2022 -- S 2994 | |
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LC006093 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2022 | |
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A N A C T | |
RELATING TO STATE AFFAIRS AND GOVERNMENT | |
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Introduced By: Senators Pearson, and DiPalma | |
Date Introduced: June 03, 2022 | |
Referred To: Senate Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND |
2 | GOVERNMENT" is hereby amended by adding thereto the following chapters: |
3 | CHAPTER 7.5 |
4 | THE HEALTH SPENDING ACCOUNTABILITY AND TRANSPARENCY ACT |
5 | 42-7.5-1. Short title. |
6 | This chapter shall be known and may be cited as “The Health Spending Accountability and |
7 | Transparency Act.” |
8 | 42-7.5-2. Purpose. |
9 | (a) The purpose of the health spending accountability and transparency act is to promote |
10 | accountability for health care spending by health insurers and health care providers. |
11 | (b) To ensure accountability for health care spending, it is necessary for agencies of the |
12 | executive branch, health insurers, health care providers, and other interested parties to: |
13 | (1) Analyze health care spending data to identify the drivers of health care spending; |
14 | (2) Measure the specific performance of health care entities on measures of spending, |
15 | efficiency, and quality; |
16 | (3) Adopt a health care cost growth target as a benchmark to compare the performance of |
17 | health care entities on measures of health care spending growth; and |
18 | (4) Develop actionable interventions and policies to address health care spending growth |
19 | while ensuring health care access, equity, and a high quality of care for patients. |
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1 | 42-7.5-3. Definitions. |
2 | As used in this chapter the following words and phrases shall have the following meanings: |
3 | (1) “Government entity” means agencies of the executive branch of Rhode Island |
4 | government, including, but not limited to, the executive office of health and human services, the |
5 | department of behavioral healthcare, developmental disabilities and hospitals and the department |
6 | of administration, and the federal Centers for Medicare and Medicaid Services. |
7 | (2) “Health care entity” means an insurer or a health care provider entity organized as an |
8 | accountable care organization or accountable entity under the Rhode Island Medicaid program that |
9 | assumes accountability for the total or near total cost of care for a defined population. |
10 | (3) “Insurer" means all persons offering, administering, and/or insuring healthcare services, |
11 | including, but not limited to: |
12 | (i) Policies of accident and sickness insurance, as defined by chapter 18 of title 27: |
13 | (ii) Nonprofit hospital or medical-service plans, as defined by chapters 19 and 20 of title |
14 | 27; |
15 | (iii) Any person whose primary function is to provide diagnostic, therapeutic, or preventive |
16 | services to a defined population on the basis of a periodic premium; |
17 | (iv) All domestic, foreign, or alien insurance companies, mutual associations, and |
18 | organizations; |
19 | (v) Health maintenance organizations, as defined by chapter 41 of title 27; |
20 | (vi) All persons providing health benefits coverage on a self-insurance basis; |
21 | (vii) All third-party administrators described in chapter 20.7 of title 27; |
22 | (viii) All persons providing health benefit coverage under Title XIX of the Social Security |
23 | Act (Medicaid) as a Medicaid managed care organization offering managed Medicaid; and |
24 | (ix) All persons providing health benefit coverage through Medicare Advantage. |
25 | (x) "Insurer" shall not include any nonprofit dental service corporation as defined in § 27- |
26 | 20.1-2. |
27 | (4) "Person" means any individual, corporation, company, association, partnership, limited |
28 | liability company, firm, state governmental corporations, districts, and agencies, joint stock |
29 | associations, trusts, and the legal successor thereof. |
30 | 42-7.5-4. Health spending accountability and transparency program. |
31 | (a) The health spending accountability and transparency program (“program”) is hereby |
32 | created to utilize health care expenditure data collected from insurers and government entities to |
33 | facilitate transparency into the causes of health care spending growth, the distributive burden of |
34 | health care spending on consumers, businesses, and taxpayers, and to ensure accountability for |
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1 | health care spending growth and quality performance by health care entities. |
2 | (b) The program shall be administered by the health insurance commissioner who is hereby |
3 | directed to: |
4 | (1) Set and maintain an annual health care cost growth target that shall be used as a |
5 | benchmark to assess the performance of health care entities on measures of health care spending |
6 | growth; |
7 | (2) Convene a steering committee comprised of health care providers, health insurers, |
8 | consumer advocates, businesses, and other parties with relevant expertise to meet at least quarterly |
9 | and advise the health insurance commissioner on direction of the program; |
