Bill Text: PA SB1224 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for credentialing of physicians by health insurers, for physician payment during credentialing process and for the powers and duties of the Department of Health; establishing a private right of action; and prescribing administrative fines.

Spectrum: Moderate Partisan Bill (Republican 6-1)

Status: (Introduced - Dead) 2011-10-18 - Referred to BANKING AND INSURANCE [SB1224 Detail]

Download: Pennsylvania-2011-SB1224-Introduced.html

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PRINTER'S NO. 1683
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1224 Session of2011
INTRODUCED BY YAW, RAFFERTY, ERICKSON, SCHWANK, GREENLEAF, MENSCH AND EARLL, OCTOBER 18, 2011
REFERRED TO BANKING AND INSURANCE, OCTOBER 18, 2011
AN ACT
Providing for credentialing of physicians by health insurers,
for physician payment during credentialing process and for
the powers and duties of the Department of Health;
establishing a private right of action; and prescribing
administrative fines.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Health
Insurer Physician Credentialing Act.
Section 2. Declaration of policy.
The General Assembly finds and declares as follows:
(1) An equitable and expeditious initial physician
credentialing process is essential to the financial stability
of this Commonwealth's health insurers and health care
providers and ultimately to the well-being of patients and
consumers by ensuring access to health care services.
(2) This act is intended to promote fairness to this
Commonwealth's health care providers by ensuring that health
insurers conduct physician credentialing in a reasonable time
frame and reimburse physicians during the credentialing
process.
(3) This act is a necessary and proper exercise of the
authority of the Commonwealth to protect the public health
and to regulate the business of insurance and the practice of
medicine.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Council." The Council for Affordable Quality Health Care or
a successor entity that is a nonprofit alliance of health plans
and trade associations facilitating administrative health care
information exchange.
"Department." The Department of Health of the Commonwealth.
"Enrollee." A policyholder, subscriber, covered person,
covered dependent, spouse or other person who is entitled to
receive health care benefits from a health insurer.
"Health insurer." An entity that contracts or offers to
contract to provide, deliver, arrange for, pay for or reimburse
any of the costs of health care services in exchange for a
premium, including an entity licensed under any of the
following:
(1) The act of May 17, 1921 (P.L.682, No.284), known as
The Insurance Company Law of 1921, including section 630 and
Article XXIV.
(2) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
(3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
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corporations).
(4) 40 Pa.C.S. Ch. 63 (relating to professional health
services plan corporations).
"Hospital-based physician." A physician who provides
clinical support within a hospital. The term includes, but is
not limited to, an anesthesiologist, pathologist, radiologist,
neonatologist, hospitalist and emergency room physician.
"Participating provider." A physician who enters into a
provider contract with a health insurer and is on the health
insurer's physician provider panel.
"Physician provider panel." A group of physicians who
contract either directly or through a subcontracting entity with
a health insurer to provide health care services to the health
plan's enrollees under the health plan's health benefit plan.
Section 4. Initial physician credentialing.
(a) General rule.--A health insurer and physician shall
adhere to the following minimum standards to facilitate the
initial physician credentialing process:
(1) A physician who seeks to participate on a physician
provider panel of a health insurer must submit an application
to the health insurer.
(2) A health insurer shall complete the credentialing
process for all initial physician credentialing applications
submitted by or on behalf of a physician applicant within 60
days of receipt of a complete application. An application
shall be considered complete for the purpose of this act if:
(i) the application is submitted through the
council's electronic process described under section 6;
or
(ii) the physician materially completes responses to
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each question on the application and each of the
following requirements are satisfied or submitted:
(A) the application form is signed and
appropriately dated by the physician applicant;
(B) a current curriculum vitae or work/education
history;
(C) copies of the physician applicant's current
licenses in all states in which the physician holds a
license, regardless of the address on the licenses;
(D) a copy of the physician applicant's current
Drug Enforcement Administration controlled substance
certificate, regardless of the address on the
certificate; and
(E) a copy of the physician applicant's current
malpractice face sheet coverage statement, including
amounts and dates of coverage, regardless of the
current or future dates of coverage.
(3) If a physician applicant is board eligible, the
health insurer may request documentation of board
certification or eligibility. Absence of this documentation
shall not restrict the application from being considered
complete for the purpose of this act.
(4) The health insurer shall report to a physician
applicant, at the address provided in the initial
credentialing application, the status of a submitted initial
physician credentialing application within five business days
from the date of receipt by the health insurer. The report
shall include, but not be limited to, the health insurer's
intent to continue to process the physician's application,
application receipt date, next meeting date of the health
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plan's credentialing review committee at which the
application will be considered and, if the application is
incomplete because it does not satisfy the minimum
requirements established in paragraph (2), an itemization of
all missing or incomplete items. After the health insurer
receives the completed application in accordance with
paragraph (2), the health insurer shall be subject to the
time periods established in paragraph (2).
(5) The failure of a health insurer to provide the
report required under paragraph (4) is a violation of this
act, and the health insurer shall be subject to the
provisions of and penalties provided under section 7.
(6) A health insurer shall notify a physician applicant
of the health insurer's decision on an initial credentialing
application within five business days of the decision. The
notice shall include the committee's decision, the decision
date and, if not favorable to the applicant, the rationale
for the decision.
(b) Inapplicability.--
(1) The credentialing and recredentialing by health
insurers of hospital-based physicians, unless the hospital-
