed by the department as follows: |
20 | (1) Provider contracts shall be filed with the |
21 | department no later than 30 days prior to the effective date |
22 | specified in the contract. |
23 | (2) Provider contracts shall become effective unless |
24 | disapproved within 30 days following: |
25 | (i) the expiration of [the] any public comment |
26 | period established by the [commissioner] department under |
27 | section [11] 311; or |
28 | (ii) receipt of the filing by the department if no |
29 | public comment is established. |
30 | (3) The department may disapprove a provider contract |
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1 | whenever it is determined that the contract: |
2 | (i) provides for excessive payments; |
3 | (ii) fails to include reasonable incentives for cost |
4 | control; |
5 | (iii) contributes to the escalation of the cost of |
6 | providing health care services; or |
7 | (iv) does not provide for the realization of |
8 | potential and achieved savings under the contract by |
9 | insureds/subscribers. |
10 | (b) Review of the disapproval.--Upon disapproval of a |
11 | provider contract under this section, the insurer may seek |
12 | review of the disapproval as provided in section [7] 307. |
13 | (c) Payment rates and fee information.--Provider contracts |
14 | filed under this section need not contain payment rates and fees |
15 | unless requested by the department. Payment rates and fees |
16 | requested by the department shall be given confidential |
17 | treatment, are not subject to subpoena and may not be made |
18 | public by the department, except that the payment rates and fee |
19 | information may be disclosed to the insurance department of |
20 | another state or to a law enforcement official of this State or |
21 | any other state or agency of the Federal Government at any time |
22 | so long as the agency or office receiving the information agrees |
23 | in writing to hold it confidential and in a manner consistent |
24 | with this [act] chapter. |
25 | (d) Disapproval of existing contract.--If at any time the |
26 | commissioner determines that a provider contract which has |
27 | become effective under this section violates the standards as |
28 | provided in subsection (a)(3), the commissioner may disapprove |
29 | the provider contract after notice and hearing as provided in 2 |
30 | Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of |
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1 | Commonwealth agencies) and Ch. 7 Subch. A (relating to judicial |
2 | review of Commonwealth agency action). |
3 | (e) Department of Health authority.--Nothing in this section |
4 | shall be construed to expand or limit the authority of the |
5 | Department of Health to review provider contracts under its |
6 | authority under the act of December 29, 1972 (P.L.1701, No.364), |
7 | known as the Health Maintenance Organization Act, and section |
8 | 630 of the act of May 17, 1921 (P.L.682, No.284), known as The |
9 | Insurance Company Law of 1921, and regulations promulgated |
10 | thereunder, including review of size of network and quality of |
11 | care provided. |
12 | Section [10] 310. Record maintenance. |
13 | Upon request, the [commissioner] department shall be provided |
14 | a copy of any form being issued in this Commonwealth. Insurers |
15 | [and HMOs] shall maintain complete and accurate specimen or |
16 | actual copies of all forms which are issued to Pennsylvania |
17 | residents, including copies of all applications, certificates |
18 | and endorsements used with policies. Retention of the forms may |
19 | be kept on diskette, microfiche or any other electronic method. |
20 | Specimen copies shall also indicate the date the form was first |
21 | issued in this Commonwealth. The records shall be maintained |
22 | until at least two years after a claim can no longer be reported |
23 | under the form. |
24 | Section [11] 311. Public comment. |
25 | [Public] (a) Certain rate filings.--A form of notice for |
26 | each rate filing subject to review under Federal law shall be |
27 | required to be provided by the filing insurer for posting on the |
28 | department's website. The form of notice shall satisfy the |
29 | requirements set forth in section 2794 of the Public Health |
30 | Service Act (110 Stat. 1972, 42 U.S.C. § 300gg-94) and any |
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1 | regulations promulgated thereunder. |
2 | (b) Other filings.--Except as provided for under subsection |
3 | (a), public notice of filings made under this [act] chapter |
4 | shall not be required. At the [commissioner's] department's |
5 | discretion, however, notice of a filing may be published in the |
6 | Pennsylvania Bulletin [and a time period established for the |
7 | receipt of public comment by the department] or on the |
8 | department's website or on any other publicly accessible |
9 | electronic medium. |
10 | (c) Period for public comment.--At the department's |
11 | discretion, the department may establish a time period for the |
12 | receipt of public comment on any filing. |
13 | Section [12] 312. Required policy provisions. |
14 | (a) General rule.--An individual or group, blanket or |
15 | franchise form issued by a hospital plan corporation or |
16 | professional health services plan corporation shall also be |
17 | subject to the following provisions of the act of May 17, 1921 |
18 | (P.L.682, No.284), known as The Insurance Company Law of 1921: |
19 | (1) Section 617. |
20 | (2) Section 618. |
21 | (3) Section 619. |
22 | (4) Section 619.1. |
23 | (5) Section 621.2(a)(6). |
24 | (6) Section 621.2(b) through (d). |
25 | (7) Section 621.3. |
26 | (8) Section 621.4. |
27 | (9) Section 621.5. |
28 | (10) Section 622. |
29 | (11) Section 625. |
30 | (12) Section 626. |
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1 | (13) Section 628. |
2 | (b) Network-based programs.--Nothing in this [act] chapter |
3 | shall prohibit a hospital plan corporation or professional |
4 | health services plan corporation from establishing or offering |
5 | provider network-based programs under 40 Pa.C.S. Ch. 61 |
6 | (relating to hospital plan corporations) or 63 (relating to |
7 | professional health services plan corporations). |
8 | Section [13] 313. Penalties. |
9 | (a) General rule.--Upon satisfactory evidence of the |
10 | violation of any section of this [act] chapter by an insurer[, |
11 | HMO] or any other person, one or more of the following penalties |
12 | may be imposed at the commissioner's discretion: |
13 | (1) Suspension or revocation of the license of the |
14 | offending insurer[, HMO] or other person. |
15 | (2) Refusal, for a period not to exceed one year, to |
16 | issue a new license to the offending insurer[, HMO] or other |
17 | person. |
18 | (3) A fine of not more than $5,000 for each violation of |
19 | this [act] chapter. |
20 | (4) A fine of not more than $10,000 for each willful |
21 | violation of this [act] chapter. |
22 | (5) A fine of not more than $10,000 for each violation |
23 | of section [6] 306. |
24 | (6) A fine of not more than $25,000 for each willful |
25 | violation of section [6] 306. |
26 | (b) Limitation.--Fines imposed against an individual insurer |
27 | under this [act] chapter shall not exceed $500,000 in the |
28 | aggregate during a single calendar year. |
29 | Section 6. The act is amended by adding sections to read: |
30 | Section 314. Regulations. |
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1 | The department may promulgate regulations as may be necessary |
2 | or appropriate to carry out this chapter. |
3 | Section 315. Expiration. |
4 | This chapter shall expire upon publication of the notice |
5 | under section 5103. |
6 | Section 7. The act is amended by adding a chapter to read: |
7 | CHAPTER 5 |
8 | COMMONWEALTH EXCLUSIVITY |
9 | Section 501. (Reserved). |
10 | Section 502. Definitions. |
11 | The following words and phrases when used in this chapter |
12 | shall have the meanings given to them in this section unless the |
13 | context clearly indicates otherwise: |
14 | "Commissioner." The Insurance Commissioner of the |
15 | Commonwealth. |
16 | "Company," "association" or "exchange." An entity defined in |
17 | section 101 of the act of May 17, 1921 (P.L.682, No.284), known |
18 | as The Insurance Company Law of 1921. |
19 | "Department." The Insurance Department of the Commonwealth. |
20 | "Filing." A form or rate required by section 503. |
21 | "Form." A policy, contract, certificate, evidence of |
22 | coverage, application, rider or endorsement affording insurance |
23 | coverage or benefit against loss from sickness or loss or damage |
24 | from bodily injury or death of the insured by accident and each |
25 | modification of any of the above. |
26 | "Fraternal benefits society." An entity organized and |
27 | operating under Article XXIV of the act of May 17, 1921 |
28 | (P.L.682, No.284), known as The Insurance Company Law of 1921. |
29 | "Group accident and health insurance." A form affording |
30 | insurance coverage against death, injury, disablement, disease |
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1 | or sickness resulting from an accident and covering more than |
2 | one person. The term shall not include blanket accident |
3 | insurance policies as defined in section 621.3 of the act of May |
4 | 17, 1921 (P.L.682, No.284), known as The Insurance Company Law |
5 | of 1921. |
6 | "Health care provider." A person, corporation, facility, |
7 | institution or other entity licensed, certified or approved by |
8 | the Commonwealth to provide health care or professional medical |
9 | services. The term includes, but is not limited to, physicians, |
10 | professional nurses, certified nurse-midwives, podiatrists, |
11 | hospitals, nursing homes, ambulatory surgical centers or birth |
12 | centers. |
13 | "Health maintenance organization" or "HMO." An entity |
14 | organized and operating under the act of December 29, 1972 |
15 | (P.L.1701, No.364), known as the Health Maintenance Organization |
16 | Act. |
17 | "Hospital plan corporation." An entity organized and |
18 | operating under 40 Pa.C.S. Ch. 61 (relating to hospital plan |
19 | corporations). |
20 | "Insurer." A foreign or domestic company, association or |
21 | exchange, hospital plan corporation, professional health |
22 | services plan corporation, fraternal benefits society and risk- |
23 | assuming preferred provider organization. |
24 | "Preferred provider organization." An entity organized and |
25 | operating under section 630 of the act of May 17, 1921 (P.L.682, |
26 | No.284), known as The Insurance Company Law of 1921. |
27 | "Professional health services plan corporation." An entity |
28 | organized and operating under 40 Pa.C.S. Ch. 63 (relating to |
29 | professional health services plan corporations). |
30 | "Provider contracts." An agreement made between an insurer |
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1 | and a health care provider regarding the provision of any |
2 | payment for health care services. The term shall not include |
3 | contracts or related documents which are subject to the |
4 | exclusive approval of the Department of Health under 40 Pa.C.S. |
5 | § 6324 (relating to rights of health service doctors) and |
6 | section 630 of the act of May 17, 1921 (P.L.682, No.284), known |
7 | as The Insurance Company Law of 1921. |
8 | "Rate." A manual of classification, rules and rates, each |
9 | rating plan and each modification of any of the above. |
10 | "Statement of policy." A document as defined in 45 Pa.C.S. § |
11 | 501 (relating to definitions), provided that the document has |
12 | been published in the Pennsylvania Bulletin. |
13 | Section 503. Required filings. |
14 | (a) Form filings.--Each insurer and HMO shall file with the |
15 | department any form which it proposes to issue in this |
16 | Commonwealth except a type or kind of form which, in the opinion |
17 | of the commissioner, does not require filing. |
18 | (b) Notice of exemption from filing.--The commissioner shall |
19 | issue notice in the Pennsylvania Bulletin identifying any type |
20 | or kind of form which has been exempted from filing. The |
21 | commissioner may subsequently require the forms to be filed |
22 | under this section upon notice published in the Pennsylvania |
23 | Bulletin. Any such subsequent notice shall not be effective |
24 | until 90 days after publication. |
25 | (c) Individual rates.--Each insurer and HMO shall file with |
26 | the department rates for individual accident and health |
27 | insurance policies which it proposes to use in this Commonwealth |
28 | except those rates which, in the opinion of the commissioner, |
29 | cannot practicably be filed before they are used. The |
30 | commissioner shall publish notice in the Pennsylvania Bulletin |
|
1 | identifying rates which the commissioner determines cannot |
2 | practicably be filed. |
3 | (d) Certain group rates exempt.--Except as provided in |
4 | subsection (e), an insurer shall not be required to file with |
5 | the department rates for accident and health insurance policies |
6 | which it proposes to issue on a group, blanket or franchise |
7 | basis in this Commonwealth. |
8 | (e) Required group rate filings.--Each hospital plan |
9 | corporation, professional health services plan corporation and |
10 | HMO shall file with the department rates for accident and health |
11 | insurance policies which it proposes to issue on a group, |
12 | blanket or franchise basis in this Commonwealth in accordance |
13 | with the following: |
14 | (1) Each hospital plan corporation, professional health |
15 | services plan corporation and HMO shall establish a base rate |
