PRINTER'S NO. 2936
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2215
Session of
2024
INTRODUCED BY MALAGARI, ORTITAY, HILL-EVANS, SANCHEZ, MUNROE,
GUENST, KHAN, FREEMAN, DALEY, KINSEY, KENYATTA, GIRAL AND
CURRY, APRIL 15, 2024
REFERRED TO COMMITTEE ON INSURANCE, APRIL 15, 2024
AN ACT
Amending Title 40 (Insurance) of the Pennsylvania Consolidated
Statutes, in regulation of insurers and related persons
generally, providing for nondiscrimination by payers in
health care benefit plans.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 40 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 46
NONDISCRIMINATION BY PAYERS
IN HEALTH CARE BENEFIT PLANS
Sec.
4601. Definitions.
4602. Discrimination against willing facility prohibited.
4603. Applicability.
4604. Retaliation prohibited.
§ 4601. Definitions.
The following words and phrases when used in this chapter
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shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Ambulatory surgical facility." The term shall have the same
meaning as defined under section 802.1 of the act of July 19,
1979 (P.L.130, No.48), known as the Health Care Facilities Act.
"Arbitrator." An independent and impartial third party
accredited by a national or international organization that
specializes in dispute management with subject matter expertise
in health care.
"Baseball-style arbitration." A method by which an
arbitrator selects either the figure submitted by the health
care benefit plan or the figure submitted by the out-of-network
facility.
"CPT." The Current Procedural Terminology 2024 code set as
published by the American Medical Association.
"DRG." The Diagnosis Related Group classification system
that uses patient discharge information to classify patients
into clinically meaningful groups.
"Facility." A physician-owned hospital or physician-owned
ambulatory surgical facility.
"Health care benefit plan." An insurance policy, contract or
plan that provides health care to participants or beneficiaries
directly or through insurance, reimbursement or otherwise.
"Health care payer." An individual or entity that is
responsible for providing or paying for all or part of the cost
of health care services covered by a health care benefit plan.
The term includes, but is not limited to, an entity subject to
at least one of the following:
(1) Chapter 61 (relating to hospital plan corporations)
or 63 (relating to professional health services plan
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corporations).
(2) The act of May 17, 1921 (P.L.682, No.284), known as
The Insurance Company Law of 1921, including either of the
following:
(i) A preferred provider organization subject to
section 630 of The Insurance Company Law of 1921.
(ii) A fraternal benefit society subject to Article
XXIV of 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) An agreement by a self-insured employer or self-
insured multiple employer trust to provide health care
benefits to employees and the employees' dependents.
"Highest in-network rate." The highest rate for a service or
fee that is determined by identifying the contracted rates of
all plans of a health care payer or administering entity, if
applicable, or all coverage offered by the health care payer in
the same individual marketplace rating area as defined by the
department for the same or similar item or service that is
provided by a facility in the same or similar specialty or
facility type and provided in the geographic region in which the
item or service is furnished.
"Hospital." The term shall have the same meaning as defined
under section 802.1 of the Health Care Facilities Act.
"Out-of-network facility." A facility that has not
contracted with a health care payer to provide health care
services to insureds covered by a health care payer.
§ 4602. Discrimination against willing facility prohibited.
(a) General rule.--A health care payer shall reimburse a
willing facility of health care services. A health care payer
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shall not discriminate against a facility delivering health care
services who:
(1) Agrees to accept either the health care payer's
highest in-network rate or a baseball-style arbitration and
obtains and maintains Center for Medicare and Medicaid
Services accreditation status.
(2) Can perform the procedure at an earlier date than
the nearest in-network facility.
(3) Meets at least one of the following quality metrics:
(i) A hospital facility achieves a Hospital Consumer
Assessment of Healthcare Providers and Systems, or
successor rating system, patient satisfaction survey
rating of at least four stars.
(ii) An ambulatory surgical facility achieves an
Outpatient and Ambulatory Surgery Consumer Assessment of
Healthcare Providers and Systems, or successor rating
system, patient satisfaction survey rating of at least
four stars.
(4) Is owned, at least in part, by physicians practicing
at the out-of-network facility and who are in-network with
the health care payer.
(b) Arbitrator selection.--In determining whether the
arbitrator shall select the amount submitted by the health care
payer or the out-of-network facility for the health care service
rendered at an out-of-network facility, the arbitrator shall
select either the health care payer's or the facility's best and
final proposal for a payment amount without change based on
which of the amounts is most consistent with the criteria
specified under subsection (c).
(c) Criteria.--The determination of the arbitrator in
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selecting either the health care payer's or out-of-network
facility's payment amount shall be based exclusively on the
following:
(1) Whether there is a gross disparity between the out-
of-network facility's proposal for a reasonable payment
amount for the health care service or CPT or DRG code in
dispute as compared to the payment received by the out-of-
network facility for the same health care service, CPT or DRG
code from other health care payers in which the out-of-
network facility is under contract.
(2) Whether there is a gross disparity in the amount
proposed by the health care payer to the out-of-network
facility as compared to the amount paid by the health care
payer to the out-of-network facility as compared to the
amount paid to the other facilities in the same specialty for
the same health care service or CPT or DRG code and in the
same geographic area that is under contract with the health
care payer.
(3) The level of training, education, experience,
quality and outcome measurements of the out-of-network
facility.
(4) Other relevant economic aspects of the health care
payer and the out-of-network facility payments as adduced by
either party in arbitration.
(5) The circumstances and complexity of the particular
case, including the patient's medical history and the time
and cost of the health care service.
(6) Any final judgment of an award rendered by the
arbitrator between the health care payer and the out-of-
network facility for the same health care service, CPT or DRG
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code within the prior year.
(d) Bundling.--The parties in arbitration may bundle a
single health care service type, CPT or DRG code in multiple
cases between the same health care payer and the out-of-network
facility.
(e) Fees.--The arbitration fees shall be paid by the losing
party in the arbitration dispute, except if the arbitration
dispute is resolved as a result of a negotiation between the
parties after the initiation of the arbitration process, and the
arbitration fees shall be shared equally by the parties.
§ 4603. Applicability.
(a) Construction.--This chapter shall not be construed to
prohibit a health care payer from negotiating and paying rates
higher than the health care payer's standard payment levels to
one or more facilities.
(b) Application.--This chapter:
(1) Shall apply to health care benefit plans that
compensate facilities on a fee-for-service basis, per diem or
other nonrisk basis.
(2) May not apply to health care benefit plans regarding
products that compensate facilities on a capitated basis or
under which facilities accept significant financial risk in a
formal arrangement approved by Federal or State authorities.
§ 4604. Retaliation prohibited.
It shall be unlawful for a health care payer to terminate,
threaten or otherwise retaliate against an in-network physician
with ownership of an out-of-network facility for exercising
rights under this chapter.
Section 2. This act shall take effect in 60 days.
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