Bill Text: PA HB32 | 2011-2012 | Regular Session | Introduced

---

Bill Title: Further providing for rates and contracts.

Spectrum: Moderate Partisan Bill (Democrat 54-7)

Status: (Introduced - Dead) 2011-10-13 - Referred to INSURANCE [HB32 Detail]

Download: Pennsylvania-2011-HB32-Introduced.html

---

PRINTER'S NO. 2540
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 32 Session of2011
INTRODUCED BY DeLUCA, FRANKEL, MICOZZIE, VULAKOVICH, DERMODY, MARKOSEK, BARBIN, B. BOYLE, BRENNAN, BRIGGS, CALTAGIRONE, COHEN, CONKLIN, D. COSTA, P. COSTA, CURRY, DALEY, DAVIS, DEASY, DePASQUALE, DeWEESE, J. EVANS, FABRIZIO, FREEMAN, GALLOWAY, GEORGE, GIBBONS, HALUSKA, HANNA, HARHAI, HARKINS, HORNAMAN, JOSEPHS, KIRKLAND, KORTZ, KOTIK, KULA, LONGIETTI, MAHONEY, MARSHALL, MATZIE, MIRABITO, MUNDY, MUSTIO, M. O'BRIEN, PASHINSKI, PRESTON, PYLE, READSHAW, SAINATO, SANTARSIERO, SANTONI, M. SMITH, SONNEY, STABACK, STURLA, THOMAS, WATERS, WHITE, WILLIAMS AND YOUNGBLOOD, OCTOBER 13, 2011
REFERRED TO COMMITTEE ON INSURANCE, OCTOBER 13, 2011
AN ACT
Amending Title 40 (Insurance) of the Pennsylvania Consolidated
Statutes, further providing for rates and contracts.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 6124(c) of Title 40 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 6124. Rates and contracts.
* * *
(c) Maintenance of contractual relationships.--
(1) Declaration of necessity.--
(i) It is hereby found that many subscribers to
nonprofit hospital plans make payments over long periods
of time prior to becoming entitled to benefits under such
a plan and that it is important in the public interest
that the reasonable expectations of such subscribers as
to coverage should be fulfilled if possible. It is hereby
declared to be essential for the maintenance of the
health of the residents of this Commonwealth that
subscribers to nonprofit hospital plans be assured
receipt of the hospitalization and related health
benefits prepaid by them through payment of the rates
approved under this chapter and charged by a hospital
plan corporation and that to accomplish this essential
purpose termination of contracts between hospital plan
corporations and hospitals entered into pursuant to
section 6121 (relating to eligible hospitals) and this
section be subject to prior approval by the department as
provided in this subsection.
(ii) It is further found that providing meaningful
health care choices to the residents of this Commonwealth
is essential to the provision of and accessibility to
quality health care at an affordable price. It is hereby
declared to be equally essential for the maintenance of
the health of the residents of this Commonwealth that
subscribers to nonprofit hospital plans be assured
continued receipt of adequate hospitalization and related
health benefits upon the expiration of contracts between
hospital plan corporations and hospitals entered into
pursuant to section 6121 (relating to eligible hospitals)
and this section be subject to prior approval by the
department as provided in this subsection.
(2) Notification period.--
(i) No contract between a hospital plan corporation
20110HB0032PN2540 - 2 -
and any hospital providing for the rendering of
hospitalization to subscribers to the hospital plan shall
be terminated unless the party seeking such termination
gives 90 days advance written notice to the other party
to the contract and to the department of the proposed
termination.
(ii) A hospital plan corporation that has entered
into a contract with a hospital providing for the
rendering of hospitalization to subscribers to the
hospital plan corporation shall give the department at
least 90 days' advance written notice of the expiration
date provided for in the contract.
(3) Hearing period.--Whenever a termination or
expiration subject to paragraph (2) involves contracts with
hospitals having more than 5% of the beds in the area served
by a hospital plan corporation, the department shall hold
public hearings on at least 15 days notice for the purpose of
investigating the reasons for the termination or whether the
pending expiration is in the public interest. Pending
completion of said investigation by the department,
termination or expiration of the hospital contracts shall be
suspended for a period not to exceed six months from the
expiration of the period provided for in paragraph (2). All
terms and conditions of the [contract] contracts between the
hospital plan corporation and the hospital or hospitals shall
continue in full force and effect during said investigation
by the department. Based on the record made during the
hearings, the department shall make specific findings [as to
the] of facts [of the dispute] and shall either approve
termination or expiration of the contracts or recommend such
20110HB0032PN2540 - 3 -
terms for continuation of the [contract] contracts as are in
the public interest, based upon the facts, the right of a
hospital to be paid its costs for hospitalization services to
subscribers [and], the need of subscribers for efficient,
reliable hospitalization at a reasonable cost and the
adequacy of the alternative health system networks that would
be accessible to subscribers in the event the contracts are
permitted to terminate or expire. The Department of Health
shall determine whether the alternative health system
networks are adequate under the requirements of the act of
December 29, 1972 (P.L.1701, No.364), known as the Health
Maintenance Organization Act, and the regulations promulgated
under that act.
(4) Negotiation period.--If the department recommends
terms for continuation of the [contract] contracts, the
hospital plan corporation and the hospitals involved shall
renew their negotiations in order to determine whether a new
agreement can be reached substantially on the basis of the
terms for continuation recommended by the department and
pending such negotiations, the termination or expiration of
the hospital contracts shall be suspended for a further
period not to exceed 90 days from the date of the decision of
the department. If the hospital plan corporation and the
hospitals are unable to consummate [a new contract] new
contracts within said further period of 90 days, they shall
so advise the department[. The department shall in that
event], and the contracts in effect prior to the giving of
notice provided under paragraph (2) shall remain in full
force and effect for a term equal to the initial or any
subsequent renewal term, whichever is longer, provided for in
20110HB0032PN2540 - 4 -
the contracts. If the department recommends that the
contracts be permitted to be terminated or to expire, the
department shall approve termination or expiration of the
contracts effective at the end of a further period of 30 days
and shall prescribe the form and extent of notice which the
hospital plan corporation shall use in advising its
subscribers that hospitalization in the hospitals involved is
not covered by a contract between the hospital plan
corporation and such hospitals.
(5) Retroactivity.--Upon the settlement of any dispute
between a hospital plan corporation and any hospital pursuant
to paragraphs (2) and (4), the terms and conditions of any
new contract shall be retroactive to the date of termination
or expiration of the contract previously in effect between
the parties.
Section 2. This act shall take effect in 60 days.
20110HB0032PN2540 - 5 -