16 | which is not excessive, inadequate or unfairly |
17 | discriminatory. The initial base rate for existing hospital |
18 | plan corporations, professional health services plan |
19 | corporations and HMOs shall be the rate or the rating formula |
20 | currently on file and approved by the department as of |
21 | February 17, 1997. The initial base rate or base rating |
22 | formula for any hospital plan corporation, professional |
23 | health services plan corporation or HMO with no base rate or |
24 | base rating formula on file and approved as of February 17, |
25 | 1997, shall be subject to filing, review and prior approval |
26 | by the department. |
27 | (2) Proposed changes to an approved base rate or any |
28 | approved component of an approved rating formula which effect |
29 | an increase or decrease in the approved base rate or in an |
30 | approved component of an approved rating formula of more than |
|
1 | 10% annually in the aggregate shall be subject to filing, |
2 | review and prior approval by the department. |
3 | (3) Proposed changes to an approved base rate or any |
4 | approved component of an approved rating formula that effect |
5 | an increase or decrease in the approved base rate or in an |
6 | approved component of an approved rating formula of not more |
7 | than 10% annually in the aggregate shall be subject to filing |
8 | and review in accordance with the provisions of section 504. |
9 | (4) Rates developed for a specific group which do not |
10 | deviate from the base rate or base rate formula by more than |
11 | 15% may be used without filing with the department. |
12 | (5) Rates developed for a specific group which deviate |
13 | from the base rate or base rate formula by more than 15% |
14 | shall be subject to filing and review in accordance with the |
15 | provisions of section 504. |
16 | (6) The commissioner shall have discretion to exempt any |
17 | type or kind of rate filing under this subsection by |
18 | regulation. |
19 | (f) Applicability of filings.--All filings required by this |
20 | section shall be made no less than 45 days prior to their |
21 | effective dates. Filings under subsection (e)(1) and (2) shall |
22 | be deemed approved at the expiration of 45 days after filing |
23 | unless earlier approved or disapproved by the commissioner. The |
24 | commissioner, by written notice to the insurer, may within such |
25 | 45-day period extend the period for approval or disapproval for |
26 | an additional 45 days. All other filings under this section |
27 | shall become effective as provided in section 504. |
28 | Section 504. Review procedure. |
29 | (a) General rule.--Filings shall be reviewed as appropriate |
30 | and necessary to carry out the provisions of this chapter. |
|
1 | Unless a filing is disapproved by the department within the 45- |
2 | day period provided in section 503(f), filings made under |
3 | section 503 shall become effective for use 45 days following: |
4 | (1) the expiration of any public comment period |
5 | established by the commissioner under section 511; or |
6 | (2) receipt of the filing by the department if no public |
7 | comment period is established. |
8 | (b) Disapproval.--Disapproval of a filing shall be based |
9 | only on specific provisions of applicable law, regulation or |
10 | statement of policy or if insufficient information is submitted |
11 | to support the filing. Rates filed under section 503(e) shall |
12 | not be disapproved unless the rates are determined to be |
13 | excessive, inadequate or unfairly discriminatory. |
14 | (c) Resubmission.--A filing disapproved by the department |
15 | may be resubmitted within 120 days after the date of the |
16 | disapproval. Filings resubmitted within this time shall become |
17 | effective for use 30 days after the receipt of the resubmission |
18 | by the department unless the filing is disapproved by the |
19 | department before the expiration of the 30-day period. This |
20 | subsection shall not apply to filings made prior to February 17, |
21 | 1997. |
22 | (d) Disapproval of resubmissions.--Disapproval of a filing |
23 | resubmitted under subsection (c) shall be based only on specific |
24 | provisions of applicable law, regulation or statement of policy |
25 | or if insufficient information is submitted to support the |
26 | filing. Disapproval may not be based on any grounds not |
27 | specified in the initial disapproval issued by the department |
28 | except to the extent that new information is presented in the |
29 | resubmission. |
30 | (e) Subsequent resubmissions.--Any further resubmission |
|
