LD 1611 – An Act to Provide Affordable Health Insurance to Small Businesses and Individuals and To Control Health Care Costs

Summary as Enacted

6/13/03

Part A

·                    Establishes Dirigo Health, an independent executive agency, to arrange for the provision of health coverage to small employers, their employees and dependents and individuals on a voluntary basis:

o        Governed by a board of 8 members, 5 voting members appointed by the Governor and 3 ex officio non-voting members:  Commissioners of Professional and Financial Regulation and Administrative and Financial Affairs and the director of the Governor’s Office of Health Policy and Finance.

o        Board determines the services and benefits of Dirigo Health Insurance, also the premiums, co-pays, deductibles and out-of-pocket maximums; report required to Legislature when benefits package determined (requires Dirigo Health Insurance to begin operations no later than October 1, 2004).

o        Board contracts with health carriers for the provision of coverage to eligible individuals and employees, meeting all insurance mandates and reimbursing health care providers at rates negotiated between the provider and the carrier.

o        Board required to establish minimum contribution levels by employers for coverage for employees and dependents---contribution level may not exceed 60% of cost of coverage.

o        Eligible enrollees are defined as employees that work at least 20 hours per week.  Employees working fewer than 30 hours will not be counted in the participation rate formula.

o        Board may establish sliding scale subsidies for persons below 300% of poverty level who are not eligible for MaineCare.

o        Annual report to committees of the Legislature on operation of Dirigo Health and the small group and individual health insurance markets and the numbers of uninsured.

o        If carriers do not offer and deliver Dirigo Health Insurance, board may propose legislation to establish a new nonprofit health plan or expand an existing public plan subject to legislative approval.

o        Board determines annually aggregate measurable cost savings, including reduction in bad debt and charity care, due to Dirigo health coverage and MaineCare expansion.

o        Board establishes a savings offset amount, not to exceed 4%, to be paid by health carriers, 3^rd party administrators and employee benefit excess insurance carriers into a dedicated fund to fund premium subsidies and the Maine Quality Forum.

o        Board will develop methodology for determining assessment for third-party administrators and submit that legislation by 2/1/05.

o        Establishes within Dirigo Health a high risk pool for persons whose care costs over $100,000 per year and for those with certain named diagnoses; requires Dirigo Health to develop disease management protocols for persons in the high risk pool.

o        Requires report comparing Dirigo Health experience to the states with high risk pools.  If after 3 years, Dirigo Health underperforms as to average premium rates and average rates of uninsured compared to states with high risk pools, Dirigo Health is charged with submitting legislation to create a high risk pool on 1/1/08.

·                    Establishes Maine Quality Forum to collect and disseminate research, adopt quality and performance measures, coordinate quality data, issue quality reports in conjunction with the Maine Health Data Organization, conduct consumer education and technology assessment reviews, encourage the adoption of electronic technology, make recommendations for the State Health Plan and issue an annual report.

·                    Establishes the Maine Quality Forum Advisory Council to assist the Dirigo Health board, advise the forum, make recommendations for the State Health Plan and serve as a liaison to other health care quality organization.

·                    Expands MaineCare coverage for children and adults and provides coverage for expansion enrollees who enroll individually and through an employer group.  Expansion of MaineCare not effective until Dirigo Health becomes operational.

·                    Requires monthly reporting of the noncategorical adult MaineCare expansion.

·                    Legislative authorization for Maine Small Business Health Coverage Plan and Maine Consumer Choice Health Plan is retained.

 

Part B

·                    Directs the Governor to issue a biennial State Health Plan, issue a statewide health expenditure budget report and establish the capital investment fund, an annual limit for resources allocated under the certificate of need program.  Within the capital investment fund, 12.5% will be designated for non-hospital projects for a period of 3 years.

·                    Specifies that a certificate of need or public financing that affects health care costs may not be provided unless it meets the goals and budgets in the State Health Plan.

·                    Establishes the Advisory Council on Health Systems Development to advise the Governor on the development of the State Health Plan by collection and coordinating data, synthesizing research and conducting at least 2 public hearings.

 

Part C

·                    Applies certificate of need (CON) requirements to:

o        The portions of an ambulatory surgical facility used by patients or to support ambulatory surgical care; and

o        New technology costing over $1,200,000 in the office of a private practitioner

o        Automatically adjusts the CON thresholds to the Consumer Price Index, medical index

·                    Expands the bases on which the Commissioner of Human Services makes CON decisions, adding consistency with the State Health Plan, reference to quality outcomes, reference to inappropriate increases in service utilization and the limits of the capital investment fund.

·                    Allows the Commissioner of Human Services to receive reports from a panel of experts on CON applications and requires assessments from the Bureau of Health and the Superintendent of Insurance.

·                    Requires hospitals to prepare a list of average prices and to make the lists available to the public.

·                    Requires health care practitioners to notify patients in writing of charges for commonly offered health care services and to assist the patient in calculating the amount of the patient’s co-pay.

·                    Requires the Maine Health Data Organization to adopt rules to collect data on health care quality based on the quality measures adopted by the Maine Quality Forum.

·                    Requires the Maine Health Data organization to issue reports on health care services, costs, and quality.

 

Part D

·                    Requires health care practitioners to submit claims in electronic format using standardized claim forms and allows carriers to reject claims not submitted electronically, subject to exceptions and waivers for offices of health care practitioners with fewer than 10 staff.  Becomes effective 10/16/03.

 

Part E

·                    Requires Superintendent of Insurance to adopt rules for the filing of annual report supplements by health insurers and health maintenance organizations.

·                    Requires small group health plans to submit rate filings to the Superintendent of Insurance and imposes hearing and rate review on those filings unless carrier opts to guarantee 78% loss ratio or refund excess premiums.

·                    Requires individual and small group health insurance rates to reflect savings payment offsets and any recovery of those offsets in premium rates.

·                    Requires large group health carriers to file annually certification that rating practices and methods meet actuarial principles and that savings offset payments and recