2025 -- S 0053

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LC000456

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO INSURANCE -- BENEFIT DETERMINATION AND UTILIZATION

REVIEW ACT

     Introduced By: Senators Ujifusa, Lauria, Lawson, Tikoian, Euer, Pearson, Valverde, Bell,
and DiMario

     Date Introduced: January 23, 2025

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. This act may be cited as the "Rhode Island Prior Authorization Reform Act

of 2025."

     SECTION 2. Section 27-18.9-2 of the General Laws in Chapter 27-18.9 entitled "Benefit

Determination and Utilization Review Act" is hereby amended to read as follows:

     27-18.9-2. Definitions.

     As used in this chapter, the following terms are defined as follows:

     (1) “Adverse benefit determination” means a decision not to authorize a healthcare service,

including a denial, reduction, or termination of, or a failure to provide or make a payment, in whole

or in part, for a benefit. A decision by a utilization-review agent to authorize a healthcare service

in an alternative setting, a modified extension of stay, or an alternative treatment shall not constitute

an adverse determination if the review agent and provider are in agreement regarding the decision.

Adverse benefit determinations include:

     (i) “Administrative adverse benefit determinations,” meaning any adverse benefit

determination that does not require the use of medical judgment or clinical criteria such as a

determination of an individual’s eligibility to participate in coverage, a determination that a benefit

is not a covered benefit, or any rescission of coverage; and

     (ii) “Non-administrative adverse benefit determinations,” meaning any adverse benefit

determination that requires or involves the use of medical judgement or clinical criteria to

determine whether the service being reviewed is medically necessary and/or appropriate. This

includes the denial of treatments determined to be experimental or investigational, and any denial

of coverage of a prescription drug because that drug is not on the healthcare entity’s formulary.

     (2) “Appeal” or “internal appeal” means a subsequent review of an adverse benefit

determination upon request by a claimant to include the beneficiary or provider to reconsider all or

part of the original adverse benefit determination.

     (3) “Authorization” means a review by a review agent, performed according to this chapter,

concluding that the allocation of healthcare services ordered by a provider, given or proposed to be

given to a beneficiary, was approved or authorized.

     (4) “Authorized representative” means an individual acting on behalf of the beneficiary

and shall include: the ordering provider; any individual to whom the beneficiary has given express

written consent to act on his or her behalf; a person authorized by law to provide substituted consent

for the beneficiary; and, when the beneficiary is unable to provide consent, a family member of the

beneficiary.

     (5) “Beneficiary” means a policy-holder subscriber, enrollee, or other individual

participating in a health-benefit plan.

     (6) “Benefit determination” means a decision to approve or deny a request to provide or

make payment for a healthcare service or treatment.

     (7) “Certificate” means a certificate granted by the commissioner to a review agent meeting

the requirements of this chapter.

     (8) “Claim” means a request for plan benefit(s) made by a claimant in accordance with the

healthcare entity’s reasonable procedures for filing benefit claims. This shall include pre-service,

concurrent, and post-service claims.

     (9) “Claimant” means a healthcare entity participant, beneficiary, and/or authorized

representative who makes a request for plan benefit(s).

     (10) “Commissioner” means the health insurance commissioner.

     (11) “Complaint” means an oral or written expression of dissatisfaction by a beneficiary,

authorized representative, or a provider. The appeal of an adverse benefit determination is not

considered a complaint.

     (12) “Concurrent assessment” means an assessment of healthcare services conducted

during a beneficiary’s hospital stay, course of treatment or services over a period of time, or for the

number of treatments. If the medical problem is ongoing, this assessment may include the review

of services after they have been rendered and billed.

     (13) “Concurrent claim” means a request for a plan benefit(s) by a claimant that is for an

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ongoing course of treatment or services over a period of time or for the number of treatments.

     (14) “Delegate” means a person or entity authorized pursuant to a delegation of authority

or re-delegation of authority, by a healthcare entity or network plan to perform one or more of the

functions and responsibilities of a healthcare entity and/or network plan set forth in this chapter or

regulations or guidance promulgated thereunder.

     (15) “Emergency services” or “emergent services” means those resources provided in the

event of the sudden onset of a medical, behavioral health, or other health condition that the absence

of immediate medical attention could reasonably be expected, by a prudent layperson, to result in

placing the patient’s health in serious jeopardy, serious impairment to bodily or mental functions,

or serious dysfunction of any bodily organ or part.