1 | following a second disapproval shall be considered a new filing |
2 | and reviewed in accordance with subsection (a). |
3 | (f) Commissioner's discretion.--Nothing in this section |
4 | shall be construed to prevent the commissioner from |
5 | affirmatively approving a filing at the commissioner's |
6 | discretion. |
7 | Section 505. Notice of disapproval. |
8 | Upon the disapproval of any filing under this chapter, the |
9 | department shall notify the insurer or HMO of the disapproval in |
10 | writing, specifying the reason or reasons for such disapproval. |
11 | Section 506. Use of disapproved forms or rates. |
12 | It shall be unlawful for any insurer or HMO to use in this |
13 | Commonwealth a form or rate disapproved under this chapter. |
14 | Section 507. Review of form or rate disapproval. |
15 | (a) Request for hearing.--Within 30 days from the date of |
16 | mailing of a notice of disapproval of a filing under this |
17 | chapter, the insurer or HMO may make a written application to |
18 | the commissioner for a hearing. |
19 | (b) Hearing.--Upon receipt of a timely written application |
20 | for hearing, the commissioner shall schedule and conduct a |
21 | hearing as provided in 2 Pa.C.S. Ch. 5 Subch. A (relating to |
22 | practice and procedure of Commonwealth agencies) and Ch. 7 |
23 | Subch. A (relating to judicial review of Commonwealth agency |
24 | action). All of the actions which may be performed by the |
25 | commissioner in this section may be performed by the |
26 | commissioner's designated representative. |
27 | Section 508. Disapproval after use. |
28 | (a) General rule.--Any form or rate filed and used after the |
29 | expiration of the appropriate review period under this chapter |
30 | may be subsequently disapproved. The department shall notify the |
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1 | insurer or HMO in writing and provide the opportunity for a |
2 | hearing as provided in 2 Pa.C.S. Ch. 5 Subch. A (relating to |
3 | practice and procedure of Commonwealth agencies) and Ch. 7 |
4 | Subch. A (relating to judicial review of Commonwealth agency |
5 | action). |
6 | (b) Discontinuance of form.--If following a hearing the |
7 | commissioner finds that a form in use should be disapproved, the |
8 | commissioner shall order its use to be discontinued for any |
9 | policy issued after a date specified in the order. |
10 | (c) Discontinuance of rate.--If following a hearing the |
11 | commissioner finds that a rate in use should be disapproved, the |
12 | commissioner shall order its use to be discontinued |
13 | prospectively for any policy issued or renewed after a date |
14 | specified in the order. |
15 | (d) Suspension of forms.--Pending a hearing, the |
16 | commissioner may order the suspension of use of a form filed if |
17 | the commissioner has reasonable cause to believe that: |
18 | (1) The form is contrary to applicable law, regulation |
19 | or statement of policy. |
20 | (2) Unless a suspension order is issued, insureds will |
21 | suffer substantial harm. |
22 | (3) The harm insureds will suffer outweighs any hardship |
23 | the insurer will suffer by the suspension of the use of the |
24 | form. |
25 | (4) The suspension order will result in no harm to the |
26 | public. |
27 | (e) Suspension of rates.--Pending a hearing, the |
28 | commissioner may order the suspension of use of a rate filed and |
29 | reinstate the last previous rate in effect if the commissioner |
30 | has reasonable cause to believe that: |
|
1 | (1) The rate is excessive, inadequate or unfairly |
2 | discriminatory under section 504(b). |
3 | (2) Unless a suspension order is issued, insureds will |
4 | suffer substantial harm. |
5 | (3) The harm insureds will suffer outweighs any hardship |
6 | the insurer will suffer by the suspension of the use of the |
7 | form. |
8 | (4) The suspension order will result in no harm to the |
9 | public. |
10 | Section 509. Filing of provider contracts. |
11 | (a) Filing and review process.--Provider contracts shall be |
12 | filed by insurers and reviewed by the department as follows: |
13 | (1) Provider contracts shall be filed with the |
14 | department no later than 30 days prior to the effective date |
15 | specified in the contract. |
16 | (2) Provider contracts shall become effective unless |
17 | disapproved within 30 days following: |
18 | (i) the expiration of the public comment period |
19 | established by the commissioner under section 511; or |
20 | (ii) receipt of the filing by the department if no |
21 | public comment is established. |
