2022 -- H 8354

========

LC006140

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

____________

A N   A C T

RELATING TO INSURANCE -- PSYCHIATRY RESOURCE NETWORK FUNDING ACT

     Introduced By: Representatives Hull, Kazarian, and J Lombardi

     Date Introduced: June 17, 2022

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by

adding thereto the following chapter:

CHAPTER 82

PSYCHIATRY RESOURCE NETWORK FUNDING ACT

     27-82-1. Short title.

     This chapter shall be known and may be cited as the "Psychiatry Resource Network

Funding Act."

     27-82-2. Definitions.

     As used in this chapter:

     (1) "Adult" means:

     (i) All residents who are over age eighteen (18) and under age sixty-five (65); and

     (ii) All other persons over age eighteen (18) and under age sixty-five (65) who receive

health care services.

     (2) "Assessed entity" means any health carrier or other entity that contracts or offers to

insure, provide, deliver, arrange, pay for, administer any claims for or reimburse or facilitate the

sharing of any of the costs of health care services for any person residing in or receiving health care

services in the state, including, without limitation, the following:

     (i) Any writer of individual, group, or stop loss insurance;

     (ii) Health maintenance organizations;

     (iii) Third-party administrator;

     (iv) Preferred provider agreement;

     (v) Fraternal benefit society;

     (vi) Administrative services organization and any other organization managing claims on

behalf of a self-insured entity;

     (vii) Any self-insurer or other entity that provides an employee or group benefit plan and

does not utilize an external claims managing service;

     (viii) Any governmental entity that provides an employee or group benefit plan and does

not utilize external claims management services; or

     (viv) Any entity, administrator or sponsor of any health care costs sharing program.

     (3) "Assessment" means the association member liability with respect to costs determined

in accordance with this chapter.

     (4) "Association" means the health care information line association created by this

chapter.

     (5) "Association director" means the director of a health care information line association.

     (6) "Board" means the board of directors of the association.

     (7) "Child" or "children" means:

     (i) All residents who are under age nineteen (19); and

     (ii) All other persons under age nineteen (19) who receive health care services in the state.

     (8) "Covered lives" means all individuals who are:

     (i) Covered under an individual health insurance policy issued or delivered in the state;

     (ii) Covered under a group health insurance policy that is issued or delivered in the state;

     (iii) Covered under a group health insurance policy evidenced by a certificate of insurance

that is issued or delivered to an individual who resides in the state;

     (iv) Protected, in part, by a group excess loss insurance policy where the policy or

certificate of coverage has been issued or delivered in the state; or

     (v) Protected, in part, by an employee benefit plan of a self-insured entity or a government

plan for any employer or government entity which:

     (A) Has an office or other worksite located in the state; or

     (B) Has fifty (50) or more employees who are participants or beneficiaries of a health cost

sharing program.

     (9) "Director" means the director of the department of health.

     (10) "Health carrier" or "carrier" means an entity subject to the insurance laws and rules of

the state, or subject to the jurisdiction of the commissioner of insurance, that contracts or offers to

LC006140 - Page 2 of 9

contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care

services, including an insurance company, a health maintenance organization, a health service

corporation, or any other entity providing a plan of health insurance, health benefits, or health

services.

     (11) "Health cost sharing program" means any cost sharing or similar program which seeks

to share the costs of health care services and which in the preceding twelve (12) months either has:

     (i) Coordinated payment for or reimbursed over ten thousand dollars ($10,000) of costs for

health services delivered in this state; or

     (ii) Communicated by mail or electronic media to residents of this state concerning their

potential participation.

     (12) "Insurance commissioner" means the health insurance commissioner of the

department of business regulation.

     (13) "Psychiatry resource network" or "PRN" means any information lines, referral service,

including PediPRN and MomsPRN which is available to providers in the state, and which is funded

pursuant to the association's plan of operation.

