ARTICLE 8

RELATING TO MEDICAL ASSISTANCE

     SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled

“Licensing of Health Care Facilities” is hereby amended to read as follows:

     § 23-17-38.1. Hospitals — Licensing fee.

     (a) There is imposed a hospital licensing fee for state fiscal year 2023 against each

hospital in the state. The hospital licensing fee is equal to five and forty-two hundredths percent

(5.42%) of the net patient-services revenue of every hospital for the hospital’s first fiscal year

ending on or after January 1, 2021, except that the license fee for all hospitals located in

Washington County, Rhode Island shall be discounted by thirty-seven percent (37%). The

discount for Washington County hospitals is subject to approval by the Secretary of the U.S.

Department of Health and Human Services of a state plan amendment submitted by the executive

office of health and human services for the purpose of pursuing a waiver of the uniformity

requirement for the hospital license fee. This licensing fee shall be administered and collected by

the tax administrator, division of taxation within the department of revenue, and all the

administration, collection, and other provisions of chapter 51 of title 44 shall apply. Every

hospital shall pay the licensing fee to the tax administrator on or before June 30, 2023, and

payments shall be made by electronic transfer of monies to the general treasurer and deposited to

the general fund. Every hospital shall, on or before May 25, 2023, make a return to the tax

administrator containing the correct computation of net patient-services revenue for the hospital

fiscal year ending September 30, 2021, and the licensing fee due upon that amount. All returns

shall be signed by the hospital’s authorized representative, subject to the pains and penalties of

perjury.

     (b)(a) There is also imposed a hospital licensing fee described in subsections (c) through

(f) for state fiscal years 2024 and 2025 against net patient-services revenue of every non-

government owned hospital as defined herein for the hospital’s first fiscal year ending on or after

January 1, 2022. The hospital licensing fee shall have three (3) tiers with differing fees based on

inpatient and outpatient net patient-services revenue. The executive office of health and human

services, in consultation with the tax administrator, shall identify the hospitals in each tier, subject

to the definitions in this section, by July 15, 2023, and shall notify each hospital of its tier by

August 1, 2023.

     (b) There is also imposed a hospital licensing fee described in subsections (c) through (f)

for state fiscal year 2026 against net patient-services revenue of every non-government owned

hospital as defined herein for the hospital’s first fiscal year ending on or after January 1, 2023.

The hospital licensing fee shall have three (3) tiers with differing fees based on inpatient and

outpatient net patient-services revenue. The executive office of health and human services, in

consultation with the tax administrator, shall identify the hospitals in each tier, subject to the

definitions in this section, by July 15, 2025, and shall notify each hospital of its assigned tier by

August 1, 2025.

     (c) Tier 1 is composed of hospitals that do not meet the description of either Tier 2 or

Tier 3.

     (1) The inpatient hospital licensing fee for Tier 1 is equal to thirteen and twelve

hundredths percent (13.12%) of the inpatient net patient-services revenue derived from inpatient

net patient-services revenue of every Tier 1 hospital.

     (2) The outpatient hospital licensing fee for Tier 1 is equal to thirteen and thirty

hundredths percent (13.30%) of the net patient-services revenue derived from outpatient net

patient-services revenue of every Tier 1 hospital.

     (d) Tier 2 is composed of high Medicaid/uninsured cost hospitals and independent

hospitals.

     (1) The inpatient hospital licensing fee for Tier 2 is equal to two and sixty-three

hundredths percent (2.63%) of the inpatient net patient-services revenue derived from inpatient

net patient-services revenue of every Tier 2 hospital.

     (2) The outpatient hospital licensing fee for Tier 2 is equal to two and sixty-six

hundredths percent (2.66%) of the outpatient net patient-services revenue derived from outpatient

net patient-services revenue of every Tier 2 hospital.

     (e) Tier 3 is composed of hospitals that are Medicare-designated low-volume hospitals

and rehabilitative hospitals.

     (1) The inpatient hospital licensing fee for Tier 3 is equal to one and thirty-one

hundredths percent (1.31%) of the inpatient net patient-services revenue derived from inpatient

net patient-services revenue of every Tier 3 hospital.

     (2) The outpatient hospital licensing fee for Tier 3 is equal to one and thirty-three

hundredths percent (1.33%) of the outpatient net patient-services revenue derived from outpatient

net patient-services revenue of every Tier 3 hospital.

     (f) There is also imposed a hospital licensing fee for state fiscal year 2024 against state-

government owned and operated hospitals in the state as defined herein. The hospital licensing

fee is equal to five and twenty-five hundredths percent (5.25%) of the net patient-services

revenue of every hospital for the hospital’s first fiscal year ending on or after January 1, 2022.

There is also imposed a hospital licensing fee for state fiscal years 2025 and 2026 against state-

government owned and operated hospitals in the state as defined herein equal to five and twenty-

five hundredths percent (5.25%) of the net patient-services revenue of every hospital for the

hospital’s first fiscal year ending on or after January 1, 2023.

     (g) The hospital licensing fee described in subsections (b) through (f) is subject to U.S.

Department of Health and Human Services approval of a request to waive the requirement that

healthcare-related taxes be imposed uniformly as contained in 42 C.F.R. § 433.68(d).

     (h) This hospital licensing fee shall be administered and collected by the tax

administrator, division of taxation within the department of revenue, and all the administration,

collection, and other provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the

licensing fee to the tax administrator before June 30 June 25 of each fiscal year, and payments

shall be made by electronic transfer of monies to the tax administrator and deposited to the

general fund. Every hospital shall, on or before August 1, 2023 of each fiscal year, make a return

to the tax administrator containing the correct computation of inpatient and outpatient net patient-

services revenue for the hospital fiscal year ending in 2022 data referenced in subsection (a) and

or (b), and the licensing fee due upon that amount. All returns shall be signed by the hospital’s

authorized representative, subject to the pains and penalties of perjury.

     (i) For purposes of this section the following words and phrases have the following

meanings:

     (1) “Gross patient-services revenue” means the gross revenue related to patient care

services.

     (2) “High Medicaid/uninsured cost hospital” means a hospital for which the hospital’s

total uncompensated care, as calculated pursuant to § 40-8.3-2(4), divided by the hospital’s total

net patient-services revenues, is equal to six percent (6.0%) or greater.

     (3) “Hospital” means the actual facilities and buildings in existence in Rhode Island,

licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on

that license, regardless of changes in licensure status pursuant to chapter 17.14 of this title

(hospital conversions) and § 23-17-6(b) (change in effective control), that provides short-term

acute inpatient and/or outpatient care to persons who require definitive diagnosis and treatment

for injury, illness, disabilities, or pregnancy. Notwithstanding the preceding language, the

negotiated Medicaid managed care payment rates for a court-approved purchaser that acquires a

hospital through receivership, special mastership, or other similar state insolvency proceedings

(which court-approved purchaser is issued a hospital license after January 1, 2013) shall be based

upon the newly negotiated rates between the court-approved purchaser and the health plan, and

such rates shall be effective as of the date that the court-approved purchaser and the health plan

execute the initial agreement containing the newly negotiated rate. The rate-setting methodology

for inpatient hospital payments and outpatient hospital payments set forth in §§ 40-8-13.4(b) and

40-8-13.4(b)(2), respectively, shall thereafter apply to negotiated increases for each annual

twelve-month (12) period as of July 1 following the completion of the first full year of the court-

approved purchaser’s initial Medicaid managed care contract.

     (4) “Independent hospitals” means a hospital not part of a multi-hospital system.

     (5) “Inpatient net patient-services revenue” means the charges related to inpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

     (6) “Medicare-designated low-volume hospital” means a hospital that qualifies under 42

C.F.R. 412.101(b)(2) for additional Medicare payments to qualifying hospitals for the higher

incremental costs associated with a low volume of discharges.

     (7) “Net patient-services revenue” means the charges related to patient care services less

(i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual allowances.

     (8) “Non-government owned hospitals” means a hospital not owned and operated by the

state of Rhode Island.

     (9) “Outpatient net patient-services revenue” means the charges related to outpatient care

services less (i) Charges attributable to charity care; (ii) Bad debt expenses; and (iii) Contractual

allowances.

     (10) “Rehabilitative hospital” means Rehabilitation Hospital Center licensed by the

Rhode Island department of health.

     (11) “State-government owned and operated hospitals” means a hospital facility licensed

by the Rhode Island department of health, owned and operated by the state of Rhode Island.

     (j) The tax administrator in consultation with the executive office of health and human

services shall make and promulgate any rules, regulations, and procedures not inconsistent with

state law and fiscal procedures that he or she deems necessary for the proper administration of

this section and to carry out the provisions, policy, and purposes of this section.

     (k) The licensing fee imposed by subsections (a) through (f) shall apply to hospitals as

defined herein that are duly licensed on July 1, 20224, and shall be in addition to the inspection

fee imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with this

section.

     (l) The licensing fees imposed by subsections (b) through (f) shall apply to hospitals as

defined herein that are duly licensed on July 1, 2023, and shall be in addition to the inspection fee

imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with this

section.

     SECTION 2. Section 40-6-9.1 of the General Laws in Chapter 40-6 entitled "Public

Assistance Act" is hereby amended to read as follows: 

     § 40-6-9.1. Data matching — Healthcare coverages.

     (a) For purposes of this section, the term “medical assistance program” shall mean

medical assistance provided in whole or in part by the department of human services executive

office of health and human services pursuant to chapters 5.1, 8, 8.4 of this title, 12.3 of title 42

and/or Title XIX or XXI of the federal Social Security Act, as amended, 42 U.S.C. § 1396 et seq.

and 42 U.S.C. § 1397aa et seq., respectively. Any references to the department office shall be to

the department of human services executive office of health and human services.

     (b) In furtherance of the assignment of rights to medical support to the department of

human services executive office of health and human services under § 40-6-9(b), (c), (d), and (e),

and in order to determine the availability of other sources of healthcare insurance or coverage for

beneficiaries of the medical assistance program, and to determine potential third-party liability for

medical assistance paid out by the department office, all health insurers, health-maintenance

organizations, including managed care organizations, and third-party administrators, self-insured

plans, pharmacy benefit managers (PBM), and other parties that are by statute, contract, or

agreement, legally responsible for payment of a claim for a healthcare item of service doing

business in the state of Rhode Island shall permit and participate in data matching with the

department of human services executive office of health and human services, as provided in this

section, to assist the department office to identify medical assistance program applicants,

beneficiaries, and/or persons responsible for providing medical support for applicants and

beneficiaries who may also have healthcare insurance or coverage in addition to that provided, or

to be provided, by the medical assistance program and to determine any third-party liability in

accordance with this section.

     The department office shall take all reasonable measures to determine the legal liability

of all third parties (including health insurers, self-insured plans, group health plans (as defined in

§ 607(1) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. § 1167(1)]),

service benefit plans, health-maintenance organizations, managed care organizations, pharmacy

benefit managers, or other parties that are, by statute, contract, or agreement, legally responsible

for payment of a claim for a healthcare item or service), to pay for care and services on behalf of

a medical assistance recipient, including collecting sufficient information to enable the

department office to pursue claims against such third parties.

     In any case where such a legal liability is found to exist and medical assistance has been

made available on behalf of the individual (beneficiary), the department office shall seek

reimbursement for the assistance to the extent of the legal liability and in accordance with the

assignment described in § 40-6-9.

     To the extent that payment has been made by the department office for medical assistance

to a beneficiary in any case where a third party has a legal liability to make payment for the

assistance, and to the extent that payment has been made by the department office for medical

assistance for healthcare items or services furnished to an individual, the department office (state)

is considered to have acquired the rights of the individual to payment by any other party for the

healthcare items or services in accordance with § 40-6-9.