22 | (3) The department may disapprove a provider contract |
23 | whenever it is determined that the contract: |
24 | (i) provides for excessive payments; |
25 | (ii) fails to include reasonable incentives for cost |
26 | control; |
27 | (iii) contributes to the escalation of the cost of |
28 | providing health care services; or |
29 | (iv) does not provide for the realization of |
30 | potential and achieved savings under the contract by |
|
1 | insureds/subscribers. |
2 | (b) Review of the disapproval.--Upon disapproval of a |
3 | provider contract under this section, the insurer may seek |
4 | review of the disapproval as provided in section 507. |
5 | (c) Payment rates and fee information.--Provider contracts |
6 | filed under this section need not contain payment rates and fees |
7 | unless requested by the department. Payment rates and fees |
8 | requested by the department shall be given confidential |
9 | treatment, are not subject to subpoena and may not be made |
10 | public by the department, except that the payment rates and fee |
11 | information may be disclosed to the insurance department of |
12 | another state or to a law enforcement official of this State or |
13 | any other state or agency of the Federal Government at any time |
14 | so long as the agency or office receiving the information agrees |
15 | in writing to hold it confidential and in a manner consistent |
16 | with this chapter. |
17 | (d) Disapproval of existing contract.--If at any time the |
18 | commissioner determines that a provider contract which has |
19 | become effective under this section violates the standards as |
20 | provided in subsection (a)(3), the commissioner may disapprove |
21 | the provider contract after notice and hearing as provided in 2 |
22 | Pa.C.S. Chs. 5 Subch. A (relating to practice and procedure of |
23 | Commonwealth agencies) and 7 Subch. A (relating to judicial |
24 | review of Commonwealth agency action). |
25 | (e) Department of Health authority.--Nothing in this section |
26 | shall be construed to expand or limit the authority of the |
27 | Department of Health to review provider contracts under its |
28 | authority under the act of December 29, 1972 (P.L.1701, No.364), |
29 | known as the Health Maintenance Organization Act, and section |
30 | 630 of the act of May 17, 1921 (P.L.682, No.284), known as The |
|
1 | Insurance Company Law of 1921, and regulations promulgated |
2 | thereunder, including review of size of network and quality of |
3 | care provided. |
4 | Section 510. Record maintenance. |
5 | Upon request, the department shall be provided a copy of any |
6 | form being issued in this Commonwealth. Insurers and HMOs shall |
7 | maintain complete and accurate specimen or actual copies of all |
8 | forms which are issued to residents of this Commonwealth, |
9 | including copies of all applications, certificates and |
10 | endorsements used with policies. Retention of the forms may be |
11 | kept on diskette, microfiche or any other electronic method. |
12 | Specimen copies shall also indicate the date the form was first |
13 | issued in this Commonwealth. The records shall be maintained |
14 | until at least two years after a claim can no longer be reported |
15 | under the form. |
16 | Section 511. Public comment. |
17 | Public notice of filings made under this chapter shall not be |
18 | required. At the commissioner's discretion, however, notice of a |
19 | filing may be published in the Pennsylvania Bulletin and a time |
20 | period established for the receipt of public comment by the |
21 | department. |
22 | Section 512. Required policy provisions. |
23 | (a) General rule.--An individual or group, blanket or |
24 | franchise form issued by a hospital plan corporation or |
25 | professional health services plan corporation shall also be |
26 | subject to the following provisions of the act of May 17, 1921 |
27 | (P.L.682, No.284), known as The Insurance Company Law of 1921: |
28 | (1) Section 617. |
29 | (2) Section 618. |
30 | (3) Section 619. |
|
1 | (4) Section 619.1. |
2 | (5) Section 621.2(a)(6). |
3 | (6) Section 621.2(b), (c) and (d). |
4 | (7) Section 621.3. |
5 | (8) Section 621.4. |
6 | (9) Section 621.5. |
7 | (10) Section 622. |
8 | (11) Section 625. |
9 | (12) Section 626. |
10 | (13) Section 628. |
11 | (b) Network-based programs.--Nothing in this chapter shall |
12 | prohibit a hospital plan corporation or professional health |
13 | services plan corporation from establishing or offering provider |
14 | network-based programs under 40 Pa.C.S. Ch. 61 (relating to |
15 | hospital plan corporations) or 63 (relating to professional |
