Section 1416 - Parity in insurance coverage for state-owned psychiatric hospitals(a) No insurer providing inpatient psychiatric care coverage to individuals covered by that insurer's plan shall deny payment to a State-owned psychiatric hospital for medically necessary services provided to that individual solely on the basis that the hospital is a government-owned facility, has no signed provider agreement with the insurer, or does not participate in the insurer's network.(b) The provision of psychiatric services at a State-owned psychiatric hospital shall be an assignment by operation of law to the hospital of the individual's right to recover for such services from that individual's insurer. The department may sue for and recover any amounts due from that individual's insurer.(c) In determining the medical necessity of any inpatient psychiatric stay at a State-owned psychiatric hospital, it shall be rebuttably presumed that the patient could not be treated in an alternative setting if either of the following applies: (1) The stay was required by court order.(2) The patient was transferred to the State-owned psychiatric hospital from an acute psychiatric care facility or from an acute psychiatric care unit of a general hospital, because the patient was determined medically inappropriate for discharge.(d) State-owned psychiatric hospitals may enter into provider agreements with insurers and may accept payments under such provider agreements as payment in full, excluding the patient's liability for unpaid deductible and coinsurance amounts. In the absence of a provider agreement, the insurer shall make payment for a hospital stay at its usual rate of payment to contracted psychiatric hospital providers or, in the absence of such a rate, the rate that the medical assistance program would pay for such care.(e) The department may administratively impose a penalty of up to one thousand dollars ($1,000) per violation against any insurer that fails to comply with the requirements of this section.(f) For the purposes of this section, the term "insurer" includes:(1) A stock insurance company incorporated for any of the purposes set forth in section 202(c) of the act of May 17, 1921 (P.L. 682, No. 284), known as "The Insurance Company Law of 1921."(2) A mutual insurance company incorporated for any of the purposes set forth in section 202(d) of "The Insurance Company Law of 1921."(3) A professional health services plan corporation as defined in 40 Pa.C.S. Ch. 63 (relating to professional health services plan corporations).(4) A hospital plan corporation as defined in 40 Pa.C.S. Ch. 61 (relating to hospital plan corporations).(5) A fraternal benefit society as defined in 40 Pa.C.S. Ch. 63. (6) A health maintenance organization as defined in the act of December 29, 1972 (P.L. 1701, No. 364), known as the "Health Maintenance Organization Act."(7) Any other person who sells or issues contracts or certificates of insurance.(8) Any person, including an employer or third-party administrator, providing or administering employe group health care coverage, to the maximum extent permitted by Federal law.1967, June 13, P.L. 31, No. 21, art. 14, § 1416, added 2005, July 7, P.L. 177, No. 42, § 9, imd. effective.