     Any health insurer (including a group health plan, as defined in § 607(1) of the

Employee Retirement Income Security Act of 1974 [29 U.S.C. § 1167(1)], a self-insured plan, a

service-benefit plan, a managed care organization, a pharmacy benefit manager, or other party

that is, by statute, contract, or agreement, legally responsible for payment of a claim for a

healthcare item or service), in enrolling an individual, or in making any payments for benefits to

the individual or on the individual’s behalf, is prohibited from taking into account that the

individual is eligible for, or is provided, medical assistance under a plan under 42 U.S.C. § 1396

et seq. for this state, or any other state.

     (c) All health insurers or liable third parties, including, but not limited to, health-

maintenance organizations, third-party administrators, nonprofit medical-service corporations,

nonprofit hospital-service corporations, subject to the provisions of chapters 18, 19, 20, and 41 of

title 27, as well as, self-insured plans, group health plans (as defined in § 607(1) of the Employee

Retirement Income Security Act of 1974 [29 U.S.C. § 1167(1)]), service-benefit plans, managed

care organizations, pharmacy benefit managers, or other parties that are, by statute, contract, or

agreement, legally responsible for payment of a claim for a healthcare item or service) doing

business in this state shall:

     (1) Provide member information within fourteen (14) calendar days of the request to the

department office to enable the medical assistance program to identify medical assistance

program recipients, applicants and/or persons responsible for providing medical support for those

recipients and applicants who are, or could be, enrollees or beneficiaries under any individual or

group health insurance contract, plan, or policy available or in force and effect in the state;

     (2) With respect to individuals who are eligible for, or are provided, medical assistance

by the department office, upon the request of the department office, provide member information

within fourteen (14) calendar days of the request to determine during what period the individual

or his or her spouse or dependents may be (or may have been) covered by a health insurer and the

nature of the coverage that is, or was provided by the health insurer (including the name, address,

and identifying number of the plan);

     (3) Accept the state’s right of recovery and the assignment to the state of any right of an

individual or other entity to payment from the party for an item or service for which payment has

been made by the department office;

     (4) Respond to any inquiry by the department office regarding a claim for payment for

any healthcare item or service that is submitted not later than three (3) years after the date of the

provision of the healthcare item or service; and

     (5) Agree not to deny a claim submitted by the state based solely on procedural reasons,

such as on the basis of the date of submission of the claim, the type or format of the claim form,

failure to obtain a prior authorization, or a failure to present proper documentation at the point-of-

sale that is the basis of the claim, if—

     (i) The claim is submitted by the state within the three-year (3) period beginning on the

date on which the item or service was furnished; and

     (ii) Any action by the state to enforce its rights with respect to the claim is commenced

within six (6) years of the state’s submission of such claim.

     (6) Agree to respond to any inquiry regarding claims within sixty (60) business days after

receipt of the written documentation by the Medicaid recipient.

     (7) Agree to not deny a claim for failure to obtain prior authorization for an item or

service. In the case of a responsible third party that requires prior authorization for an item or

service furnished to an individual eligible to receive medical assistance under the state Medicaid

program, the third-party health insurer shall accept authorization provided by state medical

assistance program that the item or service is covered by Medicaid as if that authorization is a

prior authorization made by the third-party health insurer for the item or service.

     (d) This information shall be made available by these insurers and health-maintenance

organizations and used by the department of human services executive office of health and human

services only for the purposes of, and to the extent necessary for, identifying these persons,

determining the scope and terms of coverage, and ascertaining third-party liability. The

department of human services executive office of health and human services shall provide

information to the health insurers, including health insurers, self-insured plans, group health plans

(as defined in § 607(1) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. § 

1167(1)]), service-benefit plans, managed care organizations, pharmacy benefit managers, or

other parties that are, by statute, contract, or agreement, legally responsible for payment of a

claim for a healthcare item or service) only for the purposes described herein.

     (e) No health insurer, health-maintenance organization, or third-party administrator that

provides, or makes arrangements to provide, information pursuant to this section shall be liable in

any civil or criminal action or proceeding brought by beneficiaries or members on account of this

action for the purposes of violating confidentiality obligations under the law.

     (f) The department office shall submit any appropriate and necessary state plan

provisions.

     (g) The department of human services executive office of health and human services is

authorized and directed to promulgate regulations necessary to ensure the effectiveness of this

section.

     SECTION 3. Section 40-8-13.4 of the General Laws in Chapter 40-8 entitled “Medical

Assistance” is hereby amended to read as follows:

     § 40-8-13.4. Rate methodology for payment for in-state and out-of-state hospital

services.

     (a) The executive office of health and human services (“executive office”) shall

implement a new methodology for payment for in-state and out-of-state hospital services in order

to ensure access to, and the provision of, high-quality and cost-effective hospital care to its

eligible recipients.

     (b) In order to improve efficiency and cost-effectiveness, the executive office shall:

     (1)(i) With respect to inpatient services for persons in fee-for-service Medicaid, which is

non-managed care, implement a new payment methodology for inpatient services utilizing the

Diagnosis Related Groups (DRG) method of payment, which is, a patient-classification method

that provides a means of relating payment to the hospitals to the type of patients cared for by the

hospitals. It is understood that a payment method based on DRG may include cost outlier

payments and other specific exceptions. The executive office will review the DRG-payment

method and the DRG base price annually, making adjustments as appropriate in consideration of

such elements as trends in hospital input costs; patterns in hospital coding; beneficiary access to

care; and the Centers for Medicare and Medicaid Services national CMS Prospective Payment

System (IPPS) Hospital Input Price Index. For the twelve-month (12) period beginning July 1,

2015, the DRG base rate for Medicaid fee-for-service inpatient hospital services shall not exceed

ninety-seven and one-half percent (97.5%) of the payment rates in effect as of July 1, 2014.

Beginning July 1, 2019, the DRG base rate for Medicaid fee-for-service inpatient hospital

services shall be 107.2% of the payment rates in effect as of July 1, 2018. Increases in the

Medicaid fee-for-service DRG hospital payments for the twelve-month (12) period beginning

July 1, 2020, shall be based on the payment rates in effect as of July 1 of the preceding fiscal

year, and shall be the Centers for Medicare and Medicaid Services national Prospective Payment

System (IPPS) Hospital Input Price Index. Beginning July 1, 2022, the DRG base rate for

Medicaid fee-for-service inpatient hospital services shall be one hundred five percent (105%) of

the payment rates in effect as of July 1, 2021. For the twelve-month period beginning July 1,

2025, the DRG base rate for Medicaid fee-for-service inpatient hospital services shall be one

hundred two and three-tenths percent (102.3%) of the payment rates in effect as of July 1, 2024.

Thereafter, Iincreases in the Medicaid fee-for-service DRG hospital payments for each annual

twelve-month (12) period beginning July 1, 20236, shall be based on the payment rates in effect

as of July 1 of the preceding fiscal year, and shall be the Centers for Medicare and Medicaid

Services national Prospective Payment System (IPPS) Hospital Input Price Index.,

     (ii) With respect to inpatient services, (A) It is required as of January 1, 2011, until

December 31, 2011, that the Medicaid managed care payment rates between each hospital and

health plan shall not exceed ninety and one-tenth percent (90.1%) of the rate in effect as of June

30, 2010. Increases in inpatient hospital payments for each annual twelve-month (12) period

beginning January 1, 2012, may not exceed the Centers for Medicare and Medicaid Services

national CMS Prospective Payment System (IPPS) Hospital Input Price Index for the applicable

period; (B) Provided, however, for the twenty-four-month (24) period beginning July 1, 2013, the

Medicaid managed care payment rates between each hospital and health plan shall not exceed the

payment rates in effect as of January 1, 2013, and for the twelve-month (12) period beginning

July 1, 2015, the Medicaid managed care payment inpatient rates between each hospital and

health plan shall not exceed ninety-seven and one-half percent (97.5%) of the payment rates in

effect as of January 1, 2013; (C) Increases in inpatient hospital payments for each annual twelve-

month (12) period beginning July 1, 2017, shall be the Centers for Medicare and Medicaid

Services national CMS Prospective Payment System (IPPS) Hospital Input Price Index, less

Productivity Adjustment, for the applicable period and shall be paid to each hospital retroactively

to July 1; (D) Beginning July 1, 2019, the Medicaid managed care payment inpatient rates

between each hospital and health plan shall be 107.2% of the payment rates in effect as of

January 1, 2019, and shall be paid to each hospital retroactively to July 1; (E) Increases in

inpatient hospital payments for each annual twelve-month (12) period beginning July 1, 2020,

shall be based on the payment rates in effect as of January 1 of the preceding fiscal year, and shall

be the Centers for Medicare and Medicaid Services national CMS Prospective Payment System

(IPPS) Hospital Input Price Index, less Productivity Adjustment, for the applicable period and

shall be paid to each hospital retroactively to July 1; the executive office will develop an audit

methodology and process to assure that savings associated with the payment reductions will

accrue directly to the Rhode Island Medicaid program through reduced managed care plan

payments and shall not be retained by the managed care plans; (F) Beginning July 1, 2022, the

Medicaid managed care payment inpatient rates between each hospital and health plan shall be

one hundred five percent (105%) of the payment rates in effect as of January 1, 2022, and shall be

paid to each hospital retroactively to July 1 within ninety days of passage; (G) For the twelve-

month period beginning July 1, 2025, the Medicaid managed care payment inpatient rates

between each hospital and health plan shall be one hundred two and three-tenths percent

(102.3%) of the payment rates in effect as of January 1, 2024, and shall be paid to each hospital

retroactively to July 1 within ninety days of passage; (H) Increases in inpatient hospital payments

for each annual twelve-month (12) period beginning July 1, 20236, shall be based on the payment

rates in effect as of January 1 of the preceding fiscal year, and shall be the Centers for Medicare

and Medicaid Services national CMS Prospective Payment System (IPPS) Hospital Input Price

Index, less Productivity Adjustment, for the applicable period and shall be paid to each hospital

retroactively to July 1 within ninety days of passage; (HI) All hospitals licensed in Rhode Island

shall accept such payment rates as payment in full; and (IJ) For all such hospitals, compliance

with the provisions of this section shall be a condition of participation in the Rhode Island

Medicaid program.

     (2) With respect to outpatient services and notwithstanding any provisions of the law to

the contrary, for persons enrolled in fee-for-service Medicaid, the executive office will reimburse

hospitals for outpatient services using a rate methodology determined by the executive office and

in accordance with federal regulations. Fee-for-service outpatient rates shall align with Medicare

payments for similar services. Notwithstanding the above, there shall be no increase in the

Medicaid fee-for-service outpatient rates effective on July 1, 2013, July 1, 2014, or July 1, 2015.