16 | health services plan corporations). |
17 | Section 513. Penalties. |
18 | (a) General rule.--Upon satisfactory evidence of the |
19 | violation of any section of this chapter by an insurer, HMO or |
20 | any other person, one or more of the following penalties may be |
21 | imposed at the commissioner's discretion: |
22 | (1) Suspension or revocation of the license of the |
23 | offending insurer, HMO or other person. |
24 | (2) Refusal, for a period not to exceed one year, to |
25 | issue a new license to the offending insurer, HMO or other |
26 | person. |
27 | (3) A fine of not more than $5,000 for each violation of |
28 | this chapter. |
29 | (4) A fine of not more than $10,000 for each willful |
30 | violation of this chapter. |
|
1 | (5) A fine of not more than $10,000 for each violation |
2 | of section 506. |
3 | (6) A fine of not more than $25,000 for each willful |
4 | violation of section 506. |
5 | (b) Limitation.--Fines imposed against an individual insurer |
6 | under this chapter shall not exceed $500,000 in the aggregate |
7 | during a single calendar year. |
8 | Section 514. Regulations. |
9 | The department may promulgate regulations as may be necessary |
10 | or appropriate to carry out this chapter. |
11 | Section 8. Sections 14 and 15 of the act are amended to |
12 | read: |
13 | Section [14] 5101. Repeals. |
14 | (a) Absolute.--The following acts and parts of acts are |
15 | repealed: |
16 | Sections 616 and the last sentence of section 621.5 of the |
17 | act of May 17, 1921 (P.L.682, No.284), known as The Insurance |
18 | Company Law of 1921. |
19 | Section 3104 of the act of December 2, 1992 (P.L.741, |
20 | No.113), known as the Children's Health Care Act. |
21 | (b) Partial.--The following acts and parts of acts are |
22 | repealed to the extent specified: |
23 | Section 354 of the act of May 17, 1921 (P.L.682, No.284), |
24 | known as The Insurance Company Law of 1921, insofar as it |
25 | provides for the approval of accident and health forms. |
26 | Section 621.2(a)(1) of the act of May 17, 1921 (P.L.682, |
27 | No.284), known as The Insurance Company Law of 1921, insofar as |
28 | it defines the number of employees in a group insurance policy. |
29 | Section 630(f) of the act of May 17, 1921 (P.L.682, No. 284), |
30 | known as The Insurance Company Law of 1921, insofar as it |
|
1 | provides for the approval of rates and forms. |
2 | Section 10(c) of the act of December 29, 1972 (P.L.1701, |
3 | No.364), known as the Health Maintenance Organization Act, |
4 | insofar as it provides for the approval of rates and forms. |
5 | 40 Pa.C.S. §§ 6124(a) and 6329(a), insofar as they provide |
6 | for the approval of rates and contracts. |
7 | Section [15] 5102. Applicability. |
8 | This act shall apply as follows: |
9 | (1) [Section 4] Section 504 shall apply to benefits |
10 | forms filings for hospital plan corporations and professional |
11 | health services plan corporations made on or after July 1, |
12 | 1997. |
13 | (2) [Section 12] Section 512 shall apply to new forms |
14 | issued after July 1, 1997. |
15 | (3) This act shall apply to all forms or rate filings |
16 | made and all provider contracts filed after [the effective |
17 | date of this act] February 17, 1997. |
18 | (4) The provisions of this act shall not apply to | <-- |
19 | coverage for excepted benefits as defined in 45 CFR |
20 | 146.145(c) (relating to special rules related to health |
21 | plans). |
22 | Section 9. The act is amended by adding a section to read: |
23 | Section 5103. Action by commissioner. |
24 | If Congress of the United States repeals section 1003 of the |
25 | Patient Protection and Affordable Care Act (Public Law 111-148, |
26 | 42 U.S.C. § 300gg-94) or if the Supreme Court of the United |
27 | States invalidates section 1003 of the Patient Protection and |
28 | Affordable Care Act, the commissioner shall transmit notice of |
29 | that action to the Legislative Reference Bureau for publication |
30 | in the Pennsylvania Bulletin. |
|
1 | Section 10. Section 16 of the act is amended to read: |
2 | Section [16] 5104. Effective date. |
3 | This act shall take effect in 60 days. |
4 | Section 11. This act shall take effect as follows: |
5 | (1) The following provisions shall take effect |
6 | immediately: |
7 | (i) The addition of section 5103 of the act. |
8 | (ii) This section. |
9 | (2) The addition of Chapter 5 of the act shall take |
10 | effect upon publication of the notice under section 5103 of |
11 | the act. |
12 | (3) The remainder of this act shall take effect in 90 |
13 | days. |
|
