[31 Pa.B. 3043]
[Continued from previous Web Page] Section 9.751. Time frames for UR.
IRRC and another commentator recommended that the Department include the time frames for prospective, concurrent and retrospective UR contained in section 2152 of Article XXI, as well as other requirements included in that section. The commentator also recommended that a plan give enrollees and providers written or electronic confirmation within that time period. The commentator noted that this was consistent with NCQA standards. The Department has added these requirements from section 2152 of Article XXI in subsections (a)--(c). Section 2152(a)(6) of Article XXI requires that all decisions be in writing. Therefore, the Department has drafted this section of the regulations to apply to all decisions, approvals as well as denials, consistent with the requirements of Act 68. See 2152(a)(6) of the Article XXI.
For clarity, the Department has also included language in subsection (d), which states that a grievance review decision must comply with the time frames and requirements of §§ 9.705 and 9.707.
One commentator commented on the lack of time frames, the failure of the regulations to ensure personnel conducting URs remain licensed in good standing, the failure of the regulations to address potential conflicts of interest between plans and CREs, and the failure of the regulations to prohibit incentives offered by plans to CREs. As discussed previously, the Department has added language regarding time frames in this section. Act 68 itself speaks to licensure requirements (see 2152(a)(5) of Article XXI) and financial incentives requirements (see 2152(b) of Article XXI), which the Department has not specifically added. The Department has, however, required that entities performing UR comply with the requirements of section 2152 of the Article XXI, which would include these requirements. See § 9.750(h).
With respect to conflicts of interest, there are two distinct situations that involve CREs: one is UR and the other is external grievance reviews. In the latter situation, the Department's regulations have addressed the issue. See § 9.707(f)--(i). For a standard UR decision, one can take the absolute position that there is always an inherent conflict of interest since the CRE is reviewing the matter for the plan, and not for the enrollee, and is compensated by the plan and not the enrollee. The check and balance to this is the ability of the requesting physician and the enrollee to appeal the denial as a grievance that will result in the matter being heard by an independent reviewing entity. It is for this reason the Department has included this language in § 9.707(f)--(i).
IRRC requested an explanation of how the Department will determine whether a CRE has the capability of meeting these requirements. The Department's application requests certification from the applicant that it can meet these time frames (see § 9.744(a)(4) and (5)) and references. See § 9.743(b)(5)(ix). The Department will conduct readiness reviews and reference checks, and will investigate complaints lodged against CREs.
Several commentators requested the addition of language that would specifically state that the Department would develop mechanisms to ensure CREs would comply with the final-form regulations. The Department has made no change. The Department is charged with enforcement under Act 68. Therefore, it will monitor, investigate and take appropriate action to ensure compliance with this and all aspects of the statute and regulations. It is unnecessary to include language to make that clearer in this section than in any other.
One commentator also requested the addition of language that would prohibit plans from retrospectively denying payment for a health care service if an authorized representative of the plan had previously authorized provision of the service. The commentator stated that a plan should not be able to retroactively deny payment if the provider had not withheld any information considered to be reasonably necessary to grant prospective or concurrent authorization.
The Department has declined to add this language. As discussed earlier, retrospective review is clearly permissible under section 2151(a)(4)(iii) of the Article XXI. If the only decision a plan can make retrospectively is to approve payment, and it can never deny payment, the only course of action left to the plan is to deny all services prospectively and concurrently and pay those that are appropriate based on retrospective review. In the Department's opinion, a plan should have the ability to deny retrospectively if the service was not necessary or appropriate. This would only be done if the actual situation turns out to be different from how it was represented at the time services were prospectively or concurrently approved. Practically speaking, this can happen even if there was no withholding of reasonably necessary information.
The commentator also recommended the addition of several specific standards from Act 68, requirements for telephone access; requirements for maintenance of adverse decisions for 3 years; requirements for maintenance of decisions as confidential; requirements for utilization management personnel; prohibitions against financial incentives to approve or deny payment; and a requirement that denials must be conducted by physicians or approved licensed psychologists. See 2152 of Article XXI.
Again, the Department has included these standards either specifically in §§ 9.748--9.751 or by its reference in § 9.741(c) to section 2152 of Article XXI, which contains those standards.
The commentator also recommended that the Department require disclosure of the name and credentials of the physician or psychologist reviewing the decision.
All denials of coverage for a requested health care service must be made by a licensed physician or an approved licensed psychologist if the act permits. See subsection (d). The Department takes the position that reviewing physicians provide expert opinions to the plan and the plan is responsible for its actions as a result of those opinions. To require disclosure of the physician's name and credentials could unintentionally expose the reviewer to intimidation or reprisal from enrollees, family members or the medical community, and may serve to dissuade physicians from providing expert opinion which would seriously erode the caliber and content of UR decisions.
Several commentators recommended that the Department require plans to provide clinical rationales in denial decision letters. Although this is required generally in Act 68, for further emphasis, the Department agrees that UR standards should require clear clinical rationale in the decisions, and has added language to that effect in § 9.750(f).