For the twelve-month (12) period beginning July 1, 2015, Medicaid fee-for-service outpatient

rates shall not exceed ninety-seven and one-half percent (97.5%) of the rates in effect as of July 1,

2014. Increases in the outpatient hospital payments for the twelve-month (12) period beginning

July 1, 2016, may not exceed the CMS national Outpatient Prospective Payment System (OPPS)

Hospital Input Price Index. Beginning July 1, 2019, the Medicaid fee-for-service outpatient rates

shall be 107.2% of the payment rates in effect as of July 1, 2018. Increases in the outpatient

hospital payments for the twelve-month (12) period beginning July 1, 2020, shall be based on the

payment rates in effect as of July 1 of the preceding fiscal year, and shall be the CMS national

Outpatient Prospective Payment System (OPPS) Hospital Input Price Index. Beginning July 1,

2022, the Medicaid fee-for-service outpatient rates shall be one hundred five percent (105%) of

the payment rates in effect as of July 1, 2021. For the twelve-month period beginning July 1,

2025, the Medicaid fee-for-service outpatient rates shall be one hundred two and three-tenths

percent (102.3%) of the payment rates in effect as of July 1, 2024. Increases in the outpatient

hospital payments for each annual twelve-month (12) period beginning July 1, 20236, shall be

based on the payment rates in effect as of July 1 of the preceding fiscal year, and shall be the

CMS national Outpatient Prospective Payment System (OPPS) Hospital Input Price Index. With

respect to the outpatient rate, (i) It is required as of January 1, 2011, until December 31, 2011,

that the Medicaid managed care payment rates between each hospital and health plan shall not

exceed one hundred percent (100%) of the rate in effect as of June 30, 2010; (ii) Increases in

hospital outpatient payments for each annual twelve-month (12) period beginning January 1,

2012, until July 1, 2017, may not exceed the Centers for Medicare and Medicaid Services

national CMS Outpatient Prospective Payment System OPPS Hospital Price Index for the

applicable period; (iii) Provided, however, for the twenty-four-month (24) period beginning July

1, 2013, the Medicaid managed care outpatient payment rates between each hospital and health

plan shall not exceed the payment rates in effect as of January 1, 2013, and for the twelve-month

(12) period beginning July 1, 2015, the Medicaid managed care outpatient payment rates between

each hospital and health plan shall not exceed ninety-seven and one-half percent (97.5%) of the

payment rates in effect as of January 1, 2013; (iv) Increases in outpatient hospital payments for

each annual twelve-month (12) period beginning July 1, 2017, shall be the Centers for Medicare

and Medicaid Services national CMS OPPS Hospital Input Price Index, less Productivity

Adjustment, for the applicable period and shall be paid to each hospital retroactively to July 1; (v)

Beginning July 1, 2019, the Medicaid managed care outpatient payment rates between each

hospital and health plan shall be one hundred seven and two-tenths percent (107.2%) of the

payment rates in effect as of January 1, 2019, and shall be paid to each hospital retroactively to

July 1; (vi) Increases in outpatient hospital payments for each annual twelve-month (12) period

beginning July 1, 2020, shall be based on the payment rates in effect as of January 1 of the

preceding fiscal year, and shall be the Centers for Medicare and Medicaid Services national CMS

OPPS Hospital Input Price Index, less Productivity Adjustment, for the applicable period and

shall be paid to each hospital retroactively to July 1; (vii) Beginning July 1, 2022, the Medicaid

managed care outpatient payment rates between each hospital and health plan shall be one

hundred five percent (105%) of the payment rates in effect as of January 1, 2022, and shall be

paid to each hospital retroactively to July 1 within ninety days of passage; (viii) For the twelve-

month period beginning July 1, 2025, the Medicaid managed care outpatient payment rates

between each hospital and health plan shall be one hundred two and three-tenths percent

(102.3%) of the payment rates in effect as of January 1, 2024, and shall be paid to each hospital

retroactively to July 1 within ninety days of passage; (ix) Increases in outpatient hospital

payments for each annual twelve-month (12) period beginning July 1, 20206, shall be based on

the payment rates in effect as of January 1 of the preceding fiscal year, and shall be the Centers

for Medicare and Medicaid Services national CMS OPPS Hospital Input Price Index, less

Productivity Adjustment, for the applicable period and shall be paid to each hospital retroactively

to July 1.

     (3) “Hospital,” as used in this section, shall mean the actual facilities and buildings in

existence in Rhode Island, licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter

any premises included on that license, regardless of changes in licensure status pursuant to

chapter 17.14 of title 23 (hospital conversions) and § 23-17-6(b) (change in effective control),

that provides short-term, acute inpatient and/or outpatient care to persons who require definitive

diagnosis and treatment for injury, illness, disabilities, or pregnancy. Notwithstanding the

preceding language, the Medicaid managed care payment rates for a court-approved purchaser

that acquires a hospital through receivership, special mastership or other similar state insolvency

proceedings (which court-approved purchaser is issued a hospital license after January 1, 2013),

shall be based upon the new rates between the court-approved purchaser and the health plan, and

such rates shall be effective as of the date that the court-approved purchaser and the health plan

execute the initial agreement containing the new rates. The rate-setting methodology for

inpatient-hospital payments and outpatient-hospital payments set forth in subsections (b)(1)(ii)(C)

and (b)(2), respectively, shall thereafter apply to increases for each annual twelve-month (12)

period as of July 1 following the completion of the first full year of the court-approved

purchaser’s initial Medicaid managed care contract.

     (c) It is intended that payment utilizing the DRG method shall reward hospitals for

providing the most efficient care, and provide the executive office the opportunity to conduct

value-based purchasing of inpatient care.

     (d) The secretary of the executive office is hereby authorized to promulgate such rules

and regulations consistent with this chapter, and to establish fiscal procedures he or she deems

necessary, for the proper implementation and administration of this chapter in order to provide

payment to hospitals using the DRG-payment methodology. Furthermore, amendment of the

Rhode Island state plan for Medicaid, pursuant to Title XIX of the federal Social Security Act, 42

U.S.C. § 1396 et seq., is hereby authorized to provide for payment to hospitals for services

provided to eligible recipients in accordance with this chapter.

     (e) The executive office shall comply with all public notice requirements necessary to

implement these rate changes.

     (f) As a condition of participation in the DRG methodology for payment of hospital

services, every hospital shall submit year-end settlement reports to the executive office within one

year from the close of a hospital’s fiscal year. Should a participating hospital fail to timely submit

a year-end settlement report as required by this section, the executive office shall withhold

financial-cycle payments due by any state agency with respect to this hospital by not more than

ten percent (10%) until the report is submitted. For hospital fiscal year 2010 and all subsequent

fiscal years, hospitals will not be required to submit year-end settlement reports on payments for

outpatient services. For hospital fiscal year 2011 and all subsequent fiscal years, hospitals will not

be required to submit year-end settlement reports on claims for hospital inpatient services.

Further, for hospital fiscal year 2010, hospital inpatient claims subject to settlement shall include

only those claims received between October 1, 2009, and June 30, 2010.

     (g) The provisions of this section shall be effective upon implementation of the new

payment methodology set forth in this section and § 40-8-13.3, which shall in any event be no

later than March 30, 2010, at which time the provisions of §§ 40-8-13.2, 27-19-14, 27-19-15, and

27-19-16 shall be repealed in their entirety.

     SECTION 4. Section 40-8-19 of the General Laws in Chapter 40-8 entitled “Medical

Assistance” is hereby amended to read as follows:

     § 40-8-19. Rates of payment to nursing facilities.

     (a) Rate reform.

     (1) The rates to be paid by the state to nursing facilities licensed pursuant to chapter 17 of

title 23, and certified to participate in Title XIX of the Social Security Act for services rendered to

Medicaid-eligible residents, shall be reasonable and adequate to meet the costs that must be

incurred by efficiently and economically operated facilities in accordance with 42 U.S.C. §

1396a(a)(13). The executive office of health and human services (“executive office”) shall

promulgate or modify the principles of reimbursement for nursing facilities in effect as of July 1,

2011, to be consistent with the provisions of this section and Title XIX, 42 U.S.C. § 1396 et seq.,

of the Social Security Act.

     (2) The executive office shall review the current methodology for providing Medicaid

payments to nursing facilities, including other long-term care services providers, and is

authorized to modify the principles of reimbursement to replace the current cost-based

methodology rates with rates based on a price-based methodology to be paid to all facilities with

recognition of the acuity of patients and the relative Medicaid occupancy, and to include the

following elements to be developed by the executive office:

     (i) A direct-care rate adjusted for resident acuity;

     (ii) An indirect-care and other direct-care rate comprised of a base per diem for all

facilities;

     (iii) Revision of rates as necessary based on increases in direct and indirect costs

beginning October 2024 utilizing data from the most recent finalized year of facility cost report.

The per diem rate components deferred in subsections (a)(2)(i) and (a)(2)(ii) of this section shall

be adjusted accordingly to reflect changes in direct and indirect care costs since the previous rate

review;

     (iv) Application of a fair-rental value system;

     (v) Application of a pass-through system; and

     (vi) Adjustment of rates by the change in a recognized national nursing home inflation

index to be applied on October 1 of each year, beginning October 1, 2012. This adjustment will

not occur on October 1, 2013, October 1, 2014, or October 1, 2015, but will occur on April 1,

2015. The adjustment of rates will also not occur on October 1, 2017, October 1, 2018, October 1,

2019, October 2022 and October 2025. Effective July 1, 2018, rates paid to nursing facilities from

the rates approved by the Centers for Medicare and Medicaid Services and in effect on October 1,

2017, both fee-for-service and managed care, will be increased by one and one-half percent

(1.5%) and further increased by one percent (1%) on October 1, 2018, and further increased by

one percent (1%) on October 1, 2019. Effective October 1, 2022, rates paid to nursing facilities

from the rates approved by the Centers for Medicare and Medicaid Services and in effect on

October 1, 2021, both fee-for-service and managed care, will be increased by three percent (3%).

In addition to the annual nursing home inflation index adjustment, there shall be a base rate

staffing adjustment of one-half percent (0.5%) on October 1, 2021, one percent (1.0%) on

October 1, 2022, and one and one-half percent (1.5%) on October 1, 2023. For the twelve-month

period beginning October 1, 2025, rates paid to nursing facilities from the rates approved by the

Centers for Medicare and Medicaid Services and in effect on October 1, 2024, both fee-for-

service and managed care, will be increased by two and three-tenths percent (2.3%). The

inflation index shall be applied without regard for the transition factors in subsections (b)(1) and

(b)(2). For purposes of October 1, 2016, adjustment only, any rate increase that results from

application of the inflation index to subsections (a)(2)(i) and (a)(2)(ii) shall be dedicated to

increase compensation for direct-care workers in the following manner: Not less than 85% of this

aggregate amount shall be expended to fund an increase in wages, benefits, or related employer

costs of direct-care staff of nursing homes. For purposes of this section, direct-care staff shall

include registered nurses (RNs), licensed practical nurses (LPNs), certified nursing assistants

(CNAs), certified medical technicians, housekeeping staff, laundry staff, dietary staff, or other

similar employees providing direct-care services; provided, however, that this definition of direct-

care staff shall not include: (i) RNs and LPNs who are classified as “exempt employees” under

the federal Fair Labor Standards Act (29 U.S.C. § 201 et seq.); or (ii) CNAs, certified medical

technicians, RNs, or LPNs who are contracted, or subcontracted, through a third-party vendor or

staffing agency. By July 31, 2017, nursing facilities shall submit to the secretary, or designee, a

certification that they have complied with the provisions of this subsection (a)(2)(vi) with respect

to the inflation index applied on October 1, 2016. Any facility that does not comply with the

terms of such certification shall be subjected to a clawback, paid by the nursing facility to the

state, in the amount of increased reimbursement subject to this provision that was not expended in

compliance with that certification.

     (3) Commencing on October 1, 2021, eighty percent (80%) of any rate increase that

results from application of the inflation index to subsections (a)(2)(i) and (a)(2)(ii) of this section

shall be dedicated to increase compensation for all eligible direct-care workers in the following

manner on October 1, of each year.

     (i) For purposes of this subsection, compensation increases shall include base salary or

hourly wage increases, benefits, other compensation, and associated payroll tax increases for

eligible direct-care workers. This application of the inflation index shall apply for Medicaid

reimbursement in nursing facilities for both managed care and fee-for-service. For purposes of

this subsection, direct-care staff shall include the director of nursing services, nurses (RNs/LPNs)

with administrative duties, registered nurses (RNs), licensed practical nurses (LPNs), certified

nursing assistants (CNAs), certified medication technicians, nurse aides in training, licensed

physical therapists, licensed occupational therapists, certified occupational therapy assistants,

licensed speech-language pathologists, licensed respiratory therapists, mental health workers who

are also certified nurse assistants, physical therapist assistants, housekeeping staff, laundry staff,

dietary staff, maintenance staff, social workers and activities director/aides or other similar

employees providing direct-care services; provided, however that this definition of direct-care

staff shall not include:

     (A) RNs and LPNs who are classified as “exempt employees” under the federal Fair

Labor Standards Act (29 U.S.C. § 201 et seq.); or

     (B) CNAs, certified medication technicians, RNs, or LPNs who are contracted or

subcontracted through a third-party vendor or staffing agency.