     (16) “External review” means a review of a non-administrative adverse benefit

determination (including final internal adverse benefit determination) conducted pursuant to an

applicable external review process performed by an independent review organization.

     (17) “External review decision” means a determination by an independent review

organization at the conclusion of the external review.

     (18) “Final internal adverse benefit determination” means an adverse benefit determination

that has been upheld by a plan or issuer at the completion of the internal appeals process or when

the internal appeals process has been deemed exhausted as defined in § 27-18.9-7(b)(1).

     (19) “Health-benefit plan” or “health plan” means a policy, contract, certificate, or

agreement entered into, offered, or issued by a healthcare entity to provide, deliver, arrange for,

pay for, or reimburse any of the costs of healthcare services.

     (20) “Healthcare entity” means an insurance company licensed, or required to be licensed,

by the state of Rhode Island or other entity subject to the jurisdiction of the commissioner or the

jurisdiction of the department of business regulation pursuant to chapter 62 of title 42, that contracts

or offers to contract, or enters into an agreement to provide, deliver, arrange for, pay for, or

reimburse any of the costs of healthcare services, including, without limitation: a for-profit or

nonprofit hospital, medical or dental service corporation or plan, a health maintenance organization,

a health insurance company, or any other entity providing a plan of health insurance, accident and

sickness insurance, health benefits, or healthcare services.

     (21) “Healthcare services” means and includes, but is not limited to: an admission,

diagnostic procedure, therapeutic procedure, treatment, extension of stay, the ordering and/or filling

of formulary or non-formulary medications, and any other medical, behavioral, dental, vision care

services, activities, or supplies that are covered by the beneficiary’s health-benefit plan.

     (22) “Independent review organization” or “IRO” means an entity that conducts

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independent external reviews of adverse benefit determinations or final internal adverse benefit

determinations.

     (23) "Insurer", for the purposes of § 27-18.9-16, means all insurance companies licensed

to do business in Rhode Island, including those subject to chapter 1 of title 27, a foreign insurance

company licensed to do business in Rhode Island and subject to chapter 2 of title 27, a health

insurance carrier subject and organized pursuant to chapter 18 of title 27, a nonprofit hospital

service corporation subject and organized pursuant to chapter 19 of title 27, a nonprofit medical

services corporation subject and organized pursuant to chapter 20 of title 27, a qualified health

maintenance organization subject and organized pursuant to chapter 41 of title 27, and Medicaid

Managed Care Organizations.

     (23)(24) “Network” means the group or groups of participating providers providing

healthcare services under a network plan.

     (24)(25) “Network plan” means a health-benefit plan or health plan that either requires a

beneficiary to use, or creates incentives, including financial incentives, for a beneficiary to use the

providers managed, owned, under contract with, or employed by the healthcare entity.

     (25)(26) “Office” means the office of the health insurance commissioner.

     (26)(27) “Pre-service claim” means the request for a plan benefit(s) by a claimant prior to

a service being rendered and is not considered a concurrent claim.

     (28) "Primary care provider (PCP)", for the purposes of § 27-18.9-16, means general

internists, family physicians, pediatricians, geriatricians, OB-GYNs, nurse practitioners,

physician’s assistants and other healthcare providers who are licensed to provide, coordinate, and

supervise primary care and order healthcare services and goods, including preventive and

diagnostic services for patients.

     (29) "Prior authorization", for the purposes of § 27-18.9-16, means the approval a PCP is

required by an insurer to obtain from an insurer or pharmacy benefit manager before healthcare is

covered for a patient.

     (29)(30) “Professional provider” means an individual provider or healthcare professional

licensed, accredited, or certified to perform specified healthcare services consistent with state law

and who provides healthcare services and is not part of a separate facility or institutional contract.

     (28)(31) “Prospective assessment” or “pre-service assessment” means an assessment of

healthcare services prior to services being rendered.

     (29)(32) “Provider” means a physician, hospital, professional provider, pharmacy,

laboratory, dental, medical, or behavioral health provider or other state-licensed or other state-

recognized provider of health care or behavioral health services or supplies.

