CHAPTER 42-12.4
RHODE ISLAND HEALTH CARE INSURANCE ACT

(1) To make, amend and repeal bylaws, rules and regulations for the management of its affairs;

(2) To adopt an official seal;

(3) To sue and be sued in its own name;

(4) To make contracts and execute all instruments necessary or convenient to carry out the purposes of said trust;

(5) To acquire, own, hold, dispose of and encumber personal, real or intellectual property of any nature or any interest therein;

(6) To enter into agreements or transactions with any federal, state or municipal agency or other public institution or with any private individual, partnership, firm, corporation, association or other entity;

(7) To appear on its own behalf before boards, commissions, departments or other agencies of federal, state or municipal government;

(8) To appoint officers and to engage and hire employees, including legal counsel, consultants, agents and advisors and prescribe their duties and fix their compensation;

(9) To establish advisory boards;

(10) To procure insurance against any losses in connection with property of the trust in such amounts and from such insurers, as may be necessary or desirable;

(11) To invest any funds held in reserves or sinking funds, or any funds not required for immediate disbursement, in such investments as may be lawful for fiduciaries in the state of Rhode Island;

(12) To accept, hold, use, apply and dispose of any and all donations, grants, bequests and devises, conditional or otherwise, of money, property, services or other things of value which may be received from the United States, any agency of the United States or any other governmental agency, institution, person, firm or corporation, whether public or private. Such donations, grants, bequests and devises shall be held, used, applied or disposed of for any or all of the purposes specified in this act and in accordance with the terms and conditions of any such donation, grant, request or devise. The trust shall detail receipt of each such donation, grant, request or devise in the annual report of the trust, which shall include the identity of the donor and the lender, the nature of the transaction and any conditions attached to the donation or grant;

(13) To do any and all other things necessary and convenient to carry out the purposes of this act;

(14) To set or establish methods for setting rates, fees and prices for the Rhode Island health care system and reviewing the sufficiency of such rates, fees and prices;

(15) To establish timely and simplified reimbursement systems for the Rhode Island health care system;

(16) To establish standards of care and staffing for the Rhode Island health care system;

(17) To establish health care guidelines for the treatment and prevention of specific illnesses under the Rhode Island health care system;

(18) To review health care providers based on the guidelines established in subdivision (17) of this section;

(19) To ensure that all existing laws regarding patient confidentiality are enforced;

(20) To approve or reject any health care capital expenditure by the Rhode Island health care system in excess of five hundred thousand dollars ($500,000);

(21) To arbitrate grievances arising under the Rhode Island health care system;

(22) To establish an enrollment system for all persons eligible to participate in the Rhode Island health care system;

(23) To establish a formula for and develop global health care budgets and other system budgets for the Rhode Island health care system;

(24) To use bulk purchasing power to lower costs of the Rhode Island health care system;

(25) To adopt a medical benefits package for the Rhode Island health care system;

(26) To establish and fund the trust's administrative structure;

(27) To administer Rhode Island health care trust revenues;

(28) To recommend, in conjunction with the department of business regulation and subject to the approval of the general assembly, the imposition of taxes to fund the trust;

(29) To negotiate the transfer of funds from the state and the federal government for health care and administrative duties previously performed by these governments and transferred to the trust;

(30) To administer funds to support the trust; and

(31) To institute global budgets for health care institutions.

(b) Each member shall serve a term of five (5) years, except that for the initial appointments, four (4) members shall serve three (3) year terms, four (4) members shall serve four (4) year terms and four (4) members shall serve for five (5) year terms. Any person appointed to fill a vacancy on the board shall serve the unexpired portion of the vacated term. Any trustee shall be eligible for reappointment. The governor may remove any trustee for cause.

(c) Eight (8) trustees shall constitute a quorum and the affirmative vote of a majority of the trustees present and eligible to vote at a meeting shall be necessary for any action to be taken by the board. The board of trustees shall meet at least ten (10) times each year and have final authority over the activities of the trust. The director of social services shall serve as chairperson. The gubernatorial appointees shall annually elect a vice-chairperson from among the appointed members of the board of trustees. The trustees shall serve without compensation, but shall be reimbursed for actual and necessary expenses incurred in the performance of their duties.

(b) The executive director may, as said director deems necessary for the effective administration and proper performance of the duties of the trust and subject to the approval of the board of trustees:

(1) Adopt, amend, alter, repeal and enforce all reasonable rules, regulations and orders as may be necessary to carry out the provisions of this act; and

(2) Appoint and remove employees and consultants, provided at least one employee shall be hired to serve as director of each of the divisions of the trust created by this act, subject to the availability of funds in the trust.