     (4)(i) By July 31, 2021, and July 31 of each year thereafter, nursing facilities shall submit

to the secretary or designee a certification that they have complied with the provisions of

subsection (a)(3) of this section with respect to the inflation index applied on October 1. The

executive office of health and human services (EOHHS) shall create the certification form

nursing facilities must complete with information on how each individual eligible employee’s

compensation increased, including information regarding hourly wages prior to the increase and

after the compensation increase, hours paid after the compensation increase, and associated

increased payroll taxes. A collective bargaining agreement can be used in lieu of the certification

form for represented employees. All data reported on the compliance form is subject to review

and audit by EOHHS. The audits may include field or desk audits, and facilities may be required

to provide additional supporting documents including, but not limited to, payroll records.

     (ii) Any facility that does not comply with the terms of certification shall be subjected to

a clawback and twenty-five percent (25%) penalty of the unspent or impermissibly spent funds,

paid by the nursing facility to the state, in the amount of increased reimbursement subject to this

provision that was not expended in compliance with that certification.

     (iii) In any calendar year where no inflationary index is applied, eighty percent (80%) of

the base rate staffing adjustment in that calendar year pursuant to subsection (a)(2)(vi) of this

section shall be dedicated to increase compensation for all eligible direct-care workers in the

manner referenced in subsections (a)(3)(i), (a)(3)(i)(A), and (a)(3)(i)(B) of this section.

     (b) Transition to full implementation of rate reform. For no less than four (4) years after

the initial application of the price-based methodology described in subsection (a)(2) to payment

rates, the executive office of health and human services shall implement a transition plan to

moderate the impact of the rate reform on individual nursing facilities. The transition shall

include the following components:

     (1) No nursing facility shall receive reimbursement for direct-care costs that is less than

the rate of reimbursement for direct-care costs received under the methodology in effect at the

time of passage of this act; for the year beginning October 1, 2017, the reimbursement for direct-

care costs under this provision will be phased out in twenty-five-percent (25%) increments each

year until October 1, 2021, when the reimbursement will no longer be in effect; and

     (2) No facility shall lose or gain more than five dollars ($5.00) in its total, per diem rate

the first year of the transition. An adjustment to the per diem loss or gain may be phased out by

twenty-five percent (25%) each year; except, however, for the years beginning October 1, 2015,

there shall be no adjustment to the per diem gain or loss, but the phase out shall resume

thereafter; and

     (3) The transition plan and/or period may be modified upon full implementation of

facility per diem rate increases for quality of care-related measures. Said modifications shall be

submitted in a report to the general assembly at least six (6) months prior to implementation.

     (4) Notwithstanding any law to the contrary, for the twelve-month (12) period beginning

July 1, 2015, Medicaid payment rates for nursing facilities established pursuant to this section

shall not exceed ninety-eight percent (98%) of the rates in effect on April 1, 2015. Consistent

with the other provisions of this chapter, nothing in this provision shall require the executive

office to restore the rates to those in effect on April 1, 2015, at the end of this twelve-month (12)

period.

     SECTION 5. Sections 40-8.3-2, 40-8.3-3, and 40-8.3-10 of the General Laws in Chapter

40-8.3 entitled "Uncompensated Care" are hereby amended to read as follows: 

     § 40-8.3-2. Definitions. As used in this chapter:

     (1) “Base year” means, for the purpose of calculating a disproportionate share payment

for any fiscal year ending after September 30, 2023 2024, the period from October 1, 2021 2022,

through September 30, 2022 2023, and for any fiscal year ending after September 30, 2024 2025,

the period from October 1, 2022 2023, through September 30, 2023 2024.

     (2) “Medicaid inpatient utilization rate for a hospital” means a fraction (expressed as a

percentage), the numerator of which is the hospital’s number of inpatient days during the base

year attributable to patients who were eligible for medical assistance during the base year and the

denominator of which is the total number of the hospital’s inpatient days in the base year.

     (3) “Participating hospital” means any nongovernment and nonpsychiatric hospital that:

     (i) Was licensed as a hospital in accordance with chapter 17 of title 23 during the base

year and shall mean the actual facilities and buildings in existence in Rhode Island, licensed

pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on that

license, regardless of changes in licensure status pursuant to chapter 17.14 of title 23 (hospital

conversions) and § 23-17-6(b) (change in effective control), that provides short-term, acute

inpatient and/or outpatient care to persons who require definitive diagnosis and treatment for

injury, illness, disabilities, or pregnancy. Notwithstanding the preceding language, the negotiated

Medicaid managed care payment rates for a court-approved purchaser that acquires a hospital

through receivership, special mastership, or other similar state insolvency proceedings (which

court-approved purchaser is issued a hospital license after January 1, 2013), shall be based upon

the newly negotiated rates between the court-approved purchaser and the health plan, and the

rates shall be effective as of the date that the court-approved purchaser and the health plan

execute the initial agreement containing the newly negotiated rate. The rate-setting methodology

for inpatient hospital payments and outpatient hospital payments set forth in §§ 40-8-

13.4(b)(1)(ii)(C) and 40-8-13.4(b)(2), respectively, shall thereafter apply to negotiated increases

for each annual twelve-month (12) period as of July 1 following the completion of the first full

year of the court-approved purchaser’s initial Medicaid managed care contract;

     (ii) Achieved a medical assistance inpatient utilization rate of at least one percent (1%)

during the base year; and

     (iii) Continues to be licensed as a hospital in accordance with chapter 17 of title 23 during

the payment year.

     (4) “Uncompensated-care costs” means, as to any hospital, the sum of: (i) The cost

incurred by the hospital during the base year for inpatient or outpatient services attributable to

charity care (free care and bad debts) for which the patient has no health insurance or other third-

party coverage less payments, if any, received directly from such patients; (ii) The cost incurred

by the hospital during the base year for inpatient or outpatient services attributable to Medicaid

beneficiaries less any Medicaid reimbursement received therefor; and (iii) the sum of subsections

(4)(i) and (4)(ii) of this section shall be offset by the estimated hospital’s commercial equivalent

rates state directed payment for the current SFY in which the disproportionate share hospital

(DSH) payment is made. The sum of subsections (4)(i), (4)(ii), and (4)(iii) of this section shall be

multiplied by the uncompensated care index.

     (5) “Uncompensated-care index” means the annual percentage increase for hospitals

established pursuant to § 27-19-14 [repealed] for each year after the base year, up to and

including the payment year; provided, however, that the uncompensated-care index for the

payment year ending September 30, 2007, shall be deemed to be five and thirty-eight hundredths

percent (5.38%), and that the uncompensated-care index for the payment year ending September

30, 2008, shall be deemed to be five and forty-seven hundredths percent (5.47%), and that the

uncompensated-care index for the payment year ending September 30, 2009, shall be deemed to

be five and thirty-eight hundredths percent (5.38%), and that the uncompensated-care index for

the payment years ending September 30, 2010, September 30, 2011, September 30, 2012,

September 30, 2013, September 30, 2014, September 30, 2015, September 30, 2016, September

30, 2017, September 30, 2018, September 30, 2019, September 30, 2020, September 30, 2021,

September 30, 2022, September 30, 2023, September 30, 2024, and September 30, 2025, and

September 30, 2026, shall be deemed to be five and thirty hundredths percent (5.30%).

     § 40-8.3-3. Implementation.

     (a) For federal fiscal year 2023, commencing on October 1, 2022, and ending September

30, 2023, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$159.0 million, shall be allocated by the executive office of health and human services to the Pool

D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital’s uncompensated-care costs for the base

year, inflated by the uncompensated-care index to the total uncompensated-care costs for the base

year inflated by the uncompensated-care index for all participating hospitals. The

disproportionate share payments shall be made on or before June 15, 2023, and are expressly

conditioned upon approval on or before June 23, 2023, by the Secretary of the United States

Department of Health and Human Services, or his or her authorized representative, of all

Medicaid state plan amendments necessary to secure for the state the benefit of federal financial

participation in federal fiscal year 2023 for the disproportionate share payments.

     (b)(a) For federal fiscal year 2024, commencing on October 1, 2023, and ending

September 30, 2024, the executive office of health and human services shall submit to the

Secretary of the United States Department of Health and Human Services a state plan amendment

to the Rhode Island Medicaid DSH Plan to provide:

     (1) That the DSH Plan to all participating hospitals, not to exceed an aggregate limit of

$14.8 million, shall be allocated by the executive office of health and human services to the Pool

D component of the DSH Plan; and

     (2) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital’s uncompensated-care costs for the base

year, inflated by the uncompensated-care index to the total uncompensated-care costs for the base

year inflated by the uncompensated-care index for all participating hospitals. The

disproportionate share payments shall be made on or before June 30, 2024, and are expressly

conditioned upon approval on or before June 23, 2024, by the Secretary of the United States

Department of Health and Human Services, or his or her authorized representative, of all

Medicaid state plan amendments necessary to secure for the state the benefit of federal financial

participation in federal fiscal year 2024 for the disproportionate share payments.

     (c)(b) For federal fiscal year 2025, commencing on October 1, 2024, and ending

September 30, 2025, the executive office of health and human services shall submit to the

Secretary of the United States Department of Health and Human Services a state plan amendment

to the Rhode Island Medicaid DSH plan to provide:

     (1) The creation of Pool C which allots no more than nineteen million nine hundred

thousand dollars ($19,900,000) twelve million nine hundred thousand dollars ($12,900,000) to

Medicaid eligible government-owned hospitals;

     (2) That the DSH plan to all participating hospitals, not to exceed an aggregate limit of

$34.7 $27.7 million, shall be allocated by the executive office of health and human services to the

Pool C and D components of the DSH plan;

     (3) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital’s uncompensated-care costs for the base

year, inflated by the uncompensated-care index to the total uncompensated-care costs for the base

year inflated by the uncompensated-care index of all participating hospitals. The disproportionate

share payments shall be made on or before June 30, 2025, and are expressly conditioned upon

approval on or before June 23, 2025, by the Secretary of the United States Department of Health

and Human Services, or their authorized representative, of all Medicaid state plan amendments

necessary to secure for the state the benefit of federal financial participation in federal fiscal year

2025 for the disproportionate share payments; and

     (4) That the Pool C allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital’s uncompensated-care costs for the base

year, inflated by the uncompensated-care index to the total uncompensated-care cost for the base

year inflated by the uncompensated-care index of all participating hospitals. The disproportionate

share payments shall be made on or before June 30, 2025, and are expressly conditioned upon

approval on or before June 23, 2025, by the Secretary of the United States Department of Health

and Human Services, or their authorized representative, of all Medicaid state plan amendments

necessary to secure for the state the benefit of federal financial participation in federal fiscal year

2025 for the disproportionate share payments.

     (c) For federal fiscal year 2026, commencing on October 1, 2025, and ending September

30, 2026, the executive office of health and human services shall submit to the Secretary of the

United States Department of Health and Human Services a state plan amendment to the Rhode

Island Medicaid DSH plan to provide:

     (1) That the DSH plan to all participating hospitals, not to exceed an aggregate limit of

$13.9 million, shall be allocated by the executive office of health and human services to the Pool

C and D components of the DSH plan. Pool C shall not exceed and aggregate limit of $12.9

million. Pool D shall not exceed and aggregate limit of $1.0 million.

