Chapter 274

2006 -- H 8243 SUBSTITUTE A AS AMENDED

Enacted 07/03/06

A N A C T

RELATING TO INSURANCE - THE RHODE ISLAND HEALTH CARE AFFORDABILITY ACT OF 2006 - PART II - TRANSPARENCY OF INFORMATION ON HEALTH CARE QUALITY AND COST

Introduced By: Representatives McNamara, Corvese, Story, Kennedy, and Gemma

Date Introduced: June 15, 2006

     It is enacted by the General Assembly as follows:

     SECTION 1. This act shall be known and may be cited as "The Rhode Island Health Care

Affordability Act in 2006 – Part II – Transparency of Information on Health Care Quality and

Cost.

     SECTION 2. Sections 23-17.17-2, 23-17.17-3 and 23-17.17-4 of the General Laws in

Chapter 23-17.17 entitled "Health Care Quality Program" are hereby amended to read as follows:

23-17.17-2. Definitions. -- (a) "Clinical outcomes" means information about the results

of patient care and treatment.

      (b) "Director" means the director of the department of health or his or her duly

authorized agent.

      (c) "Health care facility" has the same meaning as contained in the regulations

promulgated by the director of health pursuant to chapter 17 of this title.

      (d) "Patient satisfaction" means the degree to which the facility or provider meets or

exceeds the patients' expectations as perceived by the patient by focusing on those aspects of care

that the patient can judge.

      (e) "Quality of care" means the result or outcome of health care efforts.

      (f) "Risk-adjusted" means the use of statistically valid techniques to account for patient

variables that may include, but need not to be limited to, age, chronic disease history, and

physiologic data.

      (g) "Performance measure" means a quantitative tool that provides an indication of an

organization's performance in relation to a specified process or outcome.

      (h) "Reporting program" means an objective feedback mechanism regarding individual

or facility performance that can be used internally to support performance improvement activities

and externally to demonstrate accountability to the public and other purchasers, payers, and

stakeholders.

(i) "Health care provider" means any physician, or other licensed practitioners with

responsibility for the care, treatment, and services rendered to a patient.

(j) "Insurer" means any entity subject to the insurance laws and regulations of this state,

that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the

costs of health care services, including, without limitation, an insurance company offering

accident and sickness insurance, a health maintenance organization, as defined by section 27-41-

1, a nonprofit hospital or medical service corporation, as defined by chapters 27-19 and 27-20, or

any other entity providing a plan of health insurance or health benefits.

23-17.17-3. Establishment of health care quality performance measurement and

reporting program. -- The director of health is authorized and directed to develop a state health

care quality performance measurement and reporting program. The health care quality

performance measurement and reporting program shall include quality performance measures and

reporting for health care facilities licensed in Rhode Island. The program shall be phased in over

a multi-year period and shall begin with the establishment of a program of quality performance

measurement and reporting for hospitals. In subsequent years, quality performance measurement

and reporting requirements will be established for other types of health care facilities such as

nursing facilities, home nursing care providers, and other licensed facilities, and licensed health

care providers as determined by the director of health. Prior to developing and implementing a

quality performance measurement and reporting program for hospitals or any other health care

facility or health care provider, the director shall seek public comment regarding the type of

performance measures to be used and the methods and format for collecting the data.

23-17.17-4. Program requirements -- Adoption of rules and regulations. -- (a) The

quality performance measurement and reporting program established under this chapter shall, at a

minimum, incorporate the following:

      (1) A standardized data set of clinical performance measures, risk-adjusted for patient

variables, that shall be collected and reported periodically to the department, and

      (2) Comparable, statistically valid patient satisfaction measures that shall be conducted

periodically by facilities and/or health care providers and reported to the department.

      (b) In accordance with the provisions of section 42-35-3, the director is authorized to

adopt, promulgate, and enforce rules and regulations designed to implement the provisions of this

chapter including the details and format for the periodic reporting requirements.

     SECTION 3. 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 March 15, 2007, a report to the legislature on proposed methods for health

maintenance organizations as defined by section 27-41-1, and nonprofit hospital or medical

service corporations as defined by chapters 27-19 and 27-20, to make facility-specific data and

other medical service-specific data available in reasonably consistent formats to patients

regarding quality and costs. This information would help consumers make informed choices

regarding the facilities and/or clinicians or physician practices at which to seek care. Among the

items considered would be the unique health services and other public goods provided by

facilities and/or clinicians or physician practices in establishing the most appropriate cost

comparisons.

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

mechanisms for resolving health plan/provider disputes; and

(v)(vi) 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.

      (e) To enforce the provisions of Title 27 and Title 42 as set forth in section 42-14-5(d).

     SECTION 4. This act shall take effect upon passage.

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LC03466/SUB A

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