based physician maintains a medical practice independent of
the hospital with which the physician contracts.
(2) The credentialing and recredentialing functions that
have been delegated to other entities by the health plan.
Section 5. Physician payment during credentialing process.
(1) A physician applicant notified by a health insurer
of the health insurer's intent to pursue the credentialing
process in accordance with section 4(a)(4) shall be eligible
for reimbursement within 15 calendar days from the postmarked
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date on the physician's application.
(2) The health insurer shall reimburse the physician
based upon the health insurer's fee schedule rates applicable
to nonparticipating physicians. Reimbursement shall be paid
by the health insurer to the physician at the health
insurer's nonparticipating physician rate for services
rendered from the date that appears on the health insurer
notice to the physician as required under section 4(a)(4)
through and including the date the health insurer sends the
required notice under section 4(a)(6).
(3) A physician applicant who contracts with a medical
group practice and who receives the notification from a
health insurer pursuant to section 4(a)(4) shall be eligible
to receive reimbursement at the medical group's actual
contracted rate for claims paid to the physician's contracted
medical group practice within 15 calendar days from the
postmarked date on the physician's application if:
(i) The physician is employed by or is a member of
the participating group practice.
(ii) The physician has applied for acceptance on the
health insurer's participating provider panel.
(iii) The physician has a valid license issued by
the State Board of Medicine or the State Board of
Osteopathic Medicine.
(iv) The physician has proof of valid professional
liability insurance coverage.
(4) A health insurer that sends written notice rejecting
the physician's credentialing application pursuant to section
4(a)(6) shall not be under any obligation to provide any
reimbursement to the physician applicant unless the physician
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subsequently becomes credentialed.
(5) A health insurer may not deny payment to a physician
under this section solely because the physician was not a
participating provider at the time the services were provided
to an enrollee.
(6) A physician who is not a participating provider of a
health insurer and whose group practice is eligible for
reimbursement under paragraph (2) may not hold an enrollee of
the health insurer liable for the cost of any covered
services provided to the enrollee during the time period
described in section 4(a)(2), except for any noncovered
service, deductible, copayment or coinsurance amount owed by
the enrollee to the group practice or physician under the
terms of the enrollee's contract or certificate.
(7) A group practice may disclose in writing to an
enrollee at the time services are provided that:
(i) The treating physician is not a participating
provider.
(ii) The treating physician has applied to become a
participating provider.
(iii) The health insurer has not completed its
assessment of the credentials of the treating physician
to provide services as a participating provider.
(8) The disclosure process may continue until the
credentialing process is complete as described in section
4(a)(6).
(9) A health plan may assign individual provider numbers
to physicians for their internal use, but the assignment of
such numbers shall not be a prerequisite for processing and
paying claims. The physician's National Provider Identifier
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(NPI) number shall suffice as the individual provider
identifier required to process and pay claims.
Section 6. Alternative submission.
A health insurer shall be required to accept an application
developed by the council when submitted by a physician for
participation in the health insurer's provider panel.
Section 7. Private right of action.
(a) General rule.--A physician aggrieved by a health
insurer's violation of this act shall have a private right of
action in a court of competent jurisdiction to secure all
available remedies at law and in equity to remedy the health
insurer's violation.
(b) Administrative penalty.--In addition to any other remedy
available at law or in equity, the Insurance Department shall
assess an administrative penalty for a violation of this act
following notice and an opportunity to be heard. The penalty
shall not exceed $5,000 per violation.
Section 8. Severability.
The provisions of this act are severable. If any provision of
this act or its application to any person or circumstance is
held invalid, the invalidity shall not affect other provisions
or applications of this act which can be given effect without
the invalid provision or application.
Section 9. Appeals.
A physician applicant has the right to appeal any rejection
by the health insurer subsequent to receipt of the rejection
letter sent by the insurer pursuant to section 4(a)(6) as
follows:
(1) The physician's right to repeal a rejection by the
health insurer shall be limited to the following
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circumstances:
(i) The health insurer rejected the physician's
application because the physician discussed with a
patient or any person:
(A) the process that the health insurer uses or
proposes to use to deny payment for a health care
service;
(B) medically necessary and appropriate care
with or on behalf of a patient, including information
regarding the nature of treatment, risks of
treatment, alternative treatments or the availability
of alternative therapies, consultation or tests; or
(C) the decision of any health insurer to deny
payment for a health care service;
(ii) the physician applicant has a practice or
intends to join a medical group practice that includes a
substantial number of patients with expensive medical
conditions; or
(iii) the physician objects to the provision of or
refuses to provide a health care service on moral or
religious grounds.
(2) Within 45 days of receipt of a denial letter by the
health insurer rejecting a physician's enrollment
application, a physician applicant or designee may file an
appeal to the Secretary of Health. The Secretary of Health
shall have 45 days to make a final determination regarding
the physician applicant's credentialing status and
participation as a network provider based upon the standards
specified in paragraph (1). The Secretary of Health shall
send notification of the decision by certified mail to the
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physician applicant or designee and the health insurer within
45 days of receipt of the appeal letter.
Section 10. Rules and regulations.
The department shall promulgate rules and regulations to
administer and enforce this act.
Section 11. Repeals.
All acts and parts of acts are repealed insofar as they are
inconsistent with this act.
Section 12. Effective date.
This act shall take effect in 60 days.
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