(c) The executive director, in consultation with the directors of each division of the trust, shall:

(1) Negotiate or establish terms and conditions for the provision of health care services and rates of reimbursement for such services on behalf of Rhode Island residents, which terms shall include provisions to assure that Rhode Island residents are entitled to use their health insurance benefits in other states and countries for acute care while visiting such other states and countries;

(2) Negotiate or establish manufacturer discounts and rebates for covered prescription drugs and other health care products;

(3) Develop prospective reimbursement systems for covered services to provide prompt and fair payment to eligible providers;

(4) Oversee preparation of annual operating and capital budgets for the statewide delivery of health care services in accordance with the budgetary constraints provided in section 13 of this act;

(5) Oversee preparation of annual benefits reviews to determine the adequacy of covered services; and

(6) In collaboration with the department of business regulation and subject to the approval of the general assembly, establish alterations in the methods of payment for the Rhode Island health care trust provided such changes are consistent with the guidelines established by this chapter.

(b) Subject to the direction, control and supervision of the executive director, the director of planning, development and research shall be responsible for:

(1) Recommending to the executive director, in conjunction with the consumer, professional and health care organization advisory councils, a standard benefits package which shall include: (A) diagnostic test, treatments, including, but not limited to, mental health services, general medical services, emergency medical care, hemodialysis, and pediatric services, medicinal and durable medical equipment prescribed by licensed health care providers; (B) preventive and rehabilitative services; (C) inpatient, partial hospitalization and residential treatment services for medical and mental health disorders; (D) hospice care; (E) home-based and office-based services by individual providers; (F) long-term care and treatment; (G) prenatal, perinatal and mastery care, family planning, fertility and reproductive health care; and (H)_dental care. The director of planning, development and research shall review and update the benefits package on an annual basis;

(2) Recommending to the executive director, after consultation and negotiation with the professional, health care and consumer advisory councils, fees for providers covering all billable procedures. Such fees shall not be less than standard federal medicare fees for providers in the state of Rhode Island and shall be renegotiated on an annual basis;

(3) Recommending to the executive director, in consultation with the professional advisory council, guidelines for the treatment and prevention of medical and mental illnesses;

(4) Following negotiations with the health care organizations and consumer advisory councils, recommending to the executive director fees for health care facilities. In recommending such fees, the director shall give consideration to establishing capitated global operating budgets and prospective payment mechanisms for all freestanding health care facilities that provide nonoutpatient services for Rhode Island residents. If prospective payment schedules are developed, the trust shall provide for retrospective adjustment of payments to eligible health care facilities. Such payments shall be adjusted yearly;

(5) In consultation with the consumer, health care organizations and professional advisory councils, recommending an annual operating budget, with the understanding that any increases in the budget shall not exceed any increase in national expenditures for health care for the preceding year and within the budgetary constraints provided in section 42-12.4-13;

(6) Making recommendations as to how the annual global operating budget shall be funded from the following sources: (A) Money transferred to the trust equivalent to the funds the state would have paid to provide health care to indigent residents under title XIX of the social security act; (B) money transferred to the trust from the federal government that would have been used to pay medicare, title XIX, or other health care costs for Rhode Island residents; (C) gifts, grants and donations; (D) copayments from outpatient provider visits; (E) taxes on items which have been shown to contribute to illness such as tobacco products, alcohol, gasoline and air and water polluting businesses; (F) a health care payroll tax; (G) a graduated health care insurance income tax; (H) investments; (I) unutilized money from the tobacco settlement; (J) money transferred to the trust that would have been utilized by the state to administer health care administrative functions that are transferred to the trust; and (K) general appropriations transferred to the trust by the general assembly in response to requests from the executive director of the trust;

(7) In consultation with the consumer, professional and health care organizations advisory councils, making recommendations concerning current and future health needs by studying under-utilization and over-utilization of the state health system in various parts of the state, unnecessary duplication of services, outcome measurements of treatment, innovations in training, the need for, or overabundance of, particular types of health care workers in particular areas of the state, needed capital expenses and ongoing research into the best means to prevent and treat disease in consultation with the consumer, professional and health care organizations advisory councils;

(8) Recommending research based changes in the Rhode Island health care system to the executive director and delineating the cost of such recommended changes;

(9) Assisting and coordinating research efforts with the division of quality assurance in efforts to evaluate the efficacy of health care providers or health care institutions, as well as their overall compliance with the treatment guidelines developed by the division of planning, development and research.

(b) The director of the benefits division shall be responsible for:

(1) In consultation with the consumer, professional and health care organization advisory councils, making prompt payments to providers for covered services;

(2) In conjunction with the director of the division of quality assurance and the director of the division of planning, development and research and in consultation with the consumer, professional and health care organizations advisory councils, developing information management systems necessary for provider payment and utilization review; and

(3) In consultation with the consumer advisory council, investing trust fund assets consistent with state law.