10 | (3) Use data to identify the factors that are causing increased health spending in the state, |
11 | to create actionable analysis to drive changes in policy and practice, and to develop and recommend |
12 | cost reduction strategies for health care entities; and |
13 | (4) Require health care entities whose annual health care spending growth exceeds the |
14 | health care cost growth target to file a written explanation of the reasons for exceeding the target |
15 | with the health insurance commissioner following a form and manner determined by the health |
16 | insurance commissioner. The health insurance commissioner shall review and provide a written |
17 | assessment of the explanation provided by the health care entity which shall be posted on the health |
18 | insurance commissioner’s website and submitted with the annual report to the general assembly as |
19 | described under § 42-7.5-5. |
20 | 42-7.5-5. Annual reports and public meetings. |
21 | (a) The health insurance commissioner shall prepare an annual report and convene a public |
22 | meeting concerning health care spending and health care spending growth. The report shall be |
23 | submitted to the general assembly annually on or before May 1 of each year, commencing on May |
24 | 1, 2023. |
25 | (b) The report shall include, but may not be limited to, the following analyses: |
26 | (1) An analysis of the absolute value and rate of growth of total health care spending for |
27 | the state as a whole; |
28 | (2) An analysis of the absolute value and rate of growth of health care spending by market, |
29 | including the commercial market, which shall be inclusive of health care expenditures made by |
30 | third-party insurers acting on behalf of self-insured employer groups in addition to fully insured |
31 | plans, the Medicaid managed care market, and the Medicare managed care market; |
32 | (3) An analysis of health care spending growth by health care entity compared to the health |
33 | care cost growth target. Health care entities shall be specifically identified in the report; |
34 | (4) An analysis of health care quality performance by health care entities based on a suite |
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1 | of health care quality measures selected by the health insurance commissioner; and |
2 | (5) An analysis of the drivers of health care spending growth by service category, as well |
3 | as the relative contribution of utilization and price on the rate of growth. |
4 | 42-7.5-6. Regulations. |
5 | The health insurance commissioner shall promulgate all necessary and proper rules and |
6 | regulations to implement this chapter. |
7 | SECTION 2. Title 42 of the General Laws entitled "STATE AFFAIRS AND |
8 | GOVERNMENT" is hereby amended by adding thereto the following chapter: |
9 | CHAPTER 14.7 |
10 | THE RHODE ISLAND ALL-PAYER HEALTH CARE PAYMENT REFORM ACT |
11 | 42-14.7-1. Short title. |
12 | This chapter shall be known and may be cited as “The Rhode Island All-Payer Health Care |
13 | Payment Reform Act.” |
14 | 42-14.7-2. Legislative findings, intent, and purpose. |
15 | The general assembly hereby finds and declares as follows: |
16 | (1) Health care providers are stewards of critical health care resources and deliver services |
17 | that are necessary to support the health and wellbeing of Rhode Islanders and the communities in |
18 | which they live. |
19 | (2) The structure and terms of health care payment significantly influences the allocation |
20 | of resources within the health care system by creating a system of incentives that influence the |
21 | behavior of health care providers and health care purchasers. |
22 | (3) The prevailing system of fee-for-service payment creates a financial incentive for |
23 | increasing the volume of health care services and acts as a barrier to meaningful systemic |
24 | transformations in health care delivery that would promote more affordable and predictable cost |
25 | growth, improved financial stability for health care providers, and technical innovation in care |
26 | delivery to support population health and quality excellence. |
27 | (4) The coronavirus disease 2019 public health emergency heightened the faults of the |
28 | prevailing system of fee-for-service payment. The sharp reduction in service volume caused by the |
29 | suspension of elective procedures, combined with increasing marginal costs borne by health care |
30 | providers to institute infection control measures, necessitated the appropriation and disbursement |
31 | of hundreds of millions of dollars by the State of Rhode Island and the federal government in the |
32 | form of economic stabilization and revenue replacement funds for health care providers. The |
33 | aggregate value of these economic stabilization and revenue replacement funds was largely |
34 | distributed to hospitals and hospital systems, which account for the highest share of total health |
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1 | care spending. |
2 | (5) The fragmented organization of health care purchasing activity between multiple public |
3 | and private payers, acting principally through competing health insurance companies, precludes |
4 | meaningful efforts to align the structure and terms of health care payment in the absence of |
5 | government intervention and creates administrative burdens for health care providers. |