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     (30)(33) “Retrospective assessment” or “post-service assessment” means an assessment of

healthcare services that have been rendered. This shall not include reviews conducted when the

review agency has been obtaining ongoing information.

     (31)(34) “Retrospective claim” or “post-service claim” means any claim for a health-plan

benefit that is not a pre-service or concurrent claim.

     (32)(35) “Review agent” means a person or healthcare entity performing benefit

determination reviews that is either employed by, affiliated with, under contract with, or acting on

behalf of a healthcare entity.

     (33)(36) “Same or similar specialty” means a practitioner who has the appropriate training

and experience that is the same or similar as the attending provider in addition to experience in

treating the same problems to include any potential complications as those under review.

     (34)(37) “Therapeutic interchange” means the interchange or substitution of a drug with a

dissimilar chemical structure within the same therapeutic or pharmacological class that can be

expected to have similar outcomes and similar adverse reaction profiles when given in equivalent

doses, in accordance with protocols approved by the president of the medical staff or medical

director and the director of pharmacy.

     (35)(38) “Tiered network” means a network that identifies and groups some or all types of

providers into specific groups to which different provider reimbursement, beneficiary cost-sharing,

or provider access requirements, or any combination thereof, apply for the same services.

     (36)(39) “Urgent healthcare services” includes those resources necessary to treat a

symptomatic medical, mental health, substance use, or other healthcare condition that a prudent

layperson, acting reasonably, would believe necessitates treatment within a twenty-four hour (24)

period of the onset of such a condition in order that the patient’s health status not decline as a

consequence. This does not include those conditions considered to be emergent healthcare services

as defined in this section.

     (37)(40) “Utilization review” means the prospective, concurrent, or retrospective

assessment of the medical necessity and/or appropriateness of the allocation of healthcare services

of a provider, given or proposed to be given, to a beneficiary. Utilization review does not include:

     (i) The therapeutic interchange of drugs or devices by a pharmacy operating as part of a

licensed inpatient healthcare facility; or

     (ii) The assessment by a pharmacist licensed pursuant to the provisions of chapter 19.1 of

title 5, and practicing in a pharmacy operating as part of a licensed inpatient healthcare facility, in

the interpretation, evaluation and implementation of medical orders, including assessments and/or

comparisons involving formularies and medical orders.

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     (38)(41) “Utilization review plan” means a description of the standards governing

utilization review activities performed by a review agent.

     SECTION 3. Chapter 27-18.9 of the General Laws entitled "Benefit Determination and

Utilization Review Act" is hereby amended by adding thereto the following section:

     27-18.9-16. Primary care exception.

     (a) Except as provided in section (b) of this subsection, an insurer shall not impose any

prior authorization requirement for any admission, item, service, treatment, or procedure ordered

by a primary care provider.

     (b) The prohibition set forth in subsection (a) of this section shall not be construed to

prohibit prior authorization requirements for prescription drugs.

     SECTION 4. Section 42-7.2-5 of the General Laws in Chapter 42-7.2 entitled "Office of

Health and Human Services" is hereby amended to read as follows:

     42-7.2-5. Duties of the secretary.

     The secretary shall be subject to the direction and supervision of the governor for the

oversight, coordination, and cohesive direction of state-administered health and human services

and in ensuring the laws are faithfully executed, notwithstanding any law to the contrary. In this

capacity, the secretary of the executive office of health and human services (EOHHS) shall be

authorized to:

     (1) Coordinate the administration and financing of healthcare benefits, human services, and

programs including those authorized by the state’s Medicaid section 1115 demonstration waiver

and, as applicable, the Medicaid state plan under Title XIX of the U.S. Social Security Act.

However, nothing in this section shall be construed as transferring to the secretary the powers,

duties, or functions conferred upon the departments by Rhode Island public and general laws for

the administration of federal/state programs financed in whole or in part with Medicaid funds or

the administrative responsibility for the preparation and submission of any state plans, state plan

amendments, or authorized federal waiver applications, once approved by the secretary.

     (2) Serve as the governor’s chief advisor and liaison to federal policymakers on Medicaid

reform issues as well as the principal point of contact in the state on any such related matters.

