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Pennsylvania Code

Subchapter F. GENERAL


9.601.    Applicability.
9.602.    Definitions.
9.603.    Technical advisories.
9.604.    Plan reporting requirements.
9.605.    Department investigations.
9.606.    Penalties and sanctions.


   The provisions of this Subchapter F issued under Article XXI of The Insurance Company Law of 1921 (40 P. S. § §  991.2101—991.2193); HMO Act (40 P. S. § §  1551—1568); and section 630 of the PPO Act (40 P. S. §  764a), unless otherwise noted.


   The provisions of this Subchapter F adopted June 8, 2001, effective June 9, 2001, 31 Pa.B. 3043, unless otherwise noted.

Cross References

   This subchapter cited in 28 Pa. Code §  9.635 (relating to issuance of a certificate of authority to a foreign HMO).

§ 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.


     (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.


     (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.

§ 9.603. Technical advisories.

 The Department may issue technical advisories to assist plans in complying with the HMO Act, Article XXI and this chapter. The technical advisories do not have the force of law or regulation, but will provide guidance on the Department’s interpretation of, and how a plan may maintain compliance with, the HMO act, Article XXI and this chapter. Notice of the availability of a technical advisory will be published in the Pennsylvania Bulletin.

§ 9.604. Plan reporting requirements.

 (a)  Annual reports. A plan shall submit to the Department on or before April 30 of each year, a detailed report of its activities during the preceding calendar year. The plan shall submit the report in a format specified by the Department in advance of the reporting date, and shall include, at a minimum, the following information:

   (1)  Enrollment data by product line—for example, commercial, Medicare and Medicaid and by county.

   (2)  Utilization statistics containing the following minimum data:

     (i)   The number of days of inpatient hospitalization on a quarterly, year-to-date and annualized basis.

     (ii)   The average number of physician visits per enrollee on a quarterly, year-to-date and annualized basis.

   (3)  The number, type, and disposition of all complaints and grievances filed with the plan or subcontractors.

   (4)  A copy of the current enrollee literature, including subscription agreements, enrollee handbooks and any mass communications to enrollees concerning complaint and grievance rights and procedures.

   (5)  A copy of the plan’s current provider directory.

   (6)  A statement of the number of physicians leaving the plan and of the number of physicians joining the plan.

   (7)  A listing of all IDS arrangements and enrollment by each IDS.

   (8)  Copies of the currently utilized generic or standard form health care provider contracts including copies of any deviations from the standard contracts and reimbursement methodologies. Reimbursement information submitted to the Department under this paragraph may not be disclosed or produced for inspection or copying to a person other than the Secretary or the Secretary’s representatives, without the consent of the plan which provided the information, unless otherwise ordered by a court.

   (9)  A copy of the plan’s written description of its quality assurance program, a copy of the quality assurance work plan, and a copy of the quality assurance report submitted to the plan’s Board of Directors.

   (10)  A listing, including contacts, addresses and phone numbers, of all contracted CREs that perform UR on behalf of the plan or a contracted IDS.

 (b)  Quarterly reports. Four times per year, a plan shall submit to the Department two copies of a brief quarterly report summarizing data specified in subsection (a)(2) and (6) and enrollment, and complaint and grievance system data. Each quarterly report shall be filed with the Department within 45 days following the close of the preceding calendar quarter. The plan shall submit each quarterly report in a format specified by the Department for that quarterly report.

Cross References

   This section cited in 28 Pa. Code §  9.631 (relating to content of an application for an HMO certificate of authority).

§ 9.605. Department investigations.

 (a)  The Department may investigate plans as necessary to determine compliance with Act 68, the PPO Act, the HMO Act and this chapter

 (b)  Investigation may include onsite inspection of a plan’s facilities and records, and may include onsite inspection of the facilities and records of any IDS subcontractor.

 (c)  The Department or its agents will have free access to all books, records, papers and documents that relate to the business of the plan, other than financial business.

 (d)  The Department will have access to medical records of plan enrollees for the purpose of determining the quality of care, investigating complaints or grievances, enforcement, or other activities relating to ensuring compliance with Article XXI, this chapter or other laws of the Commonwealth.

 (e)  The Department may request submission by the plan of a special report detailing any aspect of its operations relating to the provision of health care services to enrollees, provider contracting or credentialing, operation of the enrollee complaint and grievance system, or quality assessment.

§ 9.606. Penalties and sanctions.

 (a)  For violations of Article XXI and this chapter, the Department may take one or more of the following actions:

   (1)  Impose a civil penalty of up to $5,000 per violation.

   (2)  Maintain an action in the name of the Commonwealth for an injunction to prohibit the activity.

   (3)  Issue an order temporarily prohibiting the plan from enrolling new members.

 (b)  For violations of the HMO Act and this chapter, the Department may suspend or revoke a certificate of authority or impose a penalty of not more than $1,000 for each unlawful act committed if the Department finds that one or more of the following conditions exist:

   (1)  The HMO is providing or arranging for inadequate or poor quality care, either directly, through contracted providers or through the operations of the HMO, thereby creating a threat to the health and safety of its enrollees.

   (2)  The HMO is unable to fulfill its contractual obligations to its enrollees.

   (3)  The HMO has substantially failed to comply with the HMO Act.

 (c)  Before the Department may act under subsection (b), the Department will provide the HMO with written notice specifying the nature of the alleged violation and fixing a time and place, at least 10 days thereafter, for a hearing of the matter to be held. Hearing procedures and appeals shall be conducted in accordance with 2 Pa.C.S. (relating to administrative law and procedure).

 (d)  For violations of the HMO Act, the PPO Act, Act 68 and this chapter, the Department may require a plan to develop and adhere to a plan of correction approved by the Department that the plan shall make available to enrollees upon written request. The Department will monitor compliance with the plan of correction. Failure to comply with the plan of correction may result in the Department’s taking action under subsection (a) or (b), as appropriate.

 (e)  The Department’s actions under subsection (a)(1) or (3) are subject to 2 Pa.C.S. Chapter 5, Subchapter A (relating to practice and procedure of Commonwealth agencies).

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