     (2) That the Pool C allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital’s uncompensated-care costs for the base

year, inflated by the uncompensated-care index to the total uncompensated-care cost for the base

year inflated by the uncompensated-care index of all participating hospitals. The disproportionate

share payments shall be made on or before June 30, 2026, and are expressly conditioned upon

approval on or before June 23, 2026, by the Secretary of the United States Department of Health

and Human Services, or their authorized representative, of all Medicaid state plan amendments

necessary to secure for the state the benefit of federal financial participation in federal fiscal year

2026 for the disproportionate share payments; and

     (3) That the Pool D allotment shall be distributed among the participating hospitals in

direct proportion to the individual participating hospital’s uncompensated-care costs for the base

year, inflated by the uncompensated-care index to the total uncompensated-care costs for the base

year inflated by the uncompensated-care index of all participating hospitals. The disproportionate

share payments shall be made on or before June 30, 2026, and are expressly conditioned upon

approval on or before June 23, 2026, by the Secretary of the United States Department of Health

and Human Services, or their authorized representative, of all Medicaid state plan amendments

necessary to secure for the state the benefit of federal financial participation in federal fiscal year

2026 for the disproportionate share payments.

     (d) No provision is made pursuant to this chapter for disproportionate-share hospital

payments to participating hospitals for uncompensated-care costs related to graduate medical

education programs.

     (e) The executive office of health and human services is directed, on at least a monthly

basis, to collect patient-level uninsured information, including, but not limited to, demographics,

services rendered, and reason for uninsured status from all hospitals licensed in Rhode Island.

     (f) [Deleted by P.L. 2019, ch. 88, art. 13, § 6.]

     § 40-8.3-10. Hospital Adjustment Payments.

     Effective July 1, 2021, and for each subsequent year, through state fiscal year 2025, the

executive office of health and human services is hereby authorized and directed to amend its

regulations for reimbursement to hospitals for inpatient and outpatient services as follows:

     (a) Each hospital in the state of Rhode Island, as defined in § 23-17-38.1, shall receive a

quarterly outpatient adjustment payment each state fiscal year of an amount determined as

follows:

     (1) Determine the percent of the state’s total Medicaid outpatient and emergency

department services (exclusive of physician services) provided by each hospital during each

hospital’s prior fiscal year;

     (2) Determine the sum of all Medicaid payments to hospitals made for outpatient and

emergency department services (exclusive of physician services) provided during each hospital’s

prior fiscal year;

     (3) Multiply the sum of all Medicaid payments as determined in subsection (a)(2) by a

percentage defined as the total identified upper payment limit for all hospitals divided by the sum

of all Medicaid payments as determined in subsection (a)(2); and then multiply that result by each

hospital’s percentage of the state’s total Medicaid outpatient and emergency department services

as determined in subsection (a)(1) to obtain the total outpatient adjustment for each hospital to be

paid each year;

     (4) Pay each hospital on or before July 20, October 20, January 20, and April 20 one

quarter (1/4) of its total outpatient adjustment as determined in subsection (a)(3).

     (b) [Deleted by P.L. 2019, ch. 88, art. 13, § 6.]

     (c) Each hospital in the state of Rhode Island, as defined in § 23-17-38.1, shall receive a

quarterly inpatient adjustment payment each state fiscal year of an amount determined as follows:

     (1) Determine the percent of the state’s total Medicaid inpatient services (exclusive of

physician services) provided by each hospital during each hospital’s prior fiscal year;

     (2) Determine the sum of all Medicaid payments to hospitals made for inpatient services

(exclusive of physician services) provided during each hospital’s prior fiscal year;

     (3) Multiply the sum of all Medicaid payments as determined in subsection (c)(2) by a

percentage defined as the total identified upper payment limit for all hospitals divided by the sum

of all Medicaid payments as determined in subsection (c)(2); and then multiply that result by each

hospital’s percentage of the state’s total Medicaid inpatient services as determined in subsection

(c)(1) to obtain the total inpatient adjustment for each hospital to be paid each year;

     (4) Pay each hospital on or before July 20, October 20, January 20, and April 20 one

quarter (1/4) of its total inpatient adjustment as determined in subsection (c)(3).

     (d) The amounts determined in subsections (a) and (c) are in addition to Medicaid

inpatient and outpatient payments and emergency services payments (exclusive of physician

services) paid to hospitals in accordance with current state regulation and the Rhode Island Plan

for Medicaid Assistance pursuant to Title XIX of the Social Security Act and are not subject to

recoupment or settlement.

     SECTION 6. Section 40-8.9-9 of the General Laws in Chapter 40-8.9 entitled “Medical

Assistance — Long-Term Care Service and Finance Reform” is hereby amended to read as

follows:

     § 40-8.9-9. Long-term-care rebalancing system reform goal.

     (a) Notwithstanding any other provision of state law, the executive office of health and

human services is authorized and directed to apply for, and obtain, any necessary waiver(s), waiver

amendment(s), and/or state-plan amendments from the Secretary of the United States Department

of Health and Human Services, and to promulgate rules necessary to adopt an affirmative plan of

program design and implementation that addresses the goal of allocating a minimum of fifty percent

(50%) of Medicaid long-term-care funding for persons aged sixty-five (65) and over and adults

with disabilities, in addition to services for persons with developmental disabilities, to home- and

community-based care; provided, further, the executive office shall report annually as part of its

budget submission, the percentage distribution between institutional care and home- and

community-based care by population and shall report current and projected waiting lists for long-

term-care and home- and community-based care services. The executive office is further authorized

and directed to prioritize investments in home- and community-based care and to maintain the

integrity and financial viability of all current long-term-care services while pursuing this goal.

     (b) The reformed long-term-care system rebalancing goal is person-centered and

encourages individual self-determination, family involvement, interagency collaboration, and

individual choice through the provision of highly specialized and individually tailored home-based

services. Additionally, individuals with severe behavioral, physical, or developmental disabilities

must have the opportunity to live safe and healthful lives through access to a wide range of

supportive services in an array of community-based settings, regardless of the complexity of their

medical condition, the severity of their disability, or the challenges of their behavior. Delivery of

services and supports in less-costly and less-restrictive community settings will enable children,

adolescents, and adults to be able to curtail, delay, or avoid lengthy stays in long-term-care

institutions, such as behavioral health residential-treatment facilities, long-term-care hospitals,

intermediate-care facilities, and/or skilled nursing facilities.

     (c) Pursuant to federal authority procured under § 42-7.2-16, the executive office of health

and human services is directed and authorized to adopt a tiered set of criteria to be used to determine

eligibility for services. The criteria shall be developed in collaboration with the state’s health and

human services departments and, to the extent feasible, any consumer group, advisory board, or

other entity designated for these purposes, and shall encompass eligibility determinations for long-

term-care services in nursing facilities, hospitals, and intermediate-care facilities for persons with

intellectual disabilities, as well as home- and community-based alternatives, and shall provide a

common standard of income eligibility for both institutional and home- and community-based care.

The executive office is authorized to adopt clinical and/or functional criteria for admission to a

nursing facility, hospital, or intermediate-care facility for persons with intellectual disabilities that

are more stringent than those employed for access to home- and community-based services. The

executive office is also authorized to promulgate rules that define the frequency of re-assessments

for services provided for under this section. Levels of care may be applied in accordance with the

following:

     (1) The executive office shall continue to apply the level-of-care criteria in effect on

April 1, 2021, for any recipient determined eligible for and receiving Medicaid-funded long-term

services and supports in a nursing facility, hospital, or intermediate-care facility for persons with

intellectual disabilities on or before that date, unless:

     (i) The recipient transitions to home- and community-based services because he or she

would no longer meet the level-of-care criteria in effect on April 1, 2021; or

     (ii) The recipient chooses home- and community-based services over the nursing facility,

hospital, or intermediate-care facility for persons with intellectual disabilities. For the purposes of

this section, a failed community placement, as defined in regulations promulgated by the

executive office, shall be considered a condition of clinical eligibility for the highest level of care.

The executive office shall confer with the long-term-care ombudsperson with respect to the

determination of a failed placement under the ombudsperson’s jurisdiction. Should any Medicaid

recipient eligible for a nursing facility, hospital, or intermediate-care facility for persons with

intellectual disabilities as of April 1, 2021, receive a determination of a failed community

placement, the recipient shall have access to the highest level of care; furthermore, a recipient

who has experienced a failed community placement shall be transitioned back into his or her

former nursing home, hospital, or intermediate-care facility for persons with intellectual

disabilities whenever possible. Additionally, residents shall only be moved from a nursing home,

hospital, or intermediate-care facility for persons with intellectual disabilities in a manner

consistent with applicable state and federal laws.

     (2) Any Medicaid recipient eligible for the highest level of care who voluntarily leaves a

nursing home, hospital, or intermediate-care facility for persons with intellectual disabilities shall

not be subject to any wait list for home- and community-based services.

     (3) No nursing home, hospital, or intermediate-care facility for persons with intellectual

disabilities shall be denied payment for services rendered to a Medicaid recipient on the grounds

that the recipient does not meet level-of-care criteria unless and until the executive office has:

     (i) Performed an individual assessment of the recipient at issue and provided written

notice to the nursing home, hospital, or intermediate-care facility for persons with intellectual

disabilities that the recipient does not meet level-of-care criteria; and

     (ii) The recipient has either appealed that level-of-care determination and been

unsuccessful, or any appeal period available to the recipient regarding that level-of-care

determination has expired.

     (d) The executive office is further authorized to consolidate all home- and community-

based services currently provided pursuant to 42 U.S.C. § 1396n into a single system of home-

and community-based services that include options for consumer direction and shared living. The

resulting single home- and community-based services system shall replace and supersede all 42

U.S.C. § 1396n programs when fully implemented. Notwithstanding the foregoing, the resulting

single program home- and community-based services system shall include the continued funding

of assisted-living services at any assisted-living facility financed by the Rhode Island housing and

mortgage finance corporation prior to January 1, 2006, and shall be in accordance with chapter

66.8 of title 42 as long as assisted-living services are a covered Medicaid benefit.

     (e) The executive office is authorized to promulgate rules that permit certain optional

services including, but not limited to, homemaker services, home modifications, respite, and

physical therapy evaluations to be offered to persons at risk for Medicaid-funded long-term care

subject to availability of state-appropriated funding for these purposes.

     (f) To promote the expansion of home- and community-based service capacity, the

executive office is authorized to pursue payment methodology reforms that increase access to

homemaker, personal care (home health aide), assisted living, adult supportive-care homes, and

adult day services, as follows:

     (1) Development of revised or new Medicaid certification standards that increase access

to service specialization and scheduling accommodations by using payment strategies designed to

achieve specific quality and health outcomes.

     (2) Development of Medicaid certification standards for state-authorized providers of

adult day services, excluding providers of services authorized under § 40.1-24-1(3), assisted

living, and adult supportive care (as defined under chapter 17.24 of title 23) that establish for

each, an acuity-based, tiered service and payment methodology tied to: licensure authority; level

of beneficiary needs; the scope of services and supports provided; and specific quality and

outcome measures.

     The standards for adult day services for persons eligible for Medicaid-funded long-term

services may differ from those who do not meet the clinical/functional criteria set forth in § 40-

8.10-3.

     (3) As the state’s Medicaid program seeks to assist more beneficiaries requiring long-

term services and supports in home- and community-based settings, the demand for home-care

workers has increased, and wages for these workers has not kept pace with neighboring states,

leading to high turnover and vacancy rates in the state’s home-care industry, the executive office

shall institute a one-time increase in the base-payment rates for FY 2019, as described below, for

home-care service providers to promote increased access to and an adequate supply of highly

trained home-healthcare professionals, in amount to be determined by the appropriations process,

for the purpose of raising wages for personal care attendants and home health aides to be

implemented by such providers.

     (i) A prospective base adjustment, effective not later than July 1, 2018, of ten percent

(10%) of the current base rate for home-care providers, home nursing care providers, and hospice

providers contracted with the executive office of health and human services and its subordinate

agencies to deliver Medicaid fee-for-service personal care attendant services.