     (14) "Provider" means a person licensed by the state to provide health care services or a

partnership or corporation or other entity made up of those persons.

     (15) "Senior" means:

     (i) All residents who are over age sixty-four (64); and

     (ii) All other persons over age sixty-four (64) who receive health care services in Rhode

Island.

     (16) "State" means the State of Rhode Island.

     27-82-3. Association and PRN fund created.

     (a) There is hereby created the Rhode Island psychiatry resource network or "RIPRN" for

the primary purpose of equitably determining and collecting assessments for the cost of PRNs in

the state which are not covered by other federal or state funding.

     (b) The association shall be comprised of all assessed entities, as defined in this chapter.

     (c) A PRN fund shall be maintained in the custody of the general treasurer. Receipts from

public and private sources for funding PRNs may be deposited into the account in the manner and

method specified in the association's plan of operation. Expenditures from the account shall be used

exclusively for the costs of operating any PRNs funded by the association, at no cost to providers.

Only the director of health, or designee may authorize expenditures from the account.

     27-82-4. Powers and duties.

     (a) The association shall be a not-for-profit, voluntary corporation and shall possess all

LC006140 - Page 3 of 9

general powers as derive from that status under state law and such additional powers and duties as

are specified in this section.

     (b) The directors' terms and method of appointments shall be specified in the plan of

operation. The board of directors shall include:

     (1) The director of the department of health, or designee;

     (2) The health insurance commissioner, or designee;

     (3) Three (3) health carrier representatives;

     (4) Two (2) provider representatives, one of whom serves primarily children and one of

whom serves primarily adults;

     (5) One representative from a third-party administrator which is not a health carrier; and

     (6) May include up to three (3) additional members as specified in the association's plan of

operation.

     (c) Any director may designate a personal representative to act for the director at a meeting

or on a committee. A personal representative shall notify the meeting's presiding officer of such

designation. A director may revoke any such designation at any time.

     (d) The board shall have the following duties:

     (1) Prepare and adopt articles of association and bylaws;

     (2) Prepare and adopt a plan of operation;

     (3) Submit the plan of operation to the director of health for approval following opportunity

for comment by the health insurance commissioner;

     (4) Conduct all activities in accordance with the approved plan of operation;

     (5) Undertake reasonable steps to minimize:

     (i) Duplicate counting of child or adult covered lives; or

     (ii) Duplicate assessments;

     (6) Pay the association's operating costs;

     (7) Remit collected assessments, after costs and reserves, to the general treasurer for credit

to the PRN fund;

     (8) Submit to the director of health, no later than one hundred twenty (120) days after the

close of the association's fiscal year, a financial report in a form acceptable to the director; and

     (9) Submit a periodic noncompliance report to the director and the health insurance

commissioner listing any assessed entities that failed to either:

     (i) Remit assessments in accordance with the plan of operation; or

     (ii) After notice from the association, comply with any reporting or auditing requirement

of this chapter or the plan of operation.

LC006140 - Page 4 of 9

     (e) The board shall have the following powers:

     (1) Enter into contracts, including one or more contracts for executive director and

administrative services to administer the association.

     (2) Sue or be sued, including taking any legal action for the recovery of any assessment or

interest or other cost reimbursement due to the association. Reasonable legal fees and costs for any

amounts determined to be due to the association shall also be awarded to the association.

     (3) Appoint, from among its directors, committees to provide technical assistance and to

supplement those committees with non-board members.

     (4) Engage professionals including auditors, attorneys, and independent consultants.

     (5) Borrow and repay working capital, reserve, or other funds and grant security interests

in assets and future assessments as may be helpful or necessary for such purposes.

     (6) Maintain one or more bank accounts for collection of assessments, refund

overpayments, and pay the association's costs of operation.

     (7) Invest reserves as the board determines to be appropriate from time to time.

     (8) Provide member and public information about its operations.

