Bill to Nix MCO Self-Referrals Launched in Pennsylvania

HME providers and stakeholders in the state are encouraged to contact their State Representatives in support of H.B. 1726.

• By David Kopf
• Jul 22, 2021

Pennsylvania State Rep. Tommy Sankey (R) has just introduced a bill into the state’s House of Representatives that would prevent managed care organizations (MCOs) from self-referrals.

The issue arose after Sankey noted in a June 9 memo that an insurer had entered into an arrangement with an HME provider to manage all of its intake and referral requests for HME for all its Medicare, Medicaid and commercial plans.

“This model establishes the ability for the chosen provider to ‘self-refer,’ meaning that the provider may choose to distribute equipment/supplies directly to the patients, or the company may forward the referral request to another in-network provider,” he noted. “This model creates a platform in which the chosen Home Medical Equipment company is a direct competitor with other HME companies in the insurer’s network. Obviously, this gives one company a distinctly unfair advantage over other providers in the network.”

The legislation, H.B. 1726, would amend the state’s Human Services Code to block the self-referrals, with the salient legislative language reading, “Notwithstanding any other provision of law, a managed care plan … may not refer or enter into a subcontract arrangement to provide services defined and specified in the managed care plan contracts with an entity where the entity or managed care plan may self-refer for durable medical equipment and supply services.”

The legislation comes after the Pennsylvania Association of Medical Suppliers and the American Association for Homecare worked to build support for the legislation.

AAHomecare encouraged Pennsylvania HME suppliers and stakeholders to contact their State Representatives in support of the measure and can quickly send a message to their legislator via an online Action Center.