     (ii) A prospective base adjustment, effective not later than July 1, 2018, of twenty percent

(20%) of the current base rate for home-care providers, home nursing care providers, and hospice

providers contracted with the executive office of health and human services and its subordinate

agencies to deliver Medicaid fee-for-service skilled nursing and therapeutic services and hospice

care.

     (iii) Effective upon passage of this section, hospice provider reimbursement, exclusively

for room and board expenses for individuals residing in a skilled nursing facility, shall revert to

the rate methodology in effect on June 30, 2018, and these room and board expenses shall be

exempted from any and all annual rate increases to hospice providers as provided for in this

section.

     (iv) On the first of July in each year, beginning on July 1, 2019, the executive office of

health and human services will initiate an annual inflation increase to the base rate for home-care

providers, home nursing care providers, and hospice providers contracted with the executive

office and its subordinate agencies to deliver Medicaid fee-for-service personal care attendant

services, skilled nursing and therapeutic services and hospice care. The base rate increase shall be

a percentage amount equal to the New England Consumer Price Index card as determined by the

United States Department of Labor for medical care and for compliance with all federal and state

laws, regulations, and rules, and all national accreditation program requirements., except as of

July 1, 2025, and thereafter, when no annual inflation increase shall occur for these rates.

     (g) As the state’s Medicaid program seeks to assist more beneficiaries requiring long-

term services and supports in home- and community-based settings, the demand for home-care

workers has increased, and wages for these workers has not kept pace with neighboring states,

leading to high turnover and vacancy rates in the state’s home-care industry. To promote

increased access to and an adequate supply of direct-care workers, the executive office shall

institute a payment methodology change, in Medicaid fee-for-service and managed care, for FY

2022, that shall be passed through directly to the direct-care workers’ wages who are employed

by home nursing care and home-care providers licensed by the Rhode Island department of

health, as described below:

     (1) Effective July 1, 2021, increase the existing shift differential modifier by $0.19 per

fifteen (15) minutes for personal care and combined personal care/homemaker.

     (i) Employers must pass on one hundred percent (100%) of the shift differential modifier

increase per fifteen-minute (15) unit of service to the CNAs who rendered such services. This

compensation shall be provided in addition to the rate of compensation that the employee was

receiving as of June 30, 2021. For an employee hired after June 30, 2021, the agency shall use not

less than the lowest compensation paid to an employee of similar functions and duties as of June

30, 2021, as the base compensation to which the increase is applied.

     (ii) Employers must provide to EOHHS an annual compliance statement showing wages

as of June 30, 2021, amounts received from the increases outlined herein, and compliance with

this section by July 1, 2022. EOHHS may adopt any additional necessary regulations and

processes to oversee this subsection.

     (2) Effective January 1, 2022, establish a new behavioral healthcare enhancement of

$0.39 per fifteen (15) minutes for personal care, combined personal care/homemaker, and

homemaker only for providers who have at least thirty percent (30%) of their direct-care workers

(which includes certified nursing assistants (CNA) and homemakers) certified in behavioral

healthcare training.

     (i) Employers must pass on one hundred percent (100%) of the behavioral healthcare

enhancement per fifteen (15) minute unit of service rendered by only those CNAs and

homemakers who have completed the thirty (30) hour behavioral health certificate training

program offered by Rhode Island College, or a training program that is prospectively determined

to be compliant per EOHHS, to those CNAs and homemakers. This compensation shall be

provided in addition to the rate of compensation that the employee was receiving as of December

31, 2021. For an employee hired after December 31, 2021, the agency shall use not less than the

lowest compensation paid to an employee of similar functions and duties as of December 31,

2021, as the base compensation to which the increase is applied.

     (ii) By January 1, 2023, employers must provide to EOHHS an annual compliance

statement showing wages as of December 31, 2021, amounts received from the increases outlined

herein, and compliance with this section, including which behavioral healthcare training

programs were utilized. EOHHS may adopt any additional necessary regulations and processes to

oversee this subsection.

     (h) The executive office shall implement a long-term-care-options counseling program to

provide individuals, or their representatives, or both, with long-term-care consultations that shall

include, at a minimum, information about: long-term-care options, sources, and methods of both

public and private payment for long-term-care services and an assessment of an individual’s

functional capabilities and opportunities for maximizing independence. Each individual admitted

to, or seeking admission to, a long-term-care facility, regardless of the payment source, shall be

informed by the facility of the availability of the long-term-care-options counseling program and

shall be provided with long-term-care-options consultation if they so request. Each individual

who applies for Medicaid long-term-care services shall be provided with a long-term-care

consultation.

     (i) The executive office shall implement, no later than January 1, 2024, a statewide

network and rate methodology for conflict-free case management for individuals receiving

Medicaid-funded home and community-based services. The executive office shall coordinate

implementation with the state’s health and human services departments and divisions authorized

to deliver Medicaid-funded home and community-based service programs, including the

department of behavioral healthcare, developmental disabilities and hospitals; the department of

human services; and the office of healthy aging. It is in the best interest of the Rhode Islanders

eligible to receive Medicaid home and community-based services under this chapter, title 40.1,

title 42, or any other general laws to provide equitable access to conflict-free case management

that shall include person-centered planning, service arranging, and quality monitoring in the

amount, duration, and scope required by federal law and regulations. It is necessary to ensure that

there is a robust network of qualified conflict-free case management entities with the capacity to

serve all participants on a statewide basis and in a manner that promotes choice, self-reliance, and

community integration. The executive office, as the designated single state Medicaid authority

and agency responsible for coordinating policy and planning for health and human services under

§ 42-7.2-1 et seq., is directed to establish a statewide conflict-free case management network

under the management of the executive office and to seek any Medicaid waivers, state plan

amendments, and changes in rules, regulations, and procedures that may be necessary to ensure

that recipients of Medicaid home and community-based services have access to conflict-free case

management in a timely manner and in accordance with the federal requirements that must be met

to preserve financial participation.

     (j) The executive office is also authorized, subject to availability of appropriation of

funding, and federal, Medicaid-matching funds, to pay for certain services and supports necessary

to transition or divert beneficiaries from institutional or restrictive settings and optimize their

health and safety when receiving care in a home or the community. The secretary is authorized to

obtain any state plan or waiver authorities required to maximize the federal funds available to

support expanded access to home- and community-transition and stabilization services; provided,

however, payments shall not exceed an annual or per-person amount.

     (k) To ensure persons with long-term-care needs who remain living at home have

adequate resources to deal with housing maintenance and unanticipated housing-related costs, the

secretary is authorized to develop higher resource eligibility limits for persons or obtain any state

plan or waiver authorities necessary to change the financial eligibility criteria for long-term

services and supports to enable beneficiaries receiving home and community waiver services to

have the resources to continue living in their own homes or rental units or other home-based

settings.

     (l) The executive office shall implement, no later than January 1, 2016, the following

home- and community-based service and payment reforms:

     (1) [Deleted by P.L. 2021, ch. 162, art. 12, § 6.]

     (2) Adult day services level of need criteria and acuity-based, tiered-payment

methodology; and

     (3) Payment reforms that encourage home- and community-based providers to provide

the specialized services and accommodations beneficiaries need to avoid or delay institutional

care.

     (m) The secretary is authorized to seek any Medicaid section 1115 waiver or state-plan

amendments and take any administrative actions necessary to ensure timely adoption of any new

or amended rules, regulations, policies, or procedures and any system enhancements or changes,

for which appropriations have been authorized, that are necessary to facilitate implementation of

the requirements of this section by the dates established. The secretary shall reserve the discretion

to exercise the authority established under §§ 42-7.2-5(6)(v) and 42-7.2-6.1, in consultation with

the governor, to meet the legislative directives established herein.

     SECTION 7. Sections 40-8.10-2, 40-8.10-3, and 40-8.10-4 of the General Laws in

Chapter 40-8.10 entitled "Long-Term Care Service Reform for Medicaid Eligible Individuals" are

hereby amended to read as follows: 

     § 40-8.10-2. Definitions. 

     As used in this chapter: 

     (1) “Core services” mean homemaker services, environmental modifications (home

accessibility adaptations, special medical equipment (minor assistive devices), meals on wheels

(home delivered meals), personal emergency response (PERS), licensed practical nurse services,

community transition services, residential supports, day supports, supported employment,

supported living arrangements, private duty nursing, supports for consumer direction (supports

facilitation), participant directed goods and services, case management, senior companion

services, assisted living, personal care assistance services and respite. 

     (2) “Preventive services” mean homemaker services, minor environmental modifications,

physical therapy evaluation and services, and respite services. 

      § 40-8.10-3. Levels of care. 

     (a) The secretary of the executive office of health and human services shall coordinate

responsibilities for long-term-care assessment in accordance with the provisions of this chapter.

Importance shall be placed upon the proper and consistent determination of levels of care across

the state departments for each long-term-care setting, including behavioral health residential

treatment facilities, long-term-care hospitals, intermediate-care facilities, and/or skilled nursing

facilities. Specialized plans of care that meet the needs of the individual Medicaid recipients shall

be coordinated and consistent across all state departments. The development of care plans shall be

person-centered and shall support individual self-determination, family involvement, when

appropriate, individual choice, and interdepartmental collaboration. 

     (b) Levels of care for long-term-care institutions (behavioral health residential treatment

facilities, long-term-care hospitals, intermediate-care facilities and/or skilled nursing facilities),

for which alternative community-based services and supports are available, shall be established

pursuant to § 40-8.9-9. The structure of the three (3) two (2) levels of care is as follows: 

     (1) Highest level of care. Individuals who are determined, based on medical need, to

require the institutional level of care will have the choice to receive services in a long-term-care

institution or in a home- and community-based setting. 

     (2) High level of care. Individuals who are determined, based on medical need, to benefit

from home- and community-based services. 

     (3) Preventive level of care. Individuals who do not presently need an institutional level

of care but who need services targeted at preventing admission, re-admissions, or reducing

lengths of stay in an institution. 

     (c) Determinations of levels of care and the provision of long-term-care health services

shall be determined in accordance with this section and shall be in accordance with the applicable

provisions of § 40-8.9-9. 

      § 40-8.10-4. Long-term care assessment and coordination.

     (a) The executive office of health and human services shall implement a long-term-care-

options counseling program to provide individuals or their representative, or both, with long-term

care consultations that shall include, at a minimum, information about long-term-care options,

sources and methods of both public and private payment for long term-care services; information

on caregiver support services, including respite care; and an assessment of an individual's

functional capabilities and opportunities for maximizing independence. Each individual admitted

to or seeking admission to a long-term care facility, regardless of the payment source, shall be

informed by the facility of the availability of the long-term-care-options counseling program and

shall be provided with a long-term-care-options consultation, if he or she so requests. Each

individual who applies for Medicaid long-term care services shall be provided with a long-term

care consultation.

     (b) Core and preventative home- and community-based services defined and delineated in

§ 40-8.10-2 shall be provided only to those individuals who meet one of the levels of care

provided for in this chapter. Other long-term care services authorized by the federal government,

such as medication management, may also be provided to Medicaid-eligible recipients who have

established the requisite need.

     (c) The assessments for individuals conducted in accordance with this section shall serve

as the basis for individual budgets for those medical assistance recipients eligible to receive

services utilizing a self-directed delivery system.

     (d) Nothing in this section shall prohibit the secretary of the executive office of health

and human services, or the directors of that office's departments from utilizing community

agencies or contractors when appropriate to perform assessment functions outlined in this chapter.

     SECTION 8. Sections 42-14.5-2.1 and 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" are

hereby amended to read as follows:

     § 42-14.5-2.1. Definitions.

