2021 -- S 0984

========

LC003089

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

____________

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE HEALTH SPENDING

TRANSPARENCY AND CONTAINMENT ACT

     Introduced By: Senator Joshua Miller

     Date Introduced: June 27, 2021

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 7.5

THE HEALTH SPENDING TRANSPARENCY AND CONTAINMENT ACT

     42-7.5-1. Short title.

     This chapter shall be known and may be cited as "The Health Spending Transparency and

Containment Act."

     42-7.5-2. Background and Purposes.

     (a) WHEREAS, in August of 2018, the Cost Trend Steering Committee, composed of

stakeholders including business and consumer advocates and health industry leaders, was created

to advise the RI health care cost trend project in partnership with the Office of the Health Insurance

Commissioner and the Executive Office on Health and Human Services.

     (b) WHEREAS, the vision of the cost trend steering committee is to provide every Rhode

Islander with access to high-quality, affordable healthcare through greater transparency of

healthcare performance and increased accountability by key stakeholders to ensure healthcare

spending does not increase at a rate that significantly outpaces the projected state domestic product.

     (c) WHEREAS, the goal of the cost trend work is to use actionable data insights, analytic

tools, State authority, and stakeholder engagement to drive meaningful changes in healthcare

spending in Rhode Island.

     (d) WHEREAS, since August 2018, Rhode Island has: (1) convened a diverse group of

stakeholders to consider the establishment of a cost growth target; (2) achieved unanimous

consensus on the establishment of such a target; and (3) issued an executive order to formalize the

cost target.

     (e) WHEREAS, the cost trend steering committee also convened national experts with RI

government officials, advocates, business leaders, and healthcare leaders to share best practices on

claims-based analyses, leading to the development of a strategy to track overall healthcare

spending, report at several levels, and produce information that will inform and enhance provider

decision making.

     (f) WHEREAS, the values that guide Rhode Island's cost trend efforts include

commitments to (1) broad based stakeholder engagement that ensures consensus and support, (2)

transparency and actionability of data and reports, and (3) collaboration between experts in state

government, the private sector, and academia that results in key decision makers using data in

smarter ways to reduce costs while ensuring high quality care.

     (g) WHEREAS, in the final year of Peterson Center RI health care cost trend project

funding (ending August of 2021), the steering committee has committed to work on sustainability

planning to codify the cost trend analytics and convenings in the annual practices of the state. This

will require reporting in early 2021 on the state's performance against the cost growth target,

demonstrating that healthcare cost analytics can catalyze policy and behavior change, and

coordinating the cost trend work with the other on-going health reform and data use work in Rhode

Island.

     (h) WHEREAS, the mission of the Executive Office of Health and Human Services is to

assure access to high quality and cost-effective services that foster the health, safety, and

independence of all Rhode Islanders. The complementary responsibility of the RI Office of the

Health Insurance Commissioner includes addressing the affordability of healthcare and viewing the

healthcare system as a whole, combining consumer protection and commercial insurer regulation

with system reform policy-making.

     42-7.5-3. Definitions.

     The following words and phrases as used in this chapter shall have the following meaning:

     (1)(i) "Contribution enrollee" means an individual residing in this state, with respect to

whom an insurer administers, provides, pays for, insures, or covers healthcare services, unless

excepted by this section.

     (ii) "Contribution enrollee" shall not include an individual whose healthcare services are

LC003089 - Page 2 of 7

paid or reimbursed by Part A or Part B of the Medicare program, a Medicare supplemental policy

as defined in section 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1395ss(g)(1), or Medicare

managed care policy, the federal employees' health benefit program, the Veterans' healthcare

program, the Indian health service program, or any local governmental corporation, district, or

agency providing health benefits coverage on a self-insured basis.

     (2) "Healthcare services funding contribution" means per capita amount each contributing

insurer must contribute to support the health spending transparency and containment program

funded by the method established under this section, with respect to each contribution enrollee.

     (3)(i) "Insurer" means all persons offering, administering, and/or insuring healthcare

services, including, but not limited to:

     (A) Policies of accident and sickness insurance, as defined by chapter 18 of title 27;

     (B) Nonprofit hospital or medical-service plans, as defined by chapters 19 and 20 of title

27;

     (C) Any person whose primary function is to provide diagnostic, therapeutic, or preventive

services to a defined population on the basis of a periodic premium;

     (D) All domestic, foreign, or alien insurance companies, mutual associations, and

organizations;

     (E) Health maintenance organizations, as defined by chapter 41 of title 27;

     (F) All persons providing health benefits coverage on a self-insurance basis;

     (G) All third-party administrators described in chapter 20.7 of title 27; and

     (H) All persons providing health benefit coverage under Title XIX of the Social Security

Act (Medicaid) as a Medicaid managed care organization offering managed Medicaid.

     (ii) "Insurer" shall not include any nonprofit dental service corporation as defined in § 27-

20.1-2, nor any insurer offering only those coverages described in § 42-7.5-8.

     (4) "Person" means any individual, corporation, company, association, partnership, limited

liability company, firm, state governmental corporations, districts, and agencies, joint stock

associations, trusts, and the legal successor thereof.

