Chapter 274

2005 -- S 0838 SUBSTITUTE A

Enacted 07/13/05

A N A C T

RELATING TO INSURANCE - AUTHORIZING HEALTH CARE PROVIDERS TO DISCUSS WITH HEALTH CARE INSURERS AND PROVIDING FOR THE POWERS AND DUTIES OF THE HEALTH INSURANCE COMMISSIONER

Introduced By: Senators Gallo, P Fogarty, and Walaska

Date Introduced: February 17, 2005

It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-14.5-3 of the General Laws in Chapter 42-14.5 entitled "The

Rhode Island Health Care Reform Act of 2004 - Health Insurance Oversight" is hereby amended

to read as follows:

42-14.5-3. Powers and duties. [Contingent effective date; see notes under section 42-

14.5-1.] -- The health insurance commissioner shall have the following powers and duties:

      (a) To conduct an annual public meeting or meetings, separate and distinct from rate

hearings pursuant to section 42-62-13, regarding the rates, services and operations of insurers

licensed to provide health insurance in the state the effects of such rates, services and operations

on consumers, medical care providers and patients, and the market environment in which such

insurers operate. Notice of not less than ten (10) days of said hearing(s) shall go to the general

assembly, the governor, the Rhode Island medical society, the Hospital Association of Rhode

Island, the director of health, and the attorney general. Public notice shall be posted on the

department's web site and given in the newspaper of general circulation, and to any entity in

writing requesting notice.

      (b) To make recommendations to the governor and the joint legislative committee on

health care oversight regarding health care insurance and the regulations, rates, services,

administrative expenses, reserve requirements, and operations of insurers providing health

insurance in the state, and to prepare or comment on, upon the request of the co-chairs of the joint

committee on health care oversight or upon the request of the governor, draft legislation to

improve the regulation of health insurance. In making such recommendations, the commissioner

shall recognize that it is the intent of the legislature that the maximum disclosure be provided

regarding the reasonableness of individual administrative expenditures as well as total

administrative costs. The commissioner shall also make recommendations on the levels of

reserves including consideration of: targeted reserve levels; trends in the increase or decrease of

reserve levels; and insurer plans for distributing excess reserves.

      (c) To establish a consumer/business/labor/medical advisory council to obtain

information and present concerns of consumers, business and medical providers affected by

health insurance decisions. The council shall be involved in the planning and conduct of the

public meeting in accordance with subsection (a) above. The advisory council shall assist in the

design of an insurance complaint process to ensure that small businesses whom experience

extraordinary rate increases in a given year could request and receive a formal review by the

department. The advisory council shall assess views of the health provider community relative to

insurance rates of reimbursement, billing and reimbursement procedures, and the insurers' role in

promoting efficient and high quality health care. The advisory council shall issue an annual report

of findings and recommendations to the governor and the joint legislative committee on health

care oversight. The advisory council is to be diverse in interests and shall include representatives

of community consumer organizations; small businesses, other than those involved in the sale of

insurance products; and hospital, medical, and other health provider organizations. Such

representatives shall be nominated by their respective organizations. The advisory council shall

be co-chaired by the health insurance commissioner and a community consumer organization or

small business member to be elected by the full advisory council.

(d) To establish and provide guidance and assistance to a subcommittee ("The

Professional Provider-Health Plan Work Group") of the advisory council created pursuant to

subsection (c) above, composed of health care providers and Rhode Island licensed health plans.

This subcommittee shall develop a plan to implement the following activities:

(i) By January 1, 2006, a method whereby health plans shall disclose to contracted

providers the fee schedules used to provide payment to those providers for services rendered to

covered patients;

(ii) By April 1, 2006, a standardized provider application and credentials verification

process, for the purpose of verifying professional qualifications of participating health care

providers;

(iii) By September 1, 2006, a uniform health plan claim form to be utilized by

participating providers;

(iv) By December 1, 2006, contractual disclosure to participating providers of the

mechanisms for resolving health plan/provider disputes; and

(v) By February 1, 2007, a uniform process for confirming in real time patient insurance

enrollment status, benefits coverage, including co-pays and deductibles.

A report on the work of the subcommittee shall be submitted by the health insurance

commissioner to the joint legislative committee on health care oversight on March 1, 2006 and

March 1, 2007.

(d) (e) To enforce the provisions of Title 27 and Title 42 as set forth in section 42-14-

5(d).

     SECTION 2. Chapter 42-14.5 of the General Laws entitled "The Rhode Island Health

Care Reform Act of 2004 - Health Insurance Oversight" is hereby amended by adding thereto the

following section:

42-14.5-1.1. Legislative findings. -- The general assembly hereby finds and declares as

follows:

(1) A substantial amount of health care services in this state are purchased for the benefit

of patients by health care insurers engaged in the provision of health care financing services or is

otherwise delivered subject to the terms of agreements between health care insurers and providers

of the services.

(2) Health care insurers are able to control the flow of patients to providers of health care

services through compelling financial incentives for patients in their plans to utilize only the

services of providers with whom the insurers have contracted.

(3) Health care insurers also control the health care services rendered to patients through

utilization review programs and other managed care tools and associated coverage and payment

policies.

(4) By incorporation or merger the power of health care insurers in markets of this state

for health care services has become great enough to create a competitive imbalance, reducing

levels of competition and threatening the availability of high quality, cost-effective health care.

(5) The power of health care insurers to unilaterally impose provider contract terms may

jeopardize the ability of physicians and other health care providers to deliver the superior quality

health care services that have been traditionally available in this state.

(6) It is the intention of the general assembly to authorize health care providers to jointly

discuss with health care insurers topics of concern regarding the provision of quality health care

through a committee established by an advisory to the health insurance commissioner.

SECTION 3. This act shall take effect upon passage.     

=======

LC02484/SUB A/2

=======