(1) In consultation with the consumer, professional and health care organizations advisory councils, studying the utilization patterns of all health care providers and health care organizations and the quality of the services they provide. In fulfilling this responsibility, the quality assurance division shall investigate all situations of possible billing fraud by individuals or institutions and investigate providers whose patterns of billing are inconsistent with the guidelines developed by the trust for the treatment of specific diseases;

(2) In consultation with the consumer advisory council, investigating consumer fraud that results from accessing the Rhode Island health care system illegally;

(3) Certifying, licensing and recertifying all health care providers in this state;

(4) In consultation with the consumer, professional and health care organizations advisory councils, responding to complaints on the part of consumers, health care providers and health care organizations concerning inadequate, unprofessional, impaired or prejudicial treatment on the part of a health care provider or health care organizations;

(5) In consultation with the consumer, professional and health care organizations advisory councils, instituting reeducation, treatment, supervision requirements and restricting or terminating the licensure of health care providers or institutions that are found to be deficient in their quality or manner of providing health care;

(6) In consultation with the consumer and professional advisory councils, establishing and enforcing continuing education requirements for specified health care workers in this state;

(7) In consultation with the consumer advisory council, responding to and arbitrating disagreements between providers and consumers or providers and the state concerning eligibility for treatment eligibility for treatment eligibility for reimbursement under the Rhode Island health care system or any other disagreement the director deems worthy of arbitration;

(8) In consultation with the consumer and health care organizations advisory councils, establishing procedures for enforcing standards of care and staffing.

(b) The consumer division director shall, subject to the direction, control and supervision of the executive director, be responsible for:

(1) Establishing a reasonable number of regional offices located throughout the state. Each council making prompt payments to providers for covered services;

(2) In conjunction with the director of the division of quality assurance and the director of the division of planning development and research and in consultation with the consumer, professional and health care organizations advisory councils, developing information management systems necessary for provider payment and utilization review; and

(3) In consultation with the consumer advisory council, investing trust fund assets consistent with state law.

(b) Each member shall serve a term of five (5) years, provided in making the initial appointments, seven (7) members shall serve three (3) year terms, seven (7) members shall serve four (4) year terms and seven (7) members shall serve five (5) year terms. Any person appointed to fill a vacancy on the advisory council shall serve for only the unexpired term of the member such person replaces. Any member shall be eligible for reappointment. The governor for cause may remove any member. Eleven (11) members shall constitute a quorum and the affirmative vote of a majority of council members present and eligible to vote at a meeting shall be necessary for any action to be taken by the advisory council. The members shall annually elect a chairperson.

(c) The statewide consumer advisory council shall serve as an independent oversight body, which shall:

(1) Work with the director of the planning, development and research division to make recommendations to the executive director concerning benefits packages and payment schedules for provider and health care organizations and capital expenditures;

(2) Work with the director of the consumer division to promote consumer education and healthy behavior among consumers;

(3) Work with the director of the quality assurance division to develop procedures and investigate professional providers and health care organizations that are not in compliance with the guidelines for the prevention and treatment of disease in the state of Rhode Island or the staffing and quality of care standards established by the Rhode Island health care system;

(4) Work with the director of the quality assurance division to develop procedures and investigate consumer fraud that results from accessing the Rhode Island health care system illegally;

(5) Work with the director of the quality assurance division to develop and enforce continuing education requirements for health care providers in this state;

(6) Work with the director of the quality assurance division to assure that grievances by consumers, health care providers and health care organizations concerning the Rhode Island health care system are appropriately investigated and resolved with recommended changes;

(7) Work with the director of the benefits division to assure that trust money is appropriately invested and timely and efficient payment mechanisms are utilized to pay health care providers and health care organizations.

(d) the advisory council may expend its budget in whatever manner it determines best reserves the interests of health care consumers and the Rhode Island health care system. The advisory council shall submit a budget proposal to the executive director each year and may alter said proposal from time to time throughout the year. The executive director shall, from time to time, requisition from the trust such amounts as the executive director deems necessary to meet the current obligations of the advisory council, provided such amounts shall not exceed, in the aggregate, five hundred thousand dollars ($500,000) per year.

(e) Each advisory council member shall serve without compensation but shall be reimbursed for actual and necessary expenses incurred in the performance of the members duties.

(A) who has been a legal resident of this state for at least one (1) year;

(7) Obtain grants from the federal government and other funding sources to help establish the Rhode Island health care trust and study its cost and effectiveness.

(8) Seek all necessary waivers, exemptions, agreements or legislation, so all current federal and state payments for health care shall be paid directly to the trust at the starting date of the trust, which shall then assume responsibility for all benefits and services previously paid for by such federal and state payments for health care.