One commentator commented that the Department should add language requiring plans to comply at all times with the requirements of Act 68. The commentator stated that the Department should clarify that without the ability to meet certain requirements, and an affirmation that the applicant will meet the requirements, certification as a CRE will not be granted. Further, the commentator stated that the Department must be able to subject a CRE to additional review if it believes the CRE is failing to comply with Insurance's regulations.
For the purposes of clarity, the Department has added a statement to § 9.748(a) stating that a CRE must continue to comply with the requirements of Act 68 and the regulations to maintain certification. However, since Insurance is not responsible for the regulation of CREs (see generally sections 2151 and 2152 of Article XXI), adding the language recommended with respect to a CRE's failure to comply with Insurance's regulations would be meaningless.
Subchapter L. Credentialing The Department received several comments on the single section in this proposed subchapter. One commentator supported the Department's proposed regulation, stating that the section would help to support the spirit of Act 68, specifically the intent to enhance the access of this Commonwealth's citizens to the quality health care provided by CRNPs, particularly in medically underserved areas. The remainder of the comments recommended language changes.
Proposed § 9.761 proposed requiring a plan to create a credentialing system, and to develop certain policies and procedures for that system. One commentator commented on the lack of minimum credentialing standards, and recommended that the Department set those standards. The Department agrees that such standards are necessary, and has included them in § 9.762.
Section 9.671. Credentialing.
Two commentators raised concerns that the proposed section would not require plans to comply with their own credentialing systems, and that the proposed section contained no enforcement authority for the Department to ensure that they would do so.
Section 9.606 delineates the Department's enforcement authority; it does not need to be repeated or cross-referenced in each section for the Department to be able to enforce compliance with the regulation. The Department has, however, added language to subsection (a) stating that a plan must adhere to the credentialing system it establishes.
One commentator also commented that the proposed section would contain no mechanisms for the Department to become involved in credentialing decisions.
The Department has made no change to the proposed section in response to this comment. The statute does not give the Department the authority to be an appellate body on credentialing issues. Act 68 only requires that a plan give the provider a clear basis for its decision. See section 2121(f) of Article XXI. The Department does have the authority to, and will investigate the plan's compliance with policies and procedures, and with Act 68 and the regulations.
Two commentators commented on proposed subsection (a)(2). One commentator questioned whether the recredentialing requirement would include individuals such as durable medical equipment suppliers, physical therapists, registered nurses and physicians' assistants. The commentator noted that Act 68 defines these types of individuals as health care providers, and the Department uses the term ''health care provider'' in proposed subsection (a). The commentator raised the issue because NCQA does not require credentialing of these individuals, and HCFA does not include durable medical equipment suppliers as providers of health care.
Another commentator requested that the Department clarify whether proposed subsection (a)(2) would apply only to professional providers, or whether it would apply to facility providers as well. The commentator stated that facility providers should not be recredentialed every 2 years because they are subject to their own credentialing programs which assure quality of care is being provided, for example, during the reviews of the Joint Commission on Accreditation of Health Organizations (JCAHO).
After reviewing these comments, the Department agrees that these issues need to be addressed in the regulations. The Department has, therefore, added a section addressing credentialing of those health care providers who are not physicians. To the extent the nonphysician provider is required by law to be licensed and to maintain malpractice insurance, the plan must verify at least these two items. See § 9.763 (relating to nonphysician providers at facility, agency or organization). Section 9.763 eliminates the requirement that plans credential nonphysician providers in cases where the providers are credentialed by the facility. First, the plan must make the determination that the nonphysician providers practice under the auspices of a facility, organization or agency that credentials those providers. Second, the facility, agency or organization must also conduct credentialing according to the credentialing standards in § 9.762 (relating to credentialing standards). If this is the case, the plan need not credential those nonphysician providers.
Generally, plans only credential physicians. Act 68's definition of a health care provider expands credentialing to all types of providers. See section 2121(a) of Article XXI. Section 9.763 will allow plans to contract with pharmacies without having to credential each pharmacist, home health agencies without credentialing each home health aide, hospitals without credentialing each nurse and ambulance companies without having to credential emergency medical services personnel.
The Department has revised subsection (a)(2) to require credentialing of health care providers every 3 years, to take into account a change in the requirements of the Nationally recognized accrediting body approved by the Department.
One commentator commented that proposed subsection (a)(3) would extend credentialing, which is now only required for primary care providers, to all health care providers. The commentator noted that NCQA has removed specialists from the specific credentialing requirements cited in this proposed section. The commentator recommended changing the language of proposed subsection (a)(3) to limit its application to primary care providers.
The Department acknowledges that NCQA has made changes in its credentialing requirements specifically deleting the requirement of an office site audit in the case of high volume specialists. Act 68, however, requires credentialing for health care providers, a term that encompasses more types of providers that the term ''primary care provider.'' Compare the definition of ''health care provider'' in Act 68 with that of ''primary care provider.'' See section 2102 of Article XXI. Subsection (a)(3) was based upon section 2111(1) of Article XXI, which requires a plan to assure the availability and accessibility of adequate health care providers, and section 2121(a) of Article XXI, which requires a plan to establish a system for credentialing health care providers. Act 68 then extended those access and availability elements that were traditionally limited to primary care providers to all health care providers.