     (3)(i) Review and ensure the coordination of the state’s Medicaid section 1115

demonstration waiver requests and renewals as well as any initiatives and proposals requiring

amendments to the Medicaid state plan or formal amendment changes, as described in the special

terms and conditions of the state’s Medicaid section 1115 demonstration waiver with the potential

to affect the scope, amount, or duration of publicly funded healthcare services, provider payments

or reimbursements, or access to or the availability of benefits and services as provided by Rhode

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Island general and public laws. The secretary shall consider whether any such changes are legally

and fiscally sound and consistent with the state’s policy and budget priorities. The secretary shall

also assess whether a proposed change is capable of obtaining the necessary approvals from federal

officials and achieving the expected positive consumer outcomes. Department directors shall,

within the timelines specified, provide any information and resources the secretary deems necessary

in order to perform the reviews authorized in this section.

     (ii) Direct the development and implementation of any Medicaid policies, procedures, or

systems that may be required to assure successful operation of the state’s health and human services

integrated eligibility system and coordination with HealthSource RI, the state’s health insurance

marketplace.

     (iii) Beginning in 2015, conduct on a biennial basis a comprehensive review of the

Medicaid eligibility criteria for one or more of the populations covered under the state plan or a

waiver to ensure consistency with federal and state laws and policies, coordinate and align systems,

and identify areas for improving quality assurance, fair and equitable access to services, and

opportunities for additional financial participation.

     (iv) Implement service organization and delivery reforms that facilitate service integration,

increase value, and improve quality and health outcomes.

     (4) Beginning in 2020, prepare and submit to the governor, the chairpersons of the house

and senate finance committees, the caseload estimating conference, and to the joint legislative

committee for health-care oversight, by no later than September 15 of each year, a comprehensive

overview of all Medicaid expenditures outcomes, administrative costs, and utilization rates. The

overview shall include, but not be limited to, the following information:

     (i) Expenditures under Titles XIX and XXI of the Social Security Act, as amended;

     (ii) Expenditures, outcomes, and utilization rates by population and sub-population served

(e.g., families with children, persons with disabilities, children in foster care, children receiving

adoption assistance, adults ages nineteen (19) to sixty-four (64), and elders);

     (iii) Expenditures, outcomes, and utilization rates by each state department or other

municipal or public entity receiving federal reimbursement under Titles XIX and XXI of the Social

Security Act, as amended;

     (iv) Expenditures, outcomes, and utilization rates by type of service and/or service

provider;

     (v) Expenditures by mandatory population receiving mandatory services and, reported

separately, optional services, as well as optional populations receiving mandatory services and,

reported separately, optional services for each state agency receiving Title XIX and XXI funds; and

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     (vi) Information submitted to the Centers for Medicare & Medicaid Services for the

mandatory annual state reporting of the Core Set of Children’s Health Care Quality Measures for

Medicaid and Children’s Health Insurance Program, behavioral health measures on the Core Set of

Adult Health Care Quality Measures for Medicaid and the Core Sets of Health Home Quality

Measures for Medicaid to ensure compliance with the Bipartisan Budget Act of 2018, Pub. L. No.

115-123.

     The directors of the departments, as well as local governments and school departments,

shall assist and cooperate with the secretary in fulfilling this responsibility by providing whatever

resources, information and support shall be necessary.

     (5) Resolve administrative, jurisdictional, operational, program, or policy conflicts among

departments and their executive staffs and make necessary recommendations to the governor.

     (6) Ensure continued progress toward improving the quality, the economy, the

accountability, and the efficiency of state-administered health and human services. In this capacity,

the secretary shall:

     (i) Direct implementation of reforms in the human resources practices of the executive

office and the departments that streamline and upgrade services, achieve greater economies of scale

and establish the coordinated system of the staff education, cross-training, and career development

services necessary to recruit and retain a highly-skilled, responsive, and engaged health and human

services workforce;

     (ii) Encourage EOHHS-wide consumer-centered approaches to service design and delivery

that expand their capacity to respond efficiently and responsibly to the diverse and changing needs

of the people and communities they serve;

     (iii) Develop all opportunities to maximize resources by leveraging the state’s purchasing

power, centralizing fiscal service functions related to budget, finance, and procurement,

centralizing communication, policy analysis and planning, and information systems and data

management, pursuing alternative funding sources through grants, awards, and partnerships and

securing all available federal financial participation for programs and services provided EOHHS-

wide;

     (iv) Improve the coordination and efficiency of health and human services legal functions

by centralizing adjudicative and legal services and overseeing their timely and judicious

administration;

