LEG REG REVIEW

2014, 12thIssue May 12, 2014

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 . Please email supplying both your name and e-mail address if you wish to be removed from or added to this list.

BLEAK BUDGET FORCAST

PA revenues remain sluggish. April which is normally a big month in collections proved disappointing. PA collected $3.4 billion in general revenue which was $328.3 million or 8.8% less than anticipated. YTD collections were $23.9 billion by April 30 or 1.7% below projections. This apparently does not take into account a recent court decision that reinstated PA’s share of Tobacco Settlement money. There are two outcomes: First, Governor Corbett is examining existing budgets to see where savings/cuts can be found so as to balance this year’s budget. Second, June is the month when legislators act on the Governor’s Budget request. Some areas where he proposed increases such as in education may be in doubt as the state faces a new fiscal year even gloomier than this one. Adding to the pain are warnings from those assessing Pennsylvania’s fiscal solvency that continued inaction on resolving the pension crisis means a credit downgrade for the Commonwealth.

HEALTH BILLS DOMINATE AGENDA

In addition to headline issues such as privatizing liquor stores, action was taken on several pieces of health legislation directly affecting health care but which may also have an indirect impact on insurance:

  • House Bill 2111 (Marshall-R-Beaver) requires health care practitioners to disseminate information regarding Down syndrome to expectant or new parents. It passed the House 159-41 on May 6. All no votes came from Democrats.
  • Also passing in the House (April 29) was House Resolution 735 (Cutler-R-Lancaster) directing the State Government Commission to establish an advisory committee to conduct a comprehensive study of physician shortages in PA and submit its report by April 29, 2015. The resolution says that 52% of physicians in PA were 50 or older in 2010 and that demands will increase from aging baby boomers and the newly insured from “changing health care landscapes”. Although the words ‘tort reform’ or medical malpractice premiums’ do not appear in the text, when the State Government Commission begins its work, those issues will surface.
  • Passing the Senate May 6 by a vote of 47-2 was Senate Bill 1180 (Vance-R-Cumberland) providing for prescription drug monitoring and utilizing electronic records showing a patient’s Rx history for health care providers and pharmacists. The goal is to reduce adverse outcomes based on insufficient knowledge. The Prescription Drug Monitoring Board in the Department of Health would manage the new Achieving Better Care by Monitoring All Prescriptions Program (ABC-MAP). The two no votes were cast by ideological opposites, liberal Senator Jim Ferlo (D-Allegheny) and Senator Mike Folmer (R-Lebanon) who tends libertarian.

CORBETT LAYS GROUNDWORK FOR HEALTHY PA IF HHS AGREES

Governor Corbett’s Healthy PA request to HHS to use the federally-facilitated exchange as an alternative to traditional Medicaid (meeting the Patient Protection Affordable Care Act (PPACA) goal of people up to 138% of the Federal Poverty Level being on Medicaid) has not yet received a yes or no from Washington. Nonetheless, on May 8, the Corbett Administration issued a request for application to PA insurers to see who would provide the insurance if Healthy PA was accepted. Per the timetable, a May 15 pre-bid conference will take place at the PA Child Welfare Resource Center in Cumberland County. The bids must be submitted to the PA Department of Public Welfare by August with an operational target of January 1, 2015.

DEMOCRATS COUNTER WITH MEDICAID PUSH

The latest Democratic activity regarding compliance with PPACA’s expanding traditional Medicaid eligibility came on May 7 from Rep. Pam DeLissio (D-Phila.) who will file a discharge resolution which would force legislative action on House Bill 897 (Frankel-D-Allegheny) which would accept Federal money to fund the Medicaid expansion. HB 897 is currently in the House Health Committee.

TWO AUTO INSURANCE BILLS MOVE

On April 28, two bills sponsored by Rep. Mike Tobash (R-Schuylkill) passed the House 194-0. House Bill 2135 and House Bill 2136 would allow for a seamless transition from auto insurance with one carrier to an affiliated insurer without having the original policy being cancelled first. Both were referred to the Senate Banking & Insurance Committee May 2. Following is a link to the sponsorship memo explaining the bills.

SENATE HEARING ON LIMITING CONSUMER CO-PAYS

A May 6 hearing convened by the Senate Banking & Insurance Committee focused on a controversial bill sponsored by Senator Charles MvIlhinney (R-Bucks) to limit copayments and coinsurance payments for chiropractic, occupational therapy and physical therapy services. Senate Bill 594 would limit those costs to the amounts of copayments or coinsurance charged by an insured’s primary care physician. Supporting the bill were the PA Chiropractic Association and the American Physical Therapy Association. Opposing were the Insurance Federation of PA, Blue Cross of Northeastern PA and the PA Chamber of Business & Industry. In opposing the bill, the Insurance Department issued written testimony which stated “The Department is concerned that SB 594 would create an unnecessary requirement for the calculation of cost-sharing mechanisms, potentially raising health insurance costs and stifling innovation. SB 594 would also single out particular specialties, creating an advantageous position for these specialties. Finally, SB 594 would task the PID (PA Insurance Department) with the creation of regulations, based on vague and subjective guidelines, without any enforcement authority. Given the agency’s concerns, the PID opposes SB 594.” The bill had previously been reported out by the committee April 9 but was re-referred to the Senate Banking & Insurance Committee April 29.

UPCOMING

  • On May 16, the Senate Democratic Policy Committee will hold a public hearing at the Allegheny County Courthouse on the UPMC/Highmark contract issue. Details: 787-4236
  • Long-Term Care Commission hearing in Lycoming County: May 30 from 9:00 a.m. to 12 noon at PA College of Technology, One College Avenue, Williamsport 17701. Those wishing to testify or present verbal comments must pre-register via or 717/425-5719. Comments are in five minute increments and presenters are asked to submit written comments as well. Written input will be accepted through June 27, 2014 to Long-Term Care Commission, c/o PA Dept. of Public Welfare, PO Box 8025, Harrisburg, PA 17105, Attention: OLTL Policy or by emailing a submission to the LTC Commission at .

REGULATORY UPDATE

  • Independent Regulatory Review Commission (IRRC) issued comments on Department of Labor & Industry proposed regulation 12-99 regarding Special Rules of Administrative Practice and Procedure before the Workers’ Compensation Appeal Board and Workers’ Compensation Judges Details:
  • IRRC approved an Insurance Department rule 11-252 Rules and Procedural Requirements for Insurance Holding Company System (amends 31 PA Code Chapter 25). This rule was published October 12, 2013 in the PA Bulletin.

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