Because the requirements of this proposed paragraph were intended to apply to more than primary care providers, the Department has determined that certain revisions to the paragraph are necessary to reflect that fact. Therefore, the Department has deleted references to appointments and to routine physical examinations, and has included in the final regulation references to the more general term ''care.'' For example, subsection (a)(3) requires a review of a provider's ability to provide urgent care, rather than urgent care appointments.
One commentator stated that Department would violate the intent of Act 68 by including the language of proposed subsection (a)(8) in the final-form regulations. The commentator stated that plans could use credentialing procedures to limit access to obstetrical and gynecological services.
Another commentator made the same comment, and requested that the Department add specific language prohibiting plans from using credentialing practices to prevent family physicians from providing obstetrical and gynecological services. The commentator stated that nothing in Act 68 would preclude a physician who was experienced, well trained and could provide quality of care in obstetrical and gynecological services, for example, family physicians, from being accessed by patients under the direct access provision of the act. The commentator recommended that, to the extent this proposed paragraph would permit prohibition of direct access, it should be deleted.
The Department is aware, as the commentator noted, that at least one plan is taking the position that, since Act 68 requires plans to credential providers for the provision of directly accessed obstetrical and gynecological services, it can establish acceptable credentials for those providers. The Department has given serious consideration to this issue. It is aware of the importance to the provider groups whose members believe they have the expertise and experience to provide quality health care in these areas. After review of the comments, however, the Department, does not believe that the language it proposed would violate Act 68, and it has made no change to that language. Act 68 requires that a plan provide access to services, not to providers. See section 2111(7) of Article XXI. (Provide direct access to obstetrical and gynecological services by permitting an enrollee to select a health care provider participating in the plan to obtain maternity and gynecological care.) A plan that wishes establish acceptable credentials and thereby provide direct access to obstetrical and gynecological services only through certain types of providers, may do so. This would place no restraint upon an enrollee's direct access to obstetrical and gynecological services.
One commentator has raised a similar issue with respect to standing referrals. The commentator has recommended the addition of language to proposed subsection (a)(9), which would require the primary care physician to determine if a patient requires referral to a specialist to act as a primary care provider. The commentator recommended additional standards for this determination, including that the medical condition be severe, and a listing of examples of severe medical conditions warranting referral.
The Department has not made the change recommended by the commentator. Act 68 makes it the enrollee's option to request a standing referral and the plan's option to permit it. It does not give the primary care provider veto power or the right to determine if the enrollee's condition warrants a standing referral. The recommended language could create limitations on an enrollee's right to obtain a standing referral or to have a specialist designated as a primary care provider. The statute does not require the primary care provider's consent for this designation, the statute does not even specifically require the primary care provider's involvement. Initiation of the request is made by the enrollee, and may be made directly to the plan, unless the plan's procedures permit otherwise. It is up to the plan to set standards for whether or not the request is granted.
Further, Act 68 states that an enrollee may request a referral or designation of a specialist if the enrollee has ''a life-threatening, degenerative or disabling disease or condition.'' See section 2111(6) of Article XXI. The adoption of the recommended standard, ''severe medical condition,'' would go beyond the terms of the act, and be unduly restrictive.
The Department has added subsection (a)(10) to clarify that the policies and procedures must ensure that enrollees have access to only those participating providers who have been properly credentialed. This states the obvious, but is intended to prevent situations in which plans or their contractors have unwittingly permitted enrollees to be served by noncredentialed participating providers.
The Department received several comments on proposed subsection (b) requesting clarification on the requirement that a plan must submit its credentialing plan to the Department for approval. One commentator questioned what type and what amount of information must be submitted regarding the credentialing process. This commentator pointed out that demonstration of compliance could range from being NCQA accredited to providing the Department with updates on numbers of practitioners credentialed, recredentialed and terminated for quality reasons every 2 years.
IRRC requested that the Department clarify that the credentialing plans would, in fact, be submitted to the Department for approval. A plan must submit its credentialing process, including policies and procedures, to the Department for its approval. As IRRC requested, the Department has added language to subsection (b) to clarify this. The Department, as a matter of course, has already reviewed and approved the credentialing plans for all HMOs as part of the external quality assurance review conducted by NCQA. The Department has, therefore, changed the language so that the final-form regulations require applicants to provide credentialing processes for review and approval prior to implementation or when modified. A plan whose credentialing process has been approved will then need to only submit changes to that credentialing process for approval prior to implementation.
The Department has also clarified the proposed subsection to require the plan to make a report of credentialing activities as required by section 2121(b) of Article XXI, including the number of applications for credentialing made, and the number of applications approved, rejected and the number of providers terminated for reasons of quality. The report must be submitted by a plan to the Department every 2 years. See subsection (f).