     (v) Facilitate the rebalancing of the long-term system by creating an assessment and

coordination organization or unit for the expressed purpose of developing and implementing

procedures EOHHS-wide that ensure that the appropriate publicly funded health services are

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provided at the right time and in the most appropriate and least restrictive setting;

     (vi) Strengthen health and human services program integrity, quality control and

collections, and recovery activities by consolidating functions within the office in a single unit that

ensures all affected parties pay their fair share of the cost of services and are aware of alternative

financing;

     (vii) Assure protective services are available to vulnerable elders and adults with

developmental and other disabilities by reorganizing existing services, establishing new services

where gaps exist, and centralizing administrative responsibility for oversight of all related

initiatives and programs.

     (7) Prepare and integrate comprehensive budgets for the health and human services

departments and any other functions and duties assigned to the office. The budgets shall be

submitted to the state budget office by the secretary, for consideration by the governor, on behalf

of the state’s health and human services agencies in accordance with the provisions set forth in §

35-3-4.

     (8) Utilize objective data to evaluate health and human services policy goals, resource use

and outcome evaluation and to perform short and long-term policy planning and development.

     (9) Establishment of an integrated approach to interdepartmental information and data

management that complements and furthers the goals of the unified health infrastructure project

initiative and that will facilitate the transition to a consumer-centered integrated system of state-

administered health and human services.

     (10) At the direction of the governor or the general assembly, conduct independent reviews

of state-administered health and human services programs, policies and related agency actions and

activities and assist the department directors in identifying strategies to address any issues or areas

of concern that may emerge thereof. The department directors shall provide any information and

assistance deemed necessary by the secretary when undertaking such independent reviews.

     (11) Provide regular and timely reports to the governor and make recommendations with

respect to the state’s health and human services agenda.

     (12) Employ such personnel and contract for such consulting services as may be required

to perform the powers and duties lawfully conferred upon the secretary.

     (13) Assume responsibility for complying with the provisions of any general or public law

or regulation related to the disclosure, confidentiality, and privacy of any information or records,

in the possession or under the control of the executive office or the departments assigned to the

executive office, that may be developed or acquired or transferred at the direction of the governor

or the secretary for purposes directly connected with the secretary’s duties set forth herein.

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     (14) Hold the director of each health and human services department accountable for their

administrative, fiscal, and program actions in the conduct of the respective powers and duties of

their agencies.

     (15) Identify opportunities for inclusion with the EOHHS’ October 1, 2023 budget

submission, to remove fixed eligibility thresholds for programs under its purview by establishing

sliding scale decreases in benefits commensurate with income increases up to four hundred fifty

percent (450%) of the federal poverty level. These shall include but not be limited to, medical

assistance, childcare assistance, and food assistance.

     (16) Ensure that insurers minimize administrative burdens on providers that may delay

medically necessary care, including requiring that insurers do not impose a prior authorization

requirement for any admission, item, service, treatment, or procedure ordered by an in-network

primary care provider. Provided, the prohibition shall not be construed to prohibit prior

authorization requirements for prescription drugs. Provided further, that as used in this subsection

(16) of this section, the terms "insurer," "primary care provider," and "prior authorization" means

the same as those terms are defined in § 27-18.9-2.

     SECTION 5. Section 42-14.5-3 of the General Laws in Chapter 42-14.5 entitled "The

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

to read as follows:

     42-14.5-3. Powers and duties.

     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

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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;

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     (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.

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     (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

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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

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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

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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

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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,

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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:

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     (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,

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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. 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

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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.

     (w) Ensure that insurers minimize administrative burdens that may delay medically

necessary care, including by promulgating rules and regulations and taking enforcement actions to

implement § 27-18.9-16.

     SECTION 6. Should any provision of this act be found unconstitutional, preempted, or

otherwise invalid, that provision shall be severed and such decision shall not affect the validity of

the other parts of this act.

     SECTION 7. This act shall take effect on July 1, 2026.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- BENEFIT DETERMINATION AND UTILIZATION

REVIEW ACT

***

     This act would provide that an insurer would not impose prior authorization requirements

for any admission, item, service, treatment, or procedure ordered by an in-network primary care

provider, with certain exceptions.

     This act would take effect on July 1, 2026.

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