     As used in this chapter:

     (1) “Accountability standards” means measures including service processes, client and

population outcomes, practice standard compliance and fiscal integrity of social and human service

providers on the individual contractual level and service type for all state contacts of the state or

any subdivision or agency to include, but not limited to, the department of children, youth and

families (DCYF), the department of behavioral healthcare, developmental disabilities and hospitals

(BHDDH), the department of human services (DHS), the department of health (DOH), and

Medicaid. This may include mandatory reporting, consolidated, standardized reporting, audits

regardless of organizational tax status, and accountability dashboards of aforementioned state

departments or subdivisions that are regularly shared with the public.

     (2) “Executive Office of Health and Human Services (EOHHS)” means the department

that serves as “principal agency of the executive branch of state government” (§ 42-7.2-2)

responsible for managing the departments and offices of: health (RIDOH), human services (DHS),

healthy aging (OHA), veterans services (VETS), children, youth and families (DCYF), and

behavioral healthcare, developmental disabilities and hospitals (BHDDH). EOHHS is also

designated as the single state agency with authority to administer the Medicaid program in Rhode

Island.

     (3) "Primary care services" means, for the purposes of the biennial review required under

§ 42-14.5-3(t), professional services rendered by primary care providers at a primary care site of

care, including care management services performed in the context of team-based primary care.

     (3) (4) “Rate review” means the process of reviewing and reporting of specific trending

factors that influence the cost of service that informs rate setting.

     (4) (5) “Rate setting” means the process of establishing rates for social and human service

programs that are based on a thorough rate review process.

     (5) (6) “Social and human service program” means a social, mental health, developmental

disability, child welfare, juvenile justice, prevention services, habilitative, rehabilitative, substance

use disorder treatment, residential care, adult or adolescent day services, vocational, employment

and training, or aging service program or accommodations purchased by the state.

     (6) (7) “Social and human service provider” means a provider of social and human service

programs pursuant to a contract with the state or any subdivision or agency to include, but not be

limited to, the department of children, youth and families (DCYF), the department of behavioral

healthcare, developmental disabilities and hospitals (BHDDH), the department of human services

(DHS), the department of health (DOH), and Medicaid.

     (7) (8) “State government and the provider network” refers to the contractual relationship

between a state agency or subdivision of a state agency and private companies the state contracts

with to provide the network of mandated and discretionary social and human services.

     § 42-14.5-3. Powers and duties.

     The health insurance commissioner shall have the following powers and duties:

     (a) To conduct quarterly public meetings throughout the state, separate and distinct from

rate hearings pursuant to § 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, patients, and the market environment in which the insurers

operate; and efforts to bring new health insurers into the Rhode Island market. Notice of not less

than ten (10) days of the 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, the attorney

general, and the chambers of commerce. Public notice shall be posted on the department’s website

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 house of representatives and senate

finance committees regarding healthcare 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 governor or

chairpersons of the house or senate finance committees, draft legislation to improve the regulation

of health insurance. In making the 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 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 develop proposals to allow the market for small business health

insurance to be affordable and fairer. The council shall be involved in the planning and conduct of

the quarterly public meetings in accordance with subsection (a). The advisory council shall develop

measures to inform small businesses of an insurance complaint process to ensure that small

businesses that experience rate increases in a given year may 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 general assembly and

present its findings at hearings before the house and senate finance committees. 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),

composed of healthcare providers and Rhode Island licensed health plans. This subcommittee shall

include in its annual report and presentation before the house and senate finance committees the

following information:

     (1) 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;

     (2) A standardized provider application and credentials verification process, for the

purpose of verifying professional qualifications of participating healthcare providers;

     (3) The uniform health plan claim form utilized by participating providers;

     (4) Methods for health maintenance organizations, as defined by § 27-41-2, and nonprofit

hospital or medical service corporations, as defined by chapters 19 and 20 of title 27, 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 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 clinicians or physician practices in establishing the most appropriate cost

comparisons;

     (5) All activities related to contractual disclosure to participating providers of the

mechanisms for resolving health plan/provider disputes;

     (6) The uniform process being utilized for confirming, in real time, patient insurance

enrollment status, benefits coverage, including copays and deductibles;

     (7) Information related to temporary credentialing of providers seeking to participate in the

plan’s network and the impact of the activity on health plan accreditation;

     (8) The feasibility of regular contract renegotiations between plans and the providers in

their networks; and

     (9) Efforts conducted related to reviewing impact of silent PPOs on physician practices.

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

     (f) To provide analysis of the Rhode Island affordable health plan reinsurance fund. The

fund shall be used to effectuate the provisions of §§ 27-18.5-9 and 27-50-17.

     (g) To analyze the impact of changing the rating guidelines and/or merging the individual

health insurance market, as defined in chapter 18.5 of title 27, and the small-employer health

insurance market, as defined in chapter 50 of title 27, in accordance with the following:

     (1) The analysis shall forecast the likely rate increases required to effect the changes

recommended pursuant to the preceding subsection (g) in the direct-pay market and small-employer

health insurance market over the next five (5) years, based on the current rating structure and

current products.

     (2) The analysis shall include examining the impact of merging the individual and small-

employer markets on premiums charged to individuals and small-employer groups.

     (3) The analysis shall include examining the impact on rates in each of the individual and

small-employer health insurance markets and the number of insureds in the context of possible

changes to the rating guidelines used for small-employer groups, including: community rating

principles; expanding small-employer rate bonds beyond the current range; increasing the employer

group size in the small-group market; and/or adding rating factors for broker and/or tobacco use.

     (4) The analysis shall include examining the adequacy of current statutory and regulatory

oversight of the rating process and factors employed by the participants in the proposed, new

merged market.

     (5) The analysis shall include assessment of possible reinsurance mechanisms and/or

federal high-risk pool structures and funding to support the health insurance market in Rhode Island

by reducing the risk of adverse selection and the incremental insurance premiums charged for this

risk, and/or by making health insurance affordable for a selected at-risk population.

     (6) The health insurance commissioner shall work with an insurance market merger task

force to assist with the analysis. The task force shall be chaired by the health insurance

commissioner and shall include, but not be limited to, representatives of the general assembly, the

business community, small-employer carriers as defined in § 27-50-3, carriers offering coverage in

the individual market in Rhode Island, health insurance brokers, and members of the general public.

     (7) For the purposes of conducting this analysis, the commissioner may contract with an

outside organization with expertise in fiscal analysis of the private insurance market. In conducting

its study, the organization shall, to the extent possible, obtain and use actual health plan data. Said

data shall be subject to state and federal laws and regulations governing confidentiality of health

care and proprietary information.

     (8) The task force shall meet as necessary and include its findings in the annual report, and

the commissioner shall include the information in the annual presentation before the house and

senate finance committees.

     (h) To establish and convene a workgroup representing healthcare providers and health

insurers for the purpose of coordinating the development of processes, guidelines, and standards to

streamline healthcare administration that are to be adopted by payors and providers of healthcare

services operating in the state. This workgroup shall include representatives with expertise who

would contribute to the streamlining of healthcare administration and who are selected from

hospitals, physician practices, community behavioral health organizations, each health insurer, and

other affected entities. The workgroup shall also include at least one designee each from the Rhode

Island Medical Society, Rhode Island Council of Community Mental Health Organizations, the

Rhode Island Health Center Association, and the Hospital Association of Rhode Island. In any year

that the workgroup meets and submits recommendations to the office of the health insurance

commissioner, the office of the health insurance commissioner shall submit such recommendations

to the health and human services committees of the Rhode Island house of representatives and the

Rhode Island senate prior to the implementation of any such recommendations and subsequently

shall submit a report to the general assembly by June 30, 2024. The report shall include the

recommendations the commissioner may implement, with supporting rationale. The workgroup

shall consider and make recommendations for:

     (1) Establishing a consistent standard for electronic eligibility and coverage verification.

Such standard shall:

     (i) Include standards for eligibility inquiry and response and, wherever possible, be

consistent with the standards adopted by nationally recognized organizations, such as the Centers

for Medicare & Medicaid Services;

     (ii) Enable providers and payors to exchange eligibility requests and responses on a system-

to-system basis or using a payor-supported web browser;

     (iii) Provide reasonably detailed information on a consumer’s eligibility for healthcare

coverage; scope of benefits; limitations and exclusions provided under that coverage; cost-sharing

requirements for specific services at the specific time of the inquiry; current deductible amounts;

accumulated or limited benefits; out-of-pocket maximums; any maximum policy amounts; and

other information required for the provider to collect the patient’s portion of the bill;

     (iv) Reflect the necessary limitations imposed on payors by the originator of the eligibility

and benefits information;

     (v) Recommend a standard or common process to protect all providers from the costs of

services to patients who are ineligible for insurance coverage in circumstances where a payor

provides eligibility verification based on best information available to the payor at the date of the

request of eligibility.

     (2) Developing implementation guidelines and promoting adoption of the guidelines for:

     (i) The use of the National Correct Coding Initiative code-edit policy by payors and

providers in the state;

     (ii) Publishing any variations from codes and mutually exclusive codes by payors in a

manner that makes for simple retrieval and implementation by providers;

     (iii) Use of Health Insurance Portability and Accountability Act standard group codes,

reason codes, and remark codes by payors in electronic remittances sent to providers;

     (iv) Uniformity in the processing of claims by payors; and the processing of corrections to

claims by providers and payors;

     (v) A standard payor-denial review process for providers when they request a

reconsideration of a denial of a claim that results from differences in clinical edits where no single,

common-standards body or process exists and multiple conflicting sources are in use by payors and

providers.

     (vi) Nothing in this section, nor in the guidelines developed, shall inhibit an individual

payor’s ability to employ, and not disclose to providers, temporary code edits for the purpose of

detecting and deterring fraudulent billing activities. The guidelines shall require that each payor

disclose to the provider its adjudication decision on a claim that was denied or adjusted based on

the application of such edits and that the provider have access to the payor’s review and appeal

process to challenge the payor’s adjudication decision.

     (vii) Nothing in this subsection shall be construed to modify the rights or obligations of

payors or providers with respect to procedures relating to the investigation, reporting, appeal, or

prosecution under applicable law of potentially fraudulent billing activities.

     (3) Developing and promoting widespread adoption by payors and providers of guidelines

to:

     (i) Ensure payors do not automatically deny claims for services when extenuating

circumstances make it impossible for the provider to obtain a preauthorization before services are

performed or notify a payor within an appropriate standardized timeline of a patient’s admission;

     (ii) Require payors to use common and consistent processes and time frames when

responding to provider requests for medical management approvals. Whenever possible, such time

frames shall be consistent with those established by leading national organizations and be based

upon the acuity of the patient’s need for care or treatment. For the purposes of this section, medical

management includes prior authorization of services, preauthorization of services, precertification

of services, post-service review, medical-necessity review, and benefits advisory;

     (iii) Develop, maintain, and promote widespread adoption of a single, common website

where providers can obtain payors’ preauthorization, benefits advisory, and preadmission

requirements;

     (iv) Establish guidelines for payors to develop and maintain a website that providers can

use to request a preauthorization, including a prospective clinical necessity review; receive an

authorization number; and transmit an admission notification;

     (v) Develop and implement the use of programs that implement selective prior

authorization requirements, based on stratification of healthcare providers’ performance and

adherence to evidence-based medicine with the input of contracted healthcare providers and/or

provider organizations. Such criteria shall be transparent and easily accessible to contracted

providers. Such selective prior authorization programs shall be available when healthcare providers

participate directly with the insurer in risk-based payment contracts and may be available to

providers who do not participate in risk-based contracts;

     (vi) Require the review of medical services, including behavioral health services, and

prescription drugs, subject to prior authorization on at least an annual basis, with the input of

contracted healthcare providers and/or provider organizations. Any changes to the list of medical

services, including behavioral health services, and prescription drugs requiring prior authorization,

shall be shared via provider-accessible websites;

     (vii) Improve communication channels between health plans, healthcare providers, and

patients by:

