Bill Text: PA SB335 | 2011-2012 | Regular Session | Introduced

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Bill Title: Requiring health insurers to disclose fee schedules and all rules and algorithms relating thereto; requiring health insurers to provide full payment to physicians when more than one surgical procedure is performed on the patient by the same physician during one continuous operating procedure; and providing for causes of action and for penalties.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-01-28 - Referred to BANKING AND INSURANCE [SB335 Detail]

Download: Pennsylvania-2011-SB335-Introduced.html

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PRINTER'S NO. 312
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 335 Session of2011
INTRODUCED BY TOMLINSON, ERICKSON, MENSCH, RAFFERTY, BOSCOLA AND SOLOBAY, JANUARY 28, 2011
REFERRED TO BANKING AND INSURANCE, JANUARY 28, 2011
AN ACT
Requiring health insurers to disclose fee schedules and all
rules and algorithms relating thereto; requiring health
insurers to provide full payment to physicians when more than
one surgical procedure is performed on the patient by the
same physician during one continuous operating procedure; and
providing for causes of action and for penalties.
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 Fee Schedule
Disclosure and Multiple Surgical Procedures Policy Act.
Section 2. Legislative findings.
The General Assembly finds that:
(1) A majority of physicians in this Commonwealth are
reimbursed for their services to patients by third-party
payors. In some cases, this contractual relationship between
physician and insurer has existed for years without the
physician receiving from the insurer a formal contract or an
accurate or complete fee schedule detailing fees or the rules
or algorithms that actually define the rates at which
physicians are compensated for the services they render to
the payors' insureds.
(2) Most health care insurers in this Commonwealth
refuse to fully and accurately disclose their fee schedules
to participating physicians; therefore, doctors do not know
and cannot find out what they will receive in compensation
prior to performing a service.
(3) This insurer policy is manifestly unfair to
physicians. It is a breach of the physicians' contracts and
it facilitates further breaches of such contracts by making
it impossible for physicians to enforce their right to full
payment for services rendered.
(4) During the course of a single operative session, a
surgeon may perform multiple surgical procedures on the
patient. These multiple surgical procedures are separate and
distinct operations as defined by the Current Procedure
Terminology Coding System created by the American Medical
Association and other professional medical societies.
(5) The Current Procedural Terminology (CPT) Coding
System is utilized by all physicians to identify to payors
the services rendered by physicians and that payors purport
to adopt the same CPT Coding System in defining the services
for which they compensate such physicians.
(6) However, contrary to the dictates of the CPT Coding
System and without disclosing any such deviation to the
physicians with whom they contract, a number of health care
insurers in this Commonwealth compensate physicians as if the
procedures performed in addition to the primary procedure
were merely incidental to the primary procedure and therefore
such payors will compensate the surgeon for only one
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procedure.
(7) This insurer policy is inconsistent with the medical
judgments upon which the CPT Coding System is based, it is
not accurately disclosed to physicians, it is manifestly
unfair to surgeons, it leads to a lack of access to quality
health care services for patients, and it adds to the excess
profits insurers take from the health care delivery system.
Section 3. Declaration of intent.
The General Assembly hereby declares that it is the policy of
this Commonwealth that:
(1) Physicians should receive from health care insurers
a complete and accurate schedule of the reimbursement fees,
including any rules or algorithms utilized by the payors to
determine the amount physicians will be compensated if more
than one procedure is performed during a single treatment
session.
(2) Insurers must comply with their contractual
obligations and surgeons should be fairly and justly
compensated for all surgical procedures they perform in a
single operative session.
Section 4. 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:
"CPT." Current Procedural Terminology used by physicians as
developed by the American Medical Association.
"Fee schedule." The generally applicable monetary allowance
payable to a participating physician for services rendered as
provided for by agreement between the participating physician
and the insurer, including, but not limited to, a list of
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Healthcare Common Procedural Coding System (HCPCS) Level I
Codes, HCPCS Level II National Codes and HCPCS Level III Local
Codes and the fees associated therein; and a delineation of the
precise methodology used for determining the generally
applicable monetary allowances, including, but not limited to,
footnotes describing formulas, algorithms, rules and
calculations associated with determination of the individual
allowances.
"HCPCS." The Healthcare Common Procedural Coding System of
the Health Care Financing Administration that provides a uniform
method for health care providers and medical suppliers to report
professional services, procedures, pharmaceuticals and supplies.