The Department has also clarified the proposed subsection to require the plan to make a report of credentialing activities as required by section 2121(b) of Article XXI, including the number of applications for credentialing made, and the number of applications approved, rejected and the number of providers terminated for reasons of quality. The report must be submitted by a plan to the Department every 2 years. See subsection (f).
IRRC also stated that the Department should provide, in the regulation, the process and time frame for review and approval of the credentialing plan. The Department believes that the process was sufficiently set out in proposed subsection (b). A plan will submit its credentialing process to the Department for review and approval, and the Department, through its staff will review the process. Most likely, the Department will find it necessary to discuss aspects of the credentialing process with the plan. The Department has declined to set time limits for review in its final-form regulations, but the Department will make every effort to approve credentialing plans within 60 days of their being submitted in complete form to the Department.
The Department received three comments on proposed subsection (c). One commentator questioned how the plan would demonstrate that its credentialing plan meets or exceeds the standards of a Nationally recognized accrediting body. The commentator recommended that the Department accept a credentialing system that meets the requirements of an accrediting body, and change the word ''may'' included in the proposed subsection to ''shall.''
The Department has made no change to this proposed subsection. A plan may show the Department it meets the requirements of a Nationally recognized accrediting body by sending to the Department a copy of the certification letter sent to the plan by the accrediting body. Additionally, the plan must provide the Department with a copy of the full external quality assurance assessment report in accordance with § 9.654, and the Department is therefore able to review that portion of the assessment relating to credentialing.
Because the Department is responsible for determining whether or not the plan meets the standards of Act 68 and the regulations, the Department cannot cede this responsibility to any outside body. Therefore, the Department will review the report of the accrediting body, and make a determination of whether to accept or reject the report, or whether to conduct further investigation. Therefore, the Department will not change the language of this subsection.
Another commentator requested that the Department state when it intended to publish a list of Nationally recognized bodies for credentialing purposes. The Department will publish a list of acceptable accrediting bodies in the Pennsylvania Bulletin at least annually.
The Department received one comment on proposed subsection (d), which strenuously opposed the proposed regulation on the grounds that it would create serious liability issues for plans.
The Department has not changed the proposed subsection. Insurance's regulations also prohibit a plan from requiring full credentialing of nonparticipating providers as a plan condition in a continuity of care situation. The Department's language is consistent with Insurance's language. Since full credentialing generally takes at least 90 days to complete, requiring full credentialing of a nonparticipating provider before allowing the enrollee to continue care with that provider would vitiate the 60-day continuity of care period allowed by statute. See section 2117(a) of Article XXI. Plans have complained that not fully credentialing providers will create tort liability for them. The Department has said that it will minimally allow plans to require verification of current licensure and malpractice coverage should plans wish to do so, since these items can be verified within days, and will not jeopardize the enrollee's ability to benefit from the continuity of care provision. Other options may be available to protect against liability; for example, plans may obtain waivers from any enrollee who wishes to continue care with a provider who is not fully credentialed.
The newly effective health plan should, at the least, verify licensure and malpractice coverage of health care providers so the enrollee has a financial protection if malpractice occurs.
The Department received one comment on proposed subsection (e). A commentator recommended that the Department change the language to require plans to provide the credentialing requirements automatically along with the application packet.
The Department has declined to make this change, given the cost to the plan of providing the information automatically. This information is not useful to providers already contracted to the plan. If an applicant particularly wants the information, it is available to the applicant upon request.
Section 9.672. Credentialing standards.
Section 9.762 will require minimum standard for credentialing. Subsection (a) requires a plan to verify certain specified credentialing elements for primary care providers and specialists, including current licensure, education and training, board certification status, Department Drug Enforcement Agency (DEA) certification, current and adequate malpractice coverage, malpractice claims history, work history, hospital privileges if the provider provides services at hospitals and any other information the Department may require upon prior notice in the Pennsylvania Bulletin. Subsection (b) includes minimum requirements for credentialing of nonprimary care providers and nonspecialists. The section requires a plan to at least verify a provider's current licensure and malpractice coverage, to the extent that licensure and malpractice coverage is required by State and Federal laws.
Cost And Paperwork Estimates
A. Cost
The final-form regulations will have no measurable fiscal impact on local governments or the general public. The members of the general public enrolled in managed care plans governed by the regulations may ultimately experience some increase in health care costs due to the statutory requirements, such as external grievance filing fees.
The replacement and revision of the previous regulations in Chapter 9 will create no additional cost to the Commonwealth, since these revisions reflect the current operations of the Department. There is no fiscal impact even though there are additional monitoring duties placed on the Department by Act 68. Those duties are reflected in provisions of the final-form regulations relating to health care accountability and access, complaints and grievances, provider contracts, accreditation of UR entities, and credentialing. The Department is, among other things, required to review additional contracts and grievance and complaint procedures submitted by managed care plans, and requests for certification from UR entities. The Department also coordinates the external review procedure set out in Act 68, which requires the Department to certify, appoint and monitor the operations of the certified review entity conducting the review.