6 | (6) Government, as health care purchaser and regulator, possesses a unique role as a |
7 | convener and facilitator of discussions between health care providers and health insurers, acting on |
8 | behalf of health care purchasers, to reform the structure and terms of health care payment as a |
9 | means to improve operating efficiency, improve health care quality, reduce administrative burden, |
10 | and serve the public interest in healthy people and equitable health outcomes. |
11 | (7) Payment reform, defined as the restructuring of the terms of health care payment |
12 | through the development and implementation of advanced value-based payment models, is |
13 | necessary to achieve the goals of affordable and predictable cost growth, improved financial |
14 | stability for health care providers, and technical innovation in care delivery to support population |
15 | health and quality excellence. |
16 | (8) The general assembly recognizes that on April 13, 2022, Rhode Island health care |
17 | leaders entered into a compact to accelerate advanced value-based payment model adoption, |
18 | finding that transforming payment away from fee-for-service to a prospective budget-based model |
19 | can support improved health care affordability and reorient health care delivery to focus on how |
20 | best to organize health care resources to meet population needs, and improve access, equity, patient |
21 | experience, and quality. |
22 | (9) The benefits of payment reform are maximized when advanced value-based payment |
23 | models enjoy the participation of all payers, public and private. Rhode Island has a successful track |
24 | record of all-payer health care reforms. This includes the patient-centered medical home program |
25 | for primary care endorsed by the general assembly under chapter 14.6 of title 42, the ("Rhode Island |
26 | All-Payer Patient-Centered Medical Home Act"). |
27 | (10) It is the intent of the general assembly to endorse and support the efforts of health care |
28 | providers and health insurers, acting on behalf of health care purchasers, to increase the adoption |
29 | of advanced value-based payment models in Rhode Island. Furthermore, the general assembly |
30 | endorses the findings and efforts articulated by health care leaders in the April 13, 2022, Compact |
31 | to Accelerate Advanced Value-Based Payment Model Adoption in Rhode Island. It is the purpose |
32 | of this chapter to provide policy direction and resources to support the development and |
33 | implementation of all-payer advanced value-based payment models in Rhode Island. |
34 | 42-14.7-3. Definitions. |
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1 | As used in this chapter, the following terms shall have the following meanings: |
2 | (1) “Advanced value-based payment model” means a prospective budget-based payment |
3 | model with quality-linked financial implications that is defined for a specific patient population |
4 | and/or set of services. |
5 | (2) "Health insurer" means all entities licensed, or required to be licensed, in this state that |
6 | offer health benefit plans in Rhode Island including, but not limited to, nonprofit hospital service |
7 | corporations and nonprofit medical-service corporations established pursuant to chapters 19 and 20 |
8 | of title 27, and health maintenance organizations established pursuant to chapter 41 of title 27 or as |
9 | defined in chapter 62 of this title 42, a fraternal benefit society or any other entity subject to state |
10 | insurance regulation that provides medical care on the basis of a periodic premium, paid directly |
11 | or through an association, trust or other intermediary, and issued, renewed, or delivered within or |
12 | without Rhode Island. |
13 | (3) "Health insurance plan" means any individual, general, blanket or group policy of |
14 | health, accident and sickness insurance issued by a health insurer as herein defined. |
15 | Health insurance plan shall not include insurance coverage providing benefits for: |
16 | (i) Hospital confinement indemnity; |
17 | (ii) Disability income; |
18 | (iii) Accident only; |
19 | (iv) Long-term care; |
20 | (v) Medicare supplement; |
21 | (vi) Limited benefit health; |
22 | (vii) Specified disease indemnity; |
23 | (viii) Sickness or bodily injury or death by accident or both; and |
24 | (ix) Other limited benefit policies. |
25 | 42-14.7-4. Promotion of all-payer health care payment reform. |
26 | (a) All-payer payment reform convening and payment model development shall be |
27 | implemented as set forth herein. |
28 | (1) The health insurance commissioner and the Medicaid director shall convene an all- |
29 | payer payment reform working group comprised of health care providers, including hospitals, |
30 | ambulatory care providers, and clinicians, health insurers, businesses, consumer advocates, and |
31 | other parties with relevant expertise and interest in all-payer adoption of advanced value-based |
32 | payment models. The health insurance commissioner and the Medicaid director, in consultation |
33 | with the working group, shall be charged with developing the structure and terms of advanced |
34 | value-based payment models for use by all-payers. The health insurance commissioner and the |