"HCPCS Level I CPT Codes." The descriptive terms and
identifying codes used in reporting supplies and pharmaceuticals
used by, and services and procedures performed by, participating
physicians as listed in the CPT.
"HCPCS Level II National Codes." Descriptive terms and
identifying codes used in reporting supplies and pharmaceuticals
used by, and services and procedures performed by, participating
physicians.
"HCPCS Level III Local Codes." Descriptive terms and
identifying codes used in reporting supplies and pharmaceuticals
used by, and services and procedures performed by, participating
physicians which are assigned and maintained by Pennsylvania's
Centers for Medicare and Medicaid Services carrier.
"Insurer." Any insurance company, association or exchange
authorized to transact the business of insurance in this
Commonwealth. This shall also include any entity operating under
any of the following:
(1) Section 630 of the act of May 17, 1921 (P.L.682,
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No.284), known as The Insurance Company Law of 1921.
(2) Article XXIV of the act of May 17, 1921 (P.L.682,
No.284), known as The Insurance Company Law of 1921.
(3) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
(4) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations).
(5) 40 Pa.C.S. Ch. 63 (relating to professional health
services plan corporations).
(6) 40 Pa.C.S. Ch. 67 (relating to beneficial
societies).
"Participating physician." An individual licensed under the
laws of this Commonwealth to engage in the practice of medicine
and surgery in all its branches within the scope of the act of
December 20, 1985 (P.L.457, No.112), known as the Medical
Practice Act of 1985, or in the practice of osteopathic medicine
within the scope of the act of October 5, 1978 (P.L.1109,
No.261), known as the Osteopathic Medical Practice Act, who by
agreement provides services to an insurer's subscribers.
Section 5. Disclosure of fee schedules.
Within 30 days of the effective date of this section,
insurers shall provide their participating physicians with a
copy of their fee schedule, including all applicable rules and
algorithms utilized by the insurer to determine the amount any
such physician will be compensated for performing any single
procedure and any group of procedures during a single treatment
session, which are applicable on July 1, 2004, and annually
thereafter. Insurers shall also provide participating physicians
with updates to the fee schedule as modifications occur.
Section 6. Procedure for payment of multiple surgical
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procedures.
When a participating physician performs more than one
surgical procedure on the same patient and at the same operative
session, insurers shall pay the participating physician the
greater of the amount calculated on the basis of the applicable
insurer fee schedule and:
(1) any rules, algorithms, codes or modifiers included
therein, governing reimbursement for multiple surgical
procedures; or
(2) the principles governing reimbursement for multiple
surgical procedures set forth and established by the Centers
for Medicare and Medicaid Services within the United States
Department of Health and Human Services, including the rule
mandating payment to the physician of:
(i) 100% of the generally applicable maximum
monetary allowance for the procedure which has the
highest monetary allowance.
(ii) 50% of the generally applicable maximum
monetary allowance for the second through fifth
procedures with the next highest values.
(iii) Such payment amount as is determined following
submission of documentation and individual review for
more than five surgical procedures.
Section 7. Contract provisions.
Any provision in any contract, insurer policy or fee schedule
that is inconsistent with any provision of this act is hereby
declared to be contrary to the public policy of the Commonwealth
and is void and unenforceable.
Section 8. Violations.
An insurer violates:
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(1) Section 5 if the insurer fails to provide a
participating physician with a copy of the fee schedule and
updates to the fee schedule in the time frame provided in
section 5.
(2) Section 6 if the insurer fails to adhere to the
policy for payment of multiple surgeries as set forth and
established by the Centers for Medicare and Medicaid Services
within the United States Department of Health and Human
Services.
Section 9. Cause of action.
In addition to all statutory, common law and equitable causes
of action which already exist, a participating physician shall
have a private cause of action for any violation of any
provision of this act to enforce the provisions of this act. A
participating physician shall be entitled to recover from an
insurer any legal fees and costs associated with any suit
brought under this section.
Section 10. Termination of agreement.
In addition to other remedies provided in this act, a
participating physician may terminate the physician's agreement
with an insurer if the insurer violates the provisions of this
act. The physician may continue to provide services to the
insurer's insureds and shall receive compensation as an out-of-
network provider.
Section 11. Penalties.
Violations of this act shall be considered violations of the
act of May 17, 1921 (P.L.682, No.284), known as The Insurance
Company Law of 1921, and are subject to the penalties and
sanctions of section 2182 of The Insurance Company Law of 1921.
Section 20. Effective date.
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This act shall take effect immediately.
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