LEG REG REVIEW 2012, 12th Issue April 16, 2012 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) or Manufacturers Association of South Central PA (MASCPA). Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/728-1164 or e-mail to [email protected]. Please email [email protected] supplying both your name and e-mail address if you wish to be removed from this list. GENERAL ASSEMBLY RECESSES UNTIL APRIL 30 The PA General Assembly has recessed until month’s end. In the meantime, April 24 is Primary Day. At stake are contests for US Senator, US Congress using the NEW district lines via reapportionment and PA Senators and Representatives who are running in their OLD districts due to a court ruling against the new reapportioned district lines. In some House districts there will be two elections. One is the primary to select candidates for the fall election. The second is for legislative districts where Representatives won other elections last fall, creating vacancies in the General Assembly. Those races will decide who holds the seats this year until the fall election decides who will take their seats in the 2013-14 session of the General Assembly. Some races of interest to the insurance community are: - Licensed insurance producer Rep. Mark Mustio (R-Allegheny) is running for the State Senate seat of retiring Senator John Pippy. - Licensed insurance producer Helen Bosley (Bucks County) is running in the Republican primary for the right to take on incumbent Representative Steven Santarsiero (D). - For US Congress, redistricting moved US Rep. Tim Holden’s district north to include Wilkes-Barre and Scranton where he has little political base. He is a licensed insurance producer who voted against passage of the Patient Protection Affordable Care Act (PPACA) and for tort reform. He is a sponsor of HR 1206 which would take agent commissions out of the Medical Loss Ratio equation. - Another congressional sponsor of HR 1206 who also voted against PPACA in US Rep. Jason Altmire (Allegheny County) who was redistricted into a new district where he has to fight US Rep. Mark Critz from Cambria County in the Democratic primary. APRIL 17 DATE OF HIGHMARK HEARING On April 17 the PA Insurance Department will convene a public hearing in Pittsburgh on the proposed change in control of Highmark and its Pennsylvania insurance subsidiaries as well as Highmark’s plans to affiliate with the West Penn Allegheny Health System. The hearing will be held from 9 a.m. to 5 p.m. on Tuesday, April 17, at the Westin Hotel at the Convention Center, Allegheny Ballrooms, 1000 Penn Ave, Pittsburgh. Public comments will continue with an evening session, slated to begin at 7 p.m. Individuals who wish to offer comments at the day or evening sessions are encouraged to pre-register. The filing, public comments and hearing registration materials are available on the Department’s website. Visit www.insurance.pa.gov and click on Highmark/West Penn Hearing. CALENDAR ITEMS Pittsburgh I Day takes place on April 26. Details: http://www.insclubpgh.com/ Central PA I Day takes place May 2. Details: http://www.centralpaiday.com/ For Marylanders, April 24 is the date set for the 2012 Maryland I Day in Towson, MD. Sponsored by the Independent insurance Agents of Maryland, Maryland Chapter CPCU and the Insurance Women of Baltimore, details are available from Katie Caple 410/427-6430 [email protected] 1 ELECTRONIC MEDICAL RECORDS BILL ADVANCES Before the legislature recessed, the Senate Communications & Technology Committee moved Senate Bill 8 (Folmer-R-Lebanon) which establishes the PA eHealth Partnership Authority, an independent agency responsible for developing the state’s electronic medical information database. This resource would be used by health care providers to examine results of recent tests to reduce the amount of repetitive diagnostic tests. The idea is not new and Pennsylvania under former Governor Rendell secured ARRA (Stimulus package) monies to begin the process. The real test will be how to pay for it and how to encourage doctors to actually use the resource. One provision in the bill appears to include a hold harmless clause that shields doctors from medical malpractice accusations if they relied on others’ test results. ADJUSTER BILL SIGNED INTO LAW House Bill 424 (Godshall-R-Montgomery) was signed into law as Act 21 of 2012 by Governor Corbett on April 3. This legislation makes a number of changes, some of which follow: - License will now be two years for a public adjusters’s license instead of one - Notice to insured if there is a conflict of direct financial interest with another party such as construction, motor vehicle repair shop, etc .involved in an aspect of the claim (besides the compensation stated in the contract with the insured) - Reduces the required bond from $40,000 to $20,000 - Department disapproval of a contract form if it is deemed to be “unreasonable, contrary to the interests of the public, or misleading or unfair to the insured” - Contract revisions reducing from five days to three the period in which an insured has the right to rescind the contract; explanation of fees; insured to receive a copy of the estimate or report of losses and any supporting documentation, if requested; that the public adjuster may not assert him/herself to be a representative or employee of the insurer - Grounds for revocation of license now includes “misleading conduct”; non-payment of state taxes or child support, committing a misdemeanor involving misuse or theft of money or property belonging to another person; soliciting business during a disaster (“during progress of a loss-producing occurrence”); failing to notify the insurer within two days that the public adjuster has entered into a contract with the insured, etc. TWO BILLS APPROVED BY SENATE COMMITTEE The Senate Banking & Insurance Committee moved two bills before the recess. They were Senate Bill 1144 (Ward-R-Westmoreland) regarding dental insurance fee schedules and Senate Bill 1464 (D. White-R-Indiana) updating the Holding Company Law with NAIC and Insurance Department changes such as acquisition and control and persons wishing to divest controlling interest in an insurer. The term enterprise risk is introduced as one of the financial criteria examined by the Department. It means an activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, would likely have a material adverse effect on the financial condition or liquidity of an insurer or its insurance holding company system. REGULATORY UPDATE The Department of Labor and Industry, Bureau of Workers' Compensation gave notice of the range of fees charged by Utilization Review Organizations and Peer Review Organizations for services performed under the Workers' Compensation Act during 2011. The Department further provided notice of the average fee charged by each Utilization Review Organization and Peer Review Organization during 2011. Details: www.pabulletin.com POLITICAL NOTE: PoliticsPA reported on a Washington Post article that identified two Pennsylvania fiercely contested congressional primary contests where incumbents are threatened. They are centrist Democratic Rep. Tim Holden versus liberal attorney Matt Cartwright and centrist Republican Tim Murphy versus former Senate staffer and Tea Party favorite Evan Feinberg 2.