The final-form regulations relating to HMOs do not have a significant fiscal impact upon HMOs since comprehensive revision and updating of the HMO regulations should make compliance with those regulations easier. HMOs are filing standard form contracts for providers and IDS agreements with the Department now. HMOs do not send to the Department every contract entered into between an HMO and a provider. The Department did not propose that it review and approve every contract entered into. The incremental cost for an HMO of continuing the practice of filing standard for contracts is negligible.
It is possible that the Department's review period will postpone the plan's ability to use a contract through which it intends to implement cost savings. The Department cannot quantify the amount of money lost in savings during that review period, since each specific contract would have its own unique associated savings, paperwork reduction or operational efficiencies, for example. There could also be reduced reimbursements associated with a new contract; however, reduction in plan reimbursement does not currently require a new contract and would not be the sole purpose for a plan changing its standard form contract.
Under the final-form regulations, managed care plans that are not HMOs will also be required to file standard form contracts. If a non-HMO plan uses provider contracts already approved for a related HMO, the requirement would place little burden on the plan. It is common practice for a plan with multiple lines of business (HMO, PPO, Point-of-Service, indemnity) to use one standard form contract and address variations in reimbursements or terms through specific amendments or exhibits. The cost to the plan of the Department reviewing contracts is, in concrete terms, made up of minimal copying and postage fees.
Depending upon how HMOs and other managed care plans operated their grievance systems prior to Act 68, that act and the Department's regulations may create additional costs, because of the Department's inclusion in the regulations of its ''fundamental fairness'' guidelines for complaint and grievance reviews. These requirements may increase HMO and non-HMO plan staff time in setting up procedures, and in preparing for individual reviews. There may also be some increased cost to HMO and non-HMO plans since the regulations and Act 68 require a certain composition of review committees, which may add to the cost of the review. The additional disclosure requirements of Act 68 may also have a fiscal impact upon managed care plans, including HMOs.
The final-form regulations also create a fiscal impact on entities wishing to be certified as UR entities. The Department is adopting an application fee for entities requesting certification, as Act 68 authorizes it to do. This certification requirement does not apply to licensed insurers or managed care entities with certificates of authority.
B. Paperwork
There will be changes in paperwork requirements associated with the final-form regulations. Although the paperwork requirements for HMOs to obtain and maintain certificates of authority will not be significantly altered, the regulations implementing Act 68 require submission of documents from entities not previously regulated. These requirements require the Department to review additional contracts and grievance and complaint procedures submitted by managed care plans, and requests for certification from UR entities. The Department also coordinates the external grievance review procedure required by Act 68, which requires the Department to appoint and oversee the operations of the certified review entity conducting the review.
There may be additional paperwork for managed care plans that are not HMOs, since they will be required for the first time to submit provider contracts and complaint and grievance procedures and data to the Department. This paperwork could be minimal, depending on whether the non-HMO plan uses an already approved contract in use by an affiliated HMO. HMOs were required by previous regulations to make these submissions.
Act 68 creates additional paperwork, since the plans must comply with the mandated complaint and grievance systems detailed in that act. Depending upon how plans operated their grievance systems prior to Act 68, that act and the Department's regulations may require additional paperwork of the plans. The Department is including in the final-form regulations its guidelines on how to conduct a fair complaint and grievance review. Depending upon how a plan is currently conducting reviews, the plan may need to revise policies and procedures to comply with the act and the final-form regulations.
Further, again depending upon how managed care plans operated prior to Act 68, that act's requirement that certain disclosures be made to enrollees may result in an increase in paperwork. Act 68 also creates additional paperwork for CREs. Under Act 68, CREs are required to obtain certification from the Department to perform URs of health care services delivered or proposed to be delivered in this Commonwealth. Prior to the passage of Act 68, this requirement did not exist.
Act 68 and the regulations may also create some different or additional paperwork for those members of the general public who obtain health care through managed care plans covered by Act 68. Depending upon the dispute resolution system established by plans prior to Act 68, there may be alterations in the manner in which an enrollee must utilize these procedures.
Effective Date/Sunset Date
The final-form regulations will be effective immediately upon final adoption. No sunset date has been established. The Department will continually review and monitor the effectiveness of these regulations.
Statutory Authority
The Department's authority to promulgate these final-form regulations is based upon three statutes: the HMO Act, the PPO Act and Act 68.
The Department has authority to promulgate regulations relating to the certification and operations of HMOs under section 14 of the HMO Act. Section 5.1(a) of the HMO Act provides the Department with the authority to determine what information will be contained in a corporation's application for certification as an HMO. Section 5.1(b)(1)(i) of the HMO Act provides the Department with authority to determine whether an HMO has demonstrated potential ability to assure both availability and accessibility of adequate personnel and facilities in a manner enhancing availability, accessibility and continuity of services. Section 5.1(b)(1)(ii) of the HMO Act provides the Department with authority to determine whether an HMO has demonstrated it has arrangements for an ongoing quality of health care assurance program. Section 5.1(b)(1)(iii) of the HMO Act provides the Department with authority to determine whether an HMO has appropriate mechanisms to effectively provide or arrange for the provision of basic health care services on a prepaid basis. Section 8(a) of the HMO Act allows the Secretary to require renegotiation of provider contracts when those contracts provide for excessive payments, fail to include reasonable incentives, or contribute to escalation of costs of health care services to enrollees. Section 8(a) of the HMO Act also permits the Secretary to require renegotiation when the Secretary determines that the contracts are inconsistent with the purposes of the HMO Act. Section 10(e) of the HMO Act requires that an HMO establish and maintain a grievance resolution system satisfactory to the Secretary. Section 11(c) of the HMO Act provides the Secretary and the Secretary's agents with free access to all books, records, papers and documents that relate to the nonfinancial business of the HMO. Finally, section 15 of the HMO Act provides the Department with the authority to suspend or revoke an HMO's certificate of authority, or to fine the HMO for violations of the HMO Act.