     (9) Enter into one or more agreements with other state or federal authorities, including

similar funding associations in other states, to ensure equitable allocation of funding responsibility

with respect to individuals who may reside in one state, but receive health care services in another.

Any amounts owed under any such agreements shall be included in the estimated costs for

assessment rate setting purposes.

     (10) Enter into one or more agreements with assessed entities for one or more alternative

payment methodologies for the respective assessed entity's covered lives.

     (11) Assist the director in qualification for grant and other resources from the federal

government and adjust its procedures as may be needed from time to time in order that appropriate

adjustments are made to any assessment liability with respect to any person who is eligible for

federally funded services.

     (12) Perform any other functions the board determines to be helpful or necessary to carry

out the plan of operation or the purposes of this chapter.

     27-82-5. Assessments.

     (a) Assessment rates shall be determined as follows:

     (1) The director shall provide estimated PRN operation costs, not covered by any other

state or federal funds, for the succeeding year no later than one hundred twenty (120) days prior to

the commencement of each year and shall update such estimate at such times as reasonably may be

requested by the association.

LC006140 - Page 5 of 9

     (2) Add estimates to cover the association's operating costs, including any interest payable,

for the upcoming year.

     (3) Add a reserve of up to ten percent (10%) of the sum of subsections (a)(1) and (a)(2) of

this section for unanticipated costs.

     (4) Add a working capital reserve in such amount as may be reasonably determined by the

board from time to time.

     (5) Subtract the amount of any unexpended fund balance, including any net investment

income earned, as of the end of the preceding year.

     (6) Calculate a per child covered life per month and per adult covered life per month and a

per senior covered life per month amount to be self-reported and paid by all assessed entities by

dividing the annual amount determined in accordance with subsections (a)(1) through (a)(5) of this

section by the number of covered lives in each age band, respectively, projected to be covered by

the assessed entities during the succeeding program year, divided by twelve (12). At the option of

the association, the assessment may, instead, be calculated as a single per covered life assessment,

not segregated for child and adult and senior covered lives.

     (b) Within forty-five (45) days of the close of each calendar quarter, an assessed entity

shall pay a quarterly assessment equal to assessment rates multiplied by the applicable number of

covered life months covered by the assessed entity in the preceding calendar quarter. Unless

otherwise determined by the board, the assessed entity which would have been responsible for

payment or coordination of payment or reimbursement of any provider's primary care provider

health care services for any individual shall be the entity responsible for reporting the respective

child covered lives and for payment of the corresponding assessment.

     (c) At any time after one full year of operation under subsections (a) and (b) of this section,

the association, upon two-thirds (2/3) vote of its board and the approval of the director may:

     (1) Make changes to the assessment collection mechanism outlined in subsections (a) and

(b); and

     (2) Add any health care information line or other services for which the board determines

funding pursuant to this health care funding act is desirable to those services funded by this chapter.

Any such changes shall be reflected in an updated plan of operation available to the public.

     (d) If an assessed entity has not paid in accordance with this section, interest accrues at one

percent (1%) per month, compounded monthly on or after the due date.

     (e) The board may determine an interim assessment for new programs covered or to cover

any unanticipated funding shortfall. The board shall calculate a supplemental interim assessment

using the methodology for regular assessments, but payable over the remaining fiscal year, and

LC006140 - Page 6 of 9

such interim assessment shall be payable together with the regular assessment commencing the

calendar quarter that begins no less than thirty (30) days following the establishment of the interim

assessment. The board may not impose more than one interim assessment per year, except in the

case of a public health emergency declared in accordance with state or federal law.

     (f) For purposes of rate setting, medical loss ratio calculations, and reimbursement by plan

sponsors, all association assessments are considered medical benefit costs and not regulatory or

administrative costs.

     (g) In the event of any insolvency or similar proceedings affecting any payer, assessments

shall be included in the highest priority of obligations to be paid by or on behalf of such payer.