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1 | Medicaid director may exercise discretion in the selection and sequencing of payment model |
2 | development by provider type but, at minimum, shall develop recommendations for the design of |
3 | hospital global budgets for facility and employed clinician professional services and prospective |
4 | payment for at least two (2) professional provider types. The health insurance commissioner and |
5 | the Medicaid director may form subgroups of the working group to develop recommendations for |
6 | the design of specific all-payer advanced value-based payment models. |
7 | (b) All-payer payment reform reports shall be provided as set forth herein. |
8 | (1) The health insurance commissioner and the Medicaid director, in consultation with the |
9 | working group described under subsection (a) of this section, shall develop the following reports |
10 | to supply information necessary to develop and implement advanced value-based payment models. |
11 | These reports shall be submitted to the general assembly by the dates indicated in each subsection |
12 | below as follows: |
13 | (i) By July 1, 2024, the health insurance commissioner and the Medicaid director shall |
14 | complete a report examining the cost structure and financial performance of hospitals licensed in |
15 | Rhode Island. The report shall examine, at minimum, hospital operating costs, fixed costs and |
16 | variable costs, costs related to the provision of patient care, costs unrelated to the provision of |
17 | patient care, net patient revenues, the relative prices received by hospitals from different payers, |
18 | other income and operating expenses, profitability, and operating margins by payer type. The |
19 | hospitals included in the report may have up to thirty (30) days to review the draft report prior to it |
20 | being finalized; |
21 | (ii) By July 1, 2024, the health insurance commissioner and the Medicaid director shall |
22 | complete a report examining the cost-shifting phenomenon between payers. The report shall also |
23 | examine the fiscal and economic impact of changes to Medicaid reimbursement rates for hospital |
24 | services; and |
25 | (iii) By January 1, 2025, the health insurance commissioner and the Medicaid director shall |
26 | submit finished recommendations around payment model design for hospital global budgets for |
27 | facility and employed clinician professional services and prospective payment for at least two (2) |
28 | professional provider types. |
29 | (2) The health insurance commissioner and the Medicaid director shall procure necessary |
30 | technical assistance and consulting services to prepare the payment model recommendations under |
31 | subsection (a) of this section and the reports enumerated under subsection (b)(1) of this section. |
32 | (c) Engagement of the centers for Medicare and Medicaid services shall be undertaken as |
33 | set forth herein. |
34 | (1) The health insurance commissioner, in consultation with the Medicaid director, shall |
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1 | engage the federal Centers for Medicare and Medicaid Services to explore opportunities to secure |
2 | federal participation in advanced value-based payment models through the Medicare program. The |
3 | health insurance commissioner, for commercial and Medicare, and the Medicaid director, for |
4 | Medicaid, are authorized to negotiate the terms of any necessary waivers under Section 1115(A) of |
5 | the Social Security Act to secure federal participation in advanced value-based payment models in |
6 | Rhode Island. |
7 | 42-14.7-5. Annual reports on administration and implementation. |
8 | The health insurance commissioner and the Medicaid director shall report to the general |
9 | assembly annually on or before March 1 of every year, commencing on March 1, 2023, on the |
10 | implementation of advanced value-based payment models and the work performed by the all-payer |
11 | payment reform working group described under § 42-14.7-4(a)(1). The annual report shall include |
12 | recommendations and draft legislative language for adoption by the general assembly, if necessary, |
13 | to ensure continued progress toward implementation of advanced value-based payment models in |
14 | Rhode Island. |
15 | 42-14.7-6. Regulations. |
16 | The health insurance commissioner and the Medicaid director shall promulgate all |
17 | necessary and proper rules and regulations to implement this chapter. |
18 | SECTION 3. This act shall take effect upon passage. |
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LC006093 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO STATE AFFAIRS AND GOVERNMENT | |
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1 | This act would establish the Health Spending Accountability and Transparency Act to |
2 | promote accountability for health care spending by health insurers and health care providers. This |
3 | act would also establish the Rhode Island All-Payer Health Care Payment Reform Act to provide |
4 | policy direction and resources to support the development and implementation of all-payer |
5 | advanced value-based payment models in Rhode Island. |
6 | This act would take effect upon passage. |
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LC006093 | |
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