(9) Establish provisions for the retraining and assistance in finding suitable employment for those insurance and health care workers who are displaced by the enactment of the benefits package of the trust. Provisions for such retraining and assistance shall be made in the initial budget, not to exceed one percent (1%) of such initial budget, and shall be considered in subsequent budgets up to three (3) years after the beginning of the trust.

(1) The Rhode Island health care trust shall seek to maximize all sources of federal financial support for health care services in this state. The executive director of the trust shall obtain waivers, exemptions or legislation, if needed, so that all current federal payments for health care, including medicare, shall be paid directly to the fund;

(2) The state of Rhode Island shall pay into the fund the moneys it currently pays for health care services and all administrative functions to be assumed by the trust currently carried out by the state of Rhode Island. The total appropriation for these health and administrative services shall be altered yearly through negotiations between the executive director of the trust, the director of the budget and the general assembly;

(3) Taxes shall be imposed on items that contribute to increased health care costs. Surtaxes, to be determined by the general assembly, in conjunction with the executive director of the trust, are imposed on tobacco products, alcohol, gasoline and facilities operating in the state of Rhode Island that generate determined to contribute to the health care costs of the residents of the state of Rhode Island;

(4) All employers shall pay a trust fund premium, based on their payroll, starting with the enactment of the benefit plan of the trust, as determined by the trust and the department of the department of business regulation. The amount of this premium shall be in line with, or less than, the average contributions that employers make toward employee health benefits as of the effective date of this act, adjusted to a rate less than national health care inflation or deflation;

(5) Families or individuals receiving covered benefits under the Rhode Island health care system shall contribute premiums on a sliding scale as determined by the trust in consultation with the department of the department of business regulation. The premium shall be collected through the current state income tax system. There shall be no premiums for families of individuals with income below one hundred eighty-five (185%) percent of federal poverty level guidelines. The premium for employed workers shall be negotiated to be less than the amount such an individual or family would pay through an employer or private insurance plan for a comparable benefits package. Premiums for medicare-eligible individuals shall be limited to less than the cost of private insurance to cover those services which are benefits of the trust but not of the federal medicare program;

(6) The trust shall seek grants from all appropriate and available sources to fund research and administration relevant to the Rhode Island health care system;

(7) The trust shall retain: (A) Any charitable donations, gifts, grants or bequests made to it from whatever source consistent with state and federal laws; (B) any rebates negotiated or established; and (C) income from the investment of trust assets, including any remainder from the state tobacco settlement, consistent with state law;

(8) Any additional funds the state of Rhode Island shall distribute to the trust through a general appropriation enacted by the general assembly in response to a funding request by the executive director of the trust.

(b) Amounts credited to the fund shall be used for the following purposes:

(1) To reimburse eligible health care providers and health care facilities for covered services rendered to eligible patients;

(2) To pay for preventative educational and outreach programs, as well as related health care activities, not to exceed three percent (3%) of the trust income in any fiscal year;

(3) To supplement other sources of financing for approved capital investments in excess of five hundred million dollars ($500,000,000) for eligible health care providers and facilities, not to exceed three percent (3%) of trust income in any fiscal year;

(4) To supplement other sources of financing for medical education and research, not to exceed three percent (3%) of trust income in any fiscal year;

(5) To fund training and retraining programs for workers in the health care sector displaced as a result of administrative streamlining gained by moving from a multipayer to a single payer health care system, not to exceed one (1%) percent of trust income in any fiscal year provided, such funding shall terminate June thirtieth of the third year following full implementation of this chapter;

(6) To fund a reserve account to finance potential budgetary shortfalls, epidemics and other extraordinary events, not to exceed more than one (1%) percent of the trust income in any fiscal year;

(7) To pay for the benefits division of the trust, not to exceed three (3%) percent of trust income in any fiscal year;

(8) To pay for the general administration of the trust, including the office of the executive director and the divisions of planning, development and research and quality assurance, not to exceed three (3%) percent of trust income in any fiscal year, not including moneys transferred to the trust from the state of Rhode Island to fund those quality assurance activities that will be taken over by the trust which were previously carried out by the department of health;

(9) To pay the administrative costs of the statewide consumer advisory council, not to exceed five hundred thousand ($500,000) dollars in any fiscal year, adjusted for inflation or deflation;

(10) To pay the administrative costs of the statewide health care organizations advisory council, not to exceed one hundred thousand ($100,000) dollars in any fiscal year, adjusted for inflation or deflation; and

(11) To pay the administrative costs of the statewide health care organizations advisory council, not to exceed one hundred thousand ($100,000) dollars in any fiscal year, adjusted for inflation or deflation.

(c) Unexpected trust assets shall not be deemed to be surplus funds, but shall be retained in the fund for investment purposes. These funds shall be addressed and accounted for in determining appropriate funding for the trust.