The Department has authority to promulgate regulations relating to health care accountability and protection and facilitating the implementation of Article XXI under section 2181(e) of that article. Article XXI governs managed care plans as defined by Act 68, which include, inter alia, HMOs and gatekeeper PPOs. See 2102 of Article XXI (relating to the definition of ''managed care plan''). Article XXI also regulates UR entities operating or wishing to operate in this Commonwealth. See section 2151 and 2152 of Article XXI. The Department has authority to enforce compliance with Article XXI under section 2181(d) of Article XXI, and to impose fines, obtain injunctions, require plans of correction and ban enrollment under section 2182 of Article XXI.
Section 2102(g) of The Administrative Code of 1929 (71 P. S. § 532(g)), provides the Department with general authority to promulgate its regulations.
The Department also has authority to review and approve grievance resolution systems and to require quality and utilization controls of certain PPOs under the PPO Act. Section 630(e) of the PPO Act requires that Insurance consult with the Department in determining whether arrangements and provisions for a PPO which assumes financial risk, which may lead to undertreatment or poor quality care, are adequately addressed by quality and utilization controls, as well as by a formal grievance system.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on December 8, 1999, the Department submitted a copy of notice of proposed rulemaking published at 29 Pa. B. 6409 (December 18, 1999) to IRRC and the Chairpersons of the House Health and Human Services Committee and the Senate Public Health and Welfare Committee for review and comment.
In compliance with section 5(c) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of all comments received, as well as other documentation.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), the Department submitted a copy of the final-form regulations to IRRC and the Committees on February 28, 2001. In addition, the Department provided IRRC and the Committees with information pertaining to commentators and a copy of a detailed regulatory analysis form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
In preparing this final form regulations, the Department has considered all comments received from IRRC, the Committees and the public.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), these final-form regulations were approved by the House Committee on April 2, 2001, and approved by the Senate Committee on March 27, 2001. IRRC met on April 5, 2001, and approved the final-form regulations in accordance with section 5.1(e) of the Regulatory Review Act.
Contact Person
Questions regarding these final-form regulations may be submitted to Stacy Mitchell, Director, Bureau of Managed Care, Department of Health, P. O. Box 90, Harrisburg, PA 17108-0090 (717) 787-5193. Persons with disabilities may submit questions in alternative formats such as audio tape, Braille or by using V/TT (717) 783-6514 for speech and/or hearing impaired persons or the Pennsylvania AT&T Relay Service at (800) 654-5984 [TT]). Persons who require an alternative format of this document may contact Stacy Mitchell at the address or telephone numbers previously listed so that necessary arrangements may be made.
Findings
The Department finds that:
(1) Public notice of the intention to adopt the final-form regulations adopted by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202), and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments were considered.
(3) The adoption of final-form regulations in the manner provided by this order is necessary and appropriate for the administration of the authorizing statutes.
Order
The Department, acting under the authorizing statutes, orders that:
(a) The regulations of the Department at 28 Pa. Code Chapter 9, are amended by deleting §§ 9.1, 9.2, 9.31, 9.32, 9.51--9.55, 9.71--9.77, 9.91--9.97, 9.401--9.416 and 9.501--9.519 and by adding §§ 9.601--9.606, 9.621--9.623, 9.631--9.635, 9.651--9.654, 9.671--9.685, 9.701--9.711, 9.721--9.725, 9.741--9.751 and 9.761--9.763 to read as set forth in Annex A.
(b) The Secretary of Health shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General for approval as required by law.
(c) The Secretary of Health shall submit this order, Annex A and a Regulatory Analysis Form to IRRC, the House Committee on Health and Human Services and the Senate Committee on Public Health and Welfare for their review and action as required by law.
(d) The Secretary of Health shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(e) This order shall take effect upon publication in the Pennsylvania Bulletin.
ROBERT S. ZIMMERMAN, Jr.,
Secretary(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 31 Pa.B. 2238 (April 21, 2001).)
Fiscal Note: Fiscal Note 10-160 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 28. HEALTH AND SAFETY
PART I. GENERAL HEALTH
CHAPTER 9. MANAGED CARE ORGANIZATIONS
Subchapter A. (Reserved) § 9.1. (Reserved).
§ 9.2. (Reserved).
§ 9.31. (Reserved).
§ 9.32. (Reserved).