     (A) Requiring transparency and easy accessibility of prior authorization requirements,

criteria, rationale, and program changes to contracted healthcare providers and patients/health plan

enrollees which may be satisfied by posting to provider-accessible and member-accessible

websites; and

     (B) Supporting:

     (I) Timely submission by healthcare providers of the complete information necessary to

make a prior authorization determination, as early in the process as possible; and

     (II) Timely notification of prior authorization determinations by health plans to impacted

health plan enrollees, and healthcare providers, including, but not limited to, ordering providers,

and/or rendering providers, and dispensing pharmacists which may be satisfied by posting to

provider-accessible websites or similar electronic portals or services;

     (viii) Increase and strengthen continuity of patient care by:

     (A) Defining protections for continuity of care during a transition period for patients

undergoing an active course of treatment, when there is a formulary or treatment coverage change

or change of health plan that may disrupt their current course of treatment and when the treating

physician determines that a transition may place the patient at risk; and for prescription medication

by allowing a grace period of coverage to allow consideration of referred health plan options or

establishment of medical necessity of the current course of treatment;

     (B) Requiring continuity of care for medical services, including behavioral health services,

and prescription medications for patients on appropriate, chronic, stable therapy through

minimizing repetitive prior authorization requirements; and which for prescription medication shall

be allowed only on an annual review, with exception for labeled limitation, to establish continued

benefit of treatment; and

     (C) Requiring communication between healthcare providers, health plans, and patients to

facilitate continuity of care and minimize disruptions in needed treatment which may be satisfied

by posting to provider-accessible websites or similar electronic portals or services;

     (D) Continuity of care for formulary or drug coverage shall distinguish between FDA

designated interchangeable products and proprietary or marketed versions of a medication;

     (ix) Encourage healthcare providers and/or provider organizations and health plans to

accelerate use of electronic prior authorization technology, including adoption of national standards

where applicable; and

     (x) For the purposes of subsections (h)(3)(v) through (h)(3)(x) of this section, the

workgroup meeting may be conducted in part or whole through electronic methods.

     (4) To provide a report to the house and senate, on or before January 1, 2017, with

recommendations for establishing guidelines and regulations for systems that give patients

electronic access to their claims information, particularly to information regarding their obligations

to pay for received medical services, pursuant to 45 C.F.R. § 164.524.

     (5) No provision of this subsection (h) shall preclude the ongoing work of the office of

health insurance commissioner’s administrative simplification task force, which includes meetings

with key stakeholders in order to improve, and provide recommendations regarding, the prior

authorization process.

     (i) To issue an anti-cancer medication report. Not later than June 30, 2014, and annually

thereafter, the office of the health insurance commissioner (OHIC) shall provide the senate

committee on health and human services, and the house committee on corporations, with: (1)

Information on the availability in the commercial market of coverage for anti-cancer medication

options; (2) For the state employee’s health benefit plan, the costs of various cancer-treatment

options; (3) The changes in drug prices over the prior thirty-six (36) months; and (4) Member

utilization and cost-sharing expense.

     (j) To monitor the adequacy of each health plan’s compliance with the provisions of the

federal Mental Health Parity Act, including a review of related claims processing and

reimbursement procedures. Findings, recommendations, and assessments shall be made available

to the public.

     (k) To monitor the transition from fee-for-service and toward global and other alternative

payment methodologies for the payment for healthcare services. Alternative payment

methodologies should be assessed for their likelihood to promote access to affordable health

insurance, health outcomes, and performance.

     (l) To report annually, no later than July 1, 2014, then biannually thereafter, on hospital

payment variation, including findings and recommendations, subject to available resources.

     (m) Notwithstanding any provision of the general or public laws or regulation to the

contrary, provide a report with findings and recommendations to the president of the senate and the

speaker of the house, on or before April 1, 2014, including, but not limited to, the following

information:

     (1) The impact of the current, mandated healthcare benefits as defined in §§ 27-18-48.1,

27-18-60, 27-18-62, 27-18-64, similar provisions in chapters 19, 20 and 41 of title 27, and §§ 27-

18-3(c), 27-38.2-1 et seq., or others as determined by the commissioner, on the cost of health

insurance for fully insured employers, subject to available resources;

     (2) Current provider and insurer mandates that are unnecessary and/or duplicative due to

the existing standards of care and/or delivery of services in the healthcare system;

     (3) A state-by-state comparison of health insurance mandates and the extent to which

Rhode Island mandates exceed other states benefits; and

     (4) Recommendations for amendments to existing mandated benefits based on the findings

in (m)(1), (m)(2), and (m)(3) above.

     (n) On or before July 1, 2014, the office of the health insurance commissioner, in

collaboration with the director of health and lieutenant governor’s office, shall submit a report to

the general assembly and the governor to inform the design of accountable care organizations

(ACOs) in Rhode Island as unique structures for comprehensive healthcare delivery and value-

based payment arrangements, that shall include, but not be limited to:

     (1) Utilization review;

     (2) Contracting; and

     (3) Licensing and regulation.

     (o) On or before February 3, 2015, the office of the health insurance commissioner shall

submit a report to the general assembly and the governor that describes, analyzes, and proposes

recommendations to improve compliance of insurers with the provisions of § 27-18-76 with regard

to patients with mental health and substance use disorders.

     (p) To work to ensure the health insurance coverage of behavioral health care under the

same terms and conditions as other health care, and to integrate behavioral health parity

requirements into the office of the health insurance commissioner insurance oversight and

healthcare transformation efforts.

     (q) To work with other state agencies to seek delivery system improvements that enhance

access to a continuum of mental health and substance use disorder treatment in the state; and

integrate that treatment with primary and other medical care to the fullest extent possible.

     (r) To direct insurers toward policies and practices that address the behavioral health needs

of the public and greater integration of physical and behavioral healthcare delivery.

     (s) The office of the health insurance commissioner shall conduct an analysis of the impact

of the provisions of § 27-38.2-1(i) on health insurance premiums and access in Rhode Island and

submit a report of its findings to the general assembly on or before June 1, 2023.

     (t) To undertake the analyses, reports, and studies contained in this section:

     (1) The office shall hire the necessary staff and prepare a request for proposal for a qualified

and competent firm or firms to undertake the following analyses, reports, and studies:

     (i) The firm shall undertake a comprehensive review of all social and human service

programs having a contract with or licensed by the state or any subdivision of the department of

children, youth and families (DCYF), the department of behavioral healthcare, developmental

disabilities and hospitals (BHDDH), the department of human services (DHS), the department of

health (DOH), and Medicaid for the purposes of:

     (A) Establishing a baseline of the eligibility factors for receiving services;

     (B) Establishing a baseline of the service offering through each agency for those

determined eligible;

     (C) Establishing a baseline understanding of reimbursement rates for all social and human

service programs including rates currently being paid, the date of the last increase, and a proposed

model that the state may use to conduct future studies and analyses;

     (D) Ensuring accurate and adequate reimbursement to social and human service providers

that facilitate the availability of high-quality services to individuals receiving home and

community-based long-term services and supports provided by social and human service providers;

     (E) Ensuring the general assembly is provided accurate financial projections on social and

human service program costs, demand for services, and workforce needs to ensure access to entitled

beneficiaries and services;

     (F) Establishing a baseline and determining the relationship between state government and

the provider network including functions, responsibilities, and duties;

     (G) Determining a set of measures and accountability standards to be used by EOHHS and

the general assembly to measure the outcomes of the provision of services including budgetary

reporting requirements, transparency portals, and other methods; and

     (H) Reporting the findings of human services analyses and reports to the speaker of the

house, senate president, chairs of the house and senate finance committees, chairs of the house and

senate health and human services committees, and the governor.

     (2) The analyses, reports, and studies required pursuant to this section shall be

accomplished and published as follows and shall provide:

     (i) An assessment and detailed reporting on all social and human service program rates to

be completed by January 1, 2023, including rates currently being paid and the date of the last

increase;

     (ii) An assessment and detailed reporting on eligibility standards and processes of all

mandatory and discretionary social and human service programs to be completed by January 1,

2023;

     (iii) An assessment and detailed reporting on utilization trends from the period of January

1, 2017, through December 31, 2021, for social and human service programs to be completed by

January 1, 2023;

     (iv) An assessment and detailed reporting on the structure of the state government as it

relates to the provision of services by social and human service providers including eligibility and

functions of the provider network to be completed by January 1, 2023;

     (v) An assessment and detailed reporting on accountability standards for services for social

and human service programs to be completed by January 1, 2023;

     (vi) An assessment and detailed reporting by April 1, 2023, on all professional licensed

and unlicensed personnel requirements for established rates for social and human service programs

pursuant to a contract or established fee schedule;

     (vii) An assessment and reporting on access to social and human service programs, to

include any wait lists and length of time on wait lists, in each service category by April 1, 2023;

     (viii) An assessment and reporting of national and regional Medicaid rates in comparison

to Rhode Island social and human service provider rates by April 1, 2023;

     (ix) An assessment and reporting on usual and customary rates paid by private insurers and

private pay for similar social and human service providers, both nationally and regionally, by April

1, 2023; and

     (x) Completion of the development of an assessment and review process that includes the

following components: eligibility; scope of services; relationship of social and human service

provider and the state; national and regional rate comparisons and accountability standards that

result in recommended rate adjustments; and this process shall be completed by September 1, 2023,

and conducted biennially hereafter. No later than September 1, 2027, all biennial reports shall

include a review and recommendations of rates for primary care services. The biennial rate setting

shall be consistent with payment requirements established in § 1902(a)(30)(A) of the Social

Security Act, 42 U.S.C. § 1396a(a)(30)(A), and all federal and state law, regulations, and quality

and safety standards. The results and findings of this process shall be transparent, and public

meetings shall be conducted to allow providers, recipients, and other interested parties an

opportunity to ask questions and provide comment beginning in September 2023 and biennially

thereafter.

     (3) In fulfillment of the responsibilities defined in subsection (t), the office of the health

insurance commissioner shall consult with the Executive Office of Health and Human Services.

     (u) Annually, each department (namely, EOHHS, DCYF, DOH, DHS, and BHDDH) shall

include the corresponding components of the assessment and review (i.e., eligibility; scope of

services; relationship of social and human service provider and the state; and national and regional

rate comparisons and accountability standards including any changes or substantive issues between

biennial reviews) including the recommended rates from the most recent assessment and review

with their annual budget submission to the office of management and budget and provide a detailed

explanation and impact statement if any rate variances exist between submitted recommended

budget and the corresponding recommended rate from the most recent assessment and review

process starting October 1, 2023, and biennially thereafter.

     (v) The general assembly shall appropriate adequate funding as it deems necessary to

undertake the analyses, reports, and studies contained in this section relating to the powers and

duties of the office of the health insurance commissioner.

     SECTION 9. Rhode Island Medicaid Reform Act of 2008 Resolution.

     WHEREAS, the General Assembly enacted Chapter 12.4 of Title 42 entitled “The Rhode

Island Medicaid Reform Act of 2008”; and  

      WHEREAS, a legislative enactment is required pursuant to Rhode Island General Laws

section 42-12.4-1, et seq.; and 

       WHEREAS, Rhode Island General Laws section 42-7.2-5(3)(i) provides that the

secretary of the executive office of health and human Services is responsible for the review and

coordination of any Medicaid section 1115 demonstration waiver requests and renewals as well

as any initiatives and proposals requiring amendments to the Medicaid state plan or category II or

III changes as described in the demonstration, “with potential to affect the scope, amount, or

duration of publicly-funded health care services, provider payments or reimbursements, or access

to or the availability of benefits and services provided by Rhode Island general and public laws”;

and 

     WHEREAS, in pursuit of a more cost-effective consumer choice system of care that is

fiscally sound and sustainable, the secretary requests legislative approval of the following

proposals to amend the demonstration; and