LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol. It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities. It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU). Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail to firstname.lastname@example.org. Please email email@example.com supplying both your name and e-mail address if you wish to be removed from or added to this list.
THEY MADE IT…
Additional insurance legislation has been signed into law by Governor Corbett.
- Senate Bill 1180 (Vance-R-Cumberland) strengthens the state system for prescription drug monitoring and gives health care providers electronic access to a patient’s prescription drug history. The bill was approved by Governor Tom Corbett on October 27 as Act 191 of 2014.
- Also approved by the Governor October 27 was Act 184 /House Bill 1846 (Quinn-R-Bucks), a Workers Compensation bill addressing the issue of some doctors possibly obtaining more WC monies than they are entitled to because of prescription coding. HB 1846 requires that physicians use the original manufacturer’s National Drug Code (NDC) number and not use a repackaged NDC number. Reimbursement for prescriptions would be limited to 110 percent of the average wholesale price of the drug. PA Compensation Rating Bureau would calculate the savings to the WC system from this law within 18 months after enactment.
COURT SETTLEMENT SEES MED MAL ASSESSMENT DROP
Health Care providers are already seeing the result of the settlement announced by Governor Corbett October 16 for doctors and hospitals suing against the legislative transfer of Medical Care Availability and Reduction of Errors Fund (MCARE) monies into the General Fund to help balance a Rendell Administration budget. The settlement means $139 million over 18 months to health care providers and a $61 million reduction in the 2015 MCARE assessment paid by doctors and hospitals to a middle tier of medical malpractice insurance operated by the state. The November 1, 2014 PA Bulletin published Insurance Department Notice 2014-13 specifying that the MCARE assessment for 2015 shall be 12% of the Joint Underwriting Association (JUA) premium. This compares with an assessment of 23% of the JUA rate in 2014. (JUA is the medical malpractice insurer of last resort.) Following is a link to the MCARE page on the Insurance Department’s web site that gives access to the 2015 MCARE Manual used to calculate the assessment. (Page 18) https://www.portal.state.pa.us/portal/server.pt/community/assessment_rating_information/12986/2015_assessment/1899389
On October 30, the Insurance Department published two examples of what this change means to health care providers. A neurosurgeon in Philadelphia who paid $36,447 in MCARE assessment in 2014 will pay $19,016 in 2015. Neurosurgeons in Allegheny or DauphinCounties who paid $20,273 in MCARE assessments in 2014 would see the assessment drop to $10,577 in 2015. A family physician would also see similar savings.
Location 2014 MCARE Assessment 2015
Philadelphia family physician $5,054 $2,637
Allegheny Co. family physician $2,881 $1,503
Dauphin Co. family physician $2,881 $1,503
LEGISLATIVE/PERSONAL NEWS ITEMS
- Condolences to Former Rep. Joe Battisto (D-Monroe)’s family. He passed away October 25. He served in the PA House from 1983 to 2000.
- PA State Senator Leanna Washington (D-Phila.) signed a plea agreement October 30 according to Harrisburg ONLINE. This agreement acknowledges that her staff was misused for political purposes. She will not serve jail time. Sen. Washington lost the May primary election but will not complete the last month of her term.
INSURANCE DEPARTMENT RECOVERS LIFE BENEFITS TO 11,000
On October 23, the Insurance Department stated that it had recouped over $174 million in life insurance claim payments to more than 11,000 Pennsylvanians. The Department took the lead nationally in negotiating with life insurance carriers to use the Social Security Administration’s Death Master File (DMF). Regulators asserted that some beneficiaries were unaware of a life insurance benefit because carriers did not do a diligent periodic review of the DMF to confirm a policyholder’s death and perform an adequate search for beneficiaries. It was further alleged that some carriers used the DMF to terminate annuity benefits but not to activate a life insurance payment. Carriers with whom multi-state agreements were settled include USAA, Genworth, Lincoln, AVIVA, New York Life, ING, MassMutual, TIAA-CREF, John Hancock, AIG, Nationwide, MetLife, and Prudential. (https://www.insurance.pa.gov/portal/server.pt/community/insurance_pa_gov/4679 )
The PA General Assembly began to take some interest in this issue before the end of the 2013-14 session. House Bill 1937 was introduced by Rep. Marguerite Quinn-(R-Bucks) to require all life insurance companies doing business in PA to use the Death Master File or “any other database or service that is at least as comprehensive for determining that an individual has reportedly died.”. HB 1937 was reported out of the House Insurance Committee September 24, 2014.
- The Independent Regulatory Review Commission (IRRC) meets November 6 to consider Labor & Industry Final Regulation #12-99, Special Rules of Administrative Practice and procedure of the Workers’ Compensation Appeal Board and Workers’ Compensation Judges. Details: www.irrc.state.pa.us On November 20, IRRC will consider Department of Banking & Securities Regulation #3-52 regarding Debt Management Services Continuing Education
- PA Health Cost Care Containment Council (PHC4) will meet in Harrisburg at 10:00 a.m. on November 6. Details: Renee Greenawalt 717/232-6787
- Company Applications to the Insurance Department include applications from Underwriters at Lloyd’s of London and Hannover Ruck SE of Hannover, Germany, for designation as certified reinsurers.
– Stock property insurances companies New Hampshire Insurance Company and Granite State Insurance Company, are both seeking to redomesticate from PA to Illinois.
JUDGE RULES ON HIGHMARK v. UPMC
On October 30, state judge Dan Pellegrini ruled that Highmark’s agreement with UPMC did not mandate the inclusion of UPMC physicians and hospitals in the Highmark Medicare Advantage Community Blue plan. The PA Insurance Department had maintained that the consent agreement reached June 27 between the two parties required that Highmark provide “vulnerable populations” such as seniors with in-network access to UPMC. Highmark’s position, one with which the judge agreed, was that Highmark was required to offer seniors in-network access to UPMC but was not prohibited in also offering a Medicare Advantage without that access.
MARYLAND ISSUES NEW REGS
The Maryland Insurance Administration (MIA) issued a number of new regulations in October. They include Subtitle 15 Unfair Trade Practices (31.15.08) Payment of Claims under Life and Annuity Contracts; Subtitle 04 (31.04.22) Title Insurers; Subtitle 03 Insurance Producers (31.03.02) Insurance Producers Continuing Education Requirements. Details: https://www.mdinsurance.state.md.us/sa/news-center/proposed-regulations.html