§§ 9.51--9.55. (Reserved).
§§ 9.71--9.77. (Reserved).
§§ 9.91--9.97. (Reserved).
Subchapter D (Reserved) §§ 9.401--9.416. (Reserved).
Subchapter E. (Reserved) §§ 9.501--9.519. (Reserved).
Subchapter F. GENERAL Sec.
9.601. Applicability. 9.602. Definitions. 9.603. Technical advisories. 9.604. Plan reporting requirements. 9.605. Department investigations. 9.606. Penalties and sanctions. § 9.601. Applicability.
(a) This chapter applies to managed care plans as defined by section 2102 of the act (40 P. S. § 991.2102) unless expressly stated otherwise. Plans are advised to consult the regulations of the Insurance Department on these topics. See 31 Pa. Code Chapters 154 and 301 (relating to quality health care accountability and protection; and health maintenance organizations) to ensure complete compliance with Commonwealth requirements.
(b) An entity, including an IDS, subcontracting with a managed care plan to provide services to enrollees shall meet the requirements of Article XXI of the act, and Subchapters H--L for services provided to those enrollees.
(c) This chapter does not apply to ancillary service plans.
§ 9.602. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Act--The Insurance Company Law of 1921 (40 P. S. §§ 361--991.2361).
Act 68--The act of June 17, 1998 (P. L. 464, No. 68) (40 P. S. §§ 991.2001--991.2361) which added Articles XX and XXI of the act.
Active clinical practice--The practice of clinical medicine by a health care provider for an average of not less than 20 hours per week.
Ancillary service plan--
(i) An individual or group health insurance plan, subscriber contract or certificate, that provides exclusive coverage for dental services or vision services.
(ii) The term also includes Medicare Supplement Policies subject to section 1882 of the Social Security Act (42 U.S.C.A. § 1395ss) and the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) supplement.
Ancillary services--A health care service that is not directly available to enrollees but is provided as a consequence of another covered health care service, such as radiology, pathology, laboratory and anesthesiology.
Article XXI--Sections 2101--2193 of the act (40 P. S. §§ 991.2101--991.2193) relating to health care accountability and protection.
Basic health services or basic health care services--The health care services in § 9.651 (relating to HMO provision and coverage of basic health care services to enrollees).
CRE--Certified utilization review entity--An entity certified under this chapter to perform UR on behalf of a plan.
Certificate of authority--The document issued jointly by the Secretary and the Commissioner that permits a corporation to establish, maintain and operate an HMO.
Commissioner--The Insurance Commissioner of the Commonwealth.
Complaint--
(i) A dispute or objection by an enrollee regarding a participating health care provider, or the coverage (including contract exclusions and non-covered benefits), operations or management policies of a managed care plan, that has not been resolved by the managed care plan and has been filed with the plan or the Department or the Insurance Department.
(ii) The term does not include a grievance.
Department--The Department of Health of the Commonwealth.
Drug formulary--A listing of a managed care plan's preferred therapeutic drugs.
EQRO--External quality review organization--An entity approved by the Department to conduct an external quality assurance assessment of an HMO.
Emergency service--
(i) A health care service provided to an enrollee after the sudden onset of a medical condition that manifests itself by acute symptoms of sufficient severity or severe pain such that a prudent layperson who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in one or more of the following:
(A) Placing the health of the enrollee or, with respect to a pregnant woman, the health of the woman or her unborn child in serious jeopardy.
(B) Serious impairment to bodily functions.
(C) Serious dysfunction of any bodily organ or part.
(ii) Transportation and related emergency services provided by a licensed ambulance service shall constitute an emergency service if the condition is as described in subparagraph (i).
Enrollee--A policyholder, subscriber, covered person or other individual who is entitled to receive health care services under a managed care plan. For purposes of the complaint and grievance processes, the term includes parents of a minor enrollee as well as designees or legal representatives who are entitled or authorized to act on behalf of the enrollee.
External quality assurance assessment--A review of an HMO's ongoing quality assurance program and operations conducted by a nonplan reviewer such as a Department-approved EQRO.
Foreign HMO--An HMO incorporated, approved and regulated in a state other than the Commonwealth.
Gatekeeper--A primary care provider selected by an enrollee or appointed by a managed care plan, or the plan or an agent of the plan serving as the primary care provider, from whom an enrollee shall obtain covered health care services, a referral or approval for covered nonemergency health services as a precondition to receiving the highest level of coverage available under the managed care plan.
Gatekeeper PPO--A PPO requiring enrollee use of a gatekeeper from which an enrollee must receive referral or approval for covered health care services as a requirement for payment of the highest level of benefits.
Grievance--
(i) A request by an enrollee, or a health care provider with the written consent of the enrollee, to have a managed care plan or CRE reconsider a decision solely concerning the medical necessity and appropriateness of a health care service. If the managed care plan is unable to resolve the matter, a grievance may be filed regarding the decision that does any of the following:
(A) Disapproves full or partial payment for a requested health service.
(B) Approves the provision of a requested health care service for a lesser scope or duration than requested.