     (h) Annual accounting. The general treasurer shall supply funds as are needed for PRN

operations throughout the state's fiscal year. No later than forty-five (45) days following the close

of the state's fiscal year, the treasurer shall provide an accounting of PRN operating costs not

covered by any other state or federal program and advise the association of the final amount needed

to cover the prior fiscal year. The association shall reimburse such amount within forty-five (45)

days of receiving the accounting; provided, however, that with respect to all or any part of any

amount due which exceeds one hundred five percent (105%) of the amount which had been

projected by the director to be needed for such fiscal year, the association may defer such payment

and the treasurer shall include such deferral in the subsequent year's accounting. In the event of

such deferral, any such remaining unreimbursed amount shall be included in the assessment

calculation by the association for the funds to be raised by the association in the subsequent year.

     (i) If the association discontinues operation for any reason, any unexpended assessments,

including unexpended funds from prior assessments in the PRN fund, after the association's wind

down expenses, shall be refunded to payees in proportion to the respective assessment payments

by payees over the most recent eight (8) quarters prior to discontinuation of association operations.

     27-82-6. Reports and audits.

     (a) Each assessed entity is required to report its respective numbers of covered lives in a

timely fashion as prescribed in this chapter and respond to any audit requests by the association

related to covered lives or assessments due to the association. Upon failure of any assessed entity

to respond to an audit request within ten (10) days of the receipt of notification of said audit request

by the association, the assessed entity shall be responsible for prompt payment of the fees of any

outside auditor engaged by the association to determine such information and shall make all books

and records requested by said auditors available for inspection and copying at such location within

the state as may be specified by such auditor.

     (b) Failure to cure non-compliance with any reporting, auditing, or assessment obligation

LC006140 - Page 7 of 9

to the association within thirty (30) days from the postmarked date of written notice of

noncompliance shall subject the assessed entity to all the fines and penalties, including suspension

or loss of license, allowable under any provision of any other state statute. Any monetary fine or

penalty shall be remitted to the PRN fund and, thereby, reduce future obligations of the association

for PRN funding. The assessed entity also shall pay for reasonable attorneys' fees and any other

costs of enforcement under this section.

     27-82-7. Tax exempt status.

     The association is expressly granted exemption from all taxes levied either by the state or

any governmental entity located therein.

     27-82-8. Severability.

     If any provision of this chapter or the application thereof to any person or circumstance is

held invalid, the invalidity does not affect other provisions or applications of the chapter which can

be given effect without the invalid provision or application, and to this end the provisions of this

chapter are severable.

     27-82-9. Rulemaking.

     The director and the health insurance commissioner may adopt rules and regulations to

carry out the purposes of this chapter.

     27-82-10. Administrative allowance to department of health.

     Within forty-five (45) days following the close of each calendar quarter, the association

shall transfer from assessments raised a sum equal to five percent (5%) of the costs funded by the

association to the department of health's account in recognition of the support from the department

and its staff in enabling association members to meet their obligations for funding health care

services at lower cost.

     27-82-11. Transitional matters.

     To generate sufficient start-up funding, the association may accept prepayment from

member assessed entities, subject to offset of future amounts otherwise owing or other repayment

method as determined by the board.

     SECTION 2. This act shall take effect on June 1, 2023.

========

LC006140

========

LC006140 - Page 8 of 9

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- PSYCHIATRY RESOURCE NETWORK FUNDING ACT

***

     This act would create the Rhode Island psychiatry resource network for the primary

purpose of equitably determining and collecting assessments for the cost of psychiatry resource

networks in the state which are not covered by other federal or state funding. Assessed entities

would include HMO's, governmental entities providing group benefits, third-party administrators,

fraternal benefit societies, administrative service organizations for self insured, self insured

providing group benefits and health care cost sharing programs.

     This act would take effect on June 1, 2023.

========

LC006140

========

LC006140 - Page 9 of 9