     (5) "Secretary" means the secretary of health and human services.

     42-7.5-4. Imposition of health spending transparency and containment funding

contribution.

     (a) Each insurer is required to pay the health spending transparency and containment

funding contribution for each contribution enrollee of the insurer as of December 31 of the

proceeding calendar year, at the rate set forth in this section.

     Within 7 days of passage of this act, the secretary shall set the health spending transparency

LC003089 - Page 3 of 7

and containment funding contribution each fiscal year in an amount not to exceed one dollar ($1)

per contribution enrollee per year of all insurers. The funding contribution shall be established

based upon the anticipated spending necessary to administer the program as set forth in section 42-

7.5-10. Any amount collected in excess of the actual amount spent for the program pursuant to

section 42-7.5-10 shall be used to reduce the funding contribution required for the following

assessment period.

     (2) The assessment set forth herein shall be in addition to any other fees or assessments

upon the insurer allowable by law.

     (b) The contribution shall be paid by the insurer; provided, however, a person providing

health benefits coverage on a self-insurance basis that uses the services of a third-party

administrator shall not be required to make a contribution for a contribution enrollee where the

contribution on that enrollee has been or will be made by the third-party administrator.

     42-7.5-5. Returns and payment.

     (a) Every insurer required to make a contribution shall, on or before the first day of

September of each year, beginning September of 2021, make a return to the secretary together with

payment of the annual health spending transparency and containment funding contribution.

     (b) All returns shall be signed by the insurer required to make the contribution, or by its

authorized representative, subject to the pains and penalties of perjury.

     (c) If a return shows an overpayment of the contribution due, the secretary shall refund or

credit the overpayment to the insurer required to make the contribution.

     42-7.5-6. Method of payment and deposit of contribution.

     (a) The payments required by this chapter may be made by electronic transfer of monies to

the general treasurer.

     (b) The general treasurer shall take all steps necessary to facilitate the transfer of monies

to the health spending transparency and containment funding account established in § 42-7.5-9 in

the amount described in § 42-7.5-4.

     (c) The general treasurer shall provide the secretary with a record of any monies transferred

and deposited.

     42-7.5-7. Rules and regulations.

     The secretary is authorized to make and promulgate rules, regulations, and procedures not

inconsistent with state law and fiscal procedures as he or she deems necessary for the proper

administration of this chapter.

     42-7.5-8. Excluded coverage from the health spending transparency and containment

funding act.

LC003089 - Page 4 of 7

     (a) In addition to any exclusion and exemption contained elsewhere in this chapter, this

chapter shall not apply to insurance coverage providing benefits for, nor shall an individual be

deemed a contribution enrollee solely by virtue of receiving benefits for the following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified disease indemnity;

     (8) Sickness or bodily injury or death by accident or both; or

     (9) Other limited benefit policies.

     42-7.5-9. Health Spending Transparency and Containment Account.

     (a) There is created a restricted receipt account to be known as the "health spending

transparency and containment account." All money in the account shall be utilized by the Executive

Office of Health and Human Services, with the advice of and in coordination with the Office of the

Health Insurance Commissioner, to effectuate the program described in § 42-7.5-10.

     (b) All money received pursuant to this section shall be deposited in the health spending

transparency and containment account. The general treasurer is authorized and directed to draw his

or her orders on the account upon receipt of properly authenticated vouchers from the Executive

Office of Health and Human Services.

     (c) The health spending transparency and containment account shall be exempt from the

indirect cost recovery provisions of § 35-4-27.

     42-7.5-10. Health Spending Transparency and Containment Program.

     (a) The health spending transparency and containment program ("Program") is hereby

created to utilize health care claims data to help reduce health care costs.

      (b) The Program, based on the input of the cost trend steering committee, shall:

     (1) Maintain an annual health care cost growth target that will be used as a voluntary

benchmark to measure Rhode Island health care spending performance relative to the target, which

performance shall be publicly reported annually.

     (2) Use data to determine what factors are causing increased health spending in the state,

and to create actionable analysis to drive changes in practice and policy and develop cost reduction

strategies.

     (c) Annual reports shall be made public and recommendations shall be issued to the

LC003089 - Page 5 of 7

Governor and the General Assembly. Said annual reports shall be presented at a public meeting to

obtain input and comment prior to submission to the Governor and General Assembly.

     42-7.5-11. Sunset.

     The provision of this chapter shall sunset on July 1, 2026.

     SECTION 2. This act shall take effect upon passage.

========

LC003089

========

LC003089 - Page 6 of 7

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE HEALTH SPENDING

TRANSPARENCY AND CONTAINMENT ACT

***

     This act would impose a funding contribution for each enrollee of an insurer to be

determined by the secretary of health and human services not to exceed one dollar ($1.00) to the

health spending transparency and containment program established to utilize health care claims

data to help reduce health care costs. The program would provide annual reports to the public and

recommendations to the governor and general assembly.

     This act would take effect upon passage and the provisions of this act would sunset on July

1, 2026.

========

LC003089

========

LC003089 - Page 7 of 7