(C) Disapproves payment of the provision of a requested health care service but approves payment for the provision of an alternative health care service.
(ii) The term does not include a complaint.
HMO--Health maintenance organization--An organized system that combines the delivery and financing of health care and which provides basic health services to voluntarily enrolled members for a fixed prepaid fee.
HMO Act--The Health Maintenance Organization Act (40 P. S. §§ 1551--1568).
Health care provider--A licensed hospital or health care facility, medical equipment supplier or person who is licensed, certified or otherwise regulated to provide health care services under the laws of the Commonwealth, including a physician, podiatrist, optometrist, psychologist, physical therapist, certified nurse practitioner, registered nurse, nurse midwife, physician's assistant, chiropractor, dentist, pharmacist or an individual accredited or certified to provide behavioral health services.
Health care service or health service--Any covered treatment, admission, procedure, medical supply, equipment or other service, including behavioral health, prescribed or otherwise provided or proposed to be provided by a health care provider to an enrollee under a managed care plan contract.
IDS--Integrated delivery system--
(i) A partnership, association, corporation or other legal entity which does the following:
(A) Enters into a contractual arrangement with a plan.
(B) Employs or contracts with health care providers.
(C) Agrees under its arrangement with the plan to do the following:
(I) Provide or arrange for the provision of a defined set of health care services to enrollees covered under a plan contract principally through its participating providers.
(II) Assume under the arrangement with the plan some responsibility for conducting in conjunction with the plan and under compliance monitoring of the plan quality assurance, UR, credentialing, provider relations or related functions.
(ii) The IDS may also perform claims processing and other functions.
Inpatient services--Care, including professional services, at a licensed hospital, skilled nursing or rehabilitation facility, including preadmission testing, diagnostic testing related to an inpatient stay, professional and nursing care, room and board, durable medical equipment, ancillary services, drugs administered during an inpatient stay, meals and special diets, use of operating room and use of intensive care and cardiac units.
Managed care plan or plan--
(i) A health care plan that does each of the following:
(A) Uses a gatekeeper to manage the utilization of health care services.
(B) Integrates the financing and delivery of health care services to enrollees by arrangements with health care providers selected to participate on the basis of specific standards.
(C) Provides financial incentives for enrollees to use the participating health care providers in accordance with procedures established by the plan.
(ii) A managed care plan includes health care arranged through an entity operating under any of the following:
(A) Section 630 of the act.
(B) The HMO act.
(C) The Fraternal Benefit Society Code.
(D) 40 Pa.C.S. §§ 6102--6127 which relates to hospital plan corporations.
(E) 40 Pa.C.S. §§ 6301--6334 which relates to professional health services plan corporations.
(iii) The term includes an entity, including a municipality, whether licensed or unlicensed, that contracts with or functions as a managed care plan to provide health care services to enrollees.
(iv) The term includes managed care plans that require the enrollee to obtain a referral from any primary care provider in its network as a condition to receiving the highest level of benefits for specialty care.
(v) The term does not include ancillary service plans or an indemnity arrangement which is primarily fee for service.
Medical management--A function that includes any aspect of UR, quality assurance, case management and disease management and other activities for the purposes of determining, arranging, monitoring or providing effective and efficient health care services.
Member--An enrollee.
Outpatient services--Outpatient medical and surgical, emergency room and ancillary services including ambulatory surgery and all ancillary services pursuant to ambulatory surgery, outpatient laboratory, radiology and diagnostic procedures, emergency room care that does not result in an admission within 24 hours of the delivery of emergency room care and other outpatient services covered by the plan, including professional services.
Outpatient setting--A physician's office, outpatient facility, patient's home, ambulatory surgical facility, or a hospital when a patient is not admitted for inpatient services.
PCP--Primary care provider--A health care provider who, within the scope of the provider's practice, supervises, coordinates, prescribes or otherwise provides or proposes to provide health care services to an enrollee; initiates enrollee referral for specialist care; and maintains continuity of enrollee care.
POS plan--Point-of-service plan--A health care plan provided by a managed care plan that may require an enrollee to select and utilize a gatekeeper to obtain the highest level of benefits with the least amount of out-pocket expense for the enrollee and that may allow enrollees access to providers inside or outside the network without referral by a gatekeeper.
Preventive health care services--
(i) Services provided by the plan to provide for the prevention, early detection and minimization of the ill effects and causes of disease or disability.
(ii) The services include prenatal and well baby care, immunizations and periodic physical examinations.
Provider network--The health care providers designated by a plan to provide health care services to enrollees.
Secretary--The Secretary of Health of the Commonwealth.
Service area--The geographic area in which the plan has received approval to operate from the Department.
UR--Utilization review--
(i) A system of prospective, concurrent or retrospective review and decisionmaking, performed by a UR entity or managed care plan of the medical necessity and appropriateness of health care services prescribed, provided or proposed to be provided to an enrollee.
(ii) The term does not include any of the following:
(A) Requests for clarification of coverage, eligibility or health care service verification.
(B) A health care provider's internal quality assurance or UR process unless the review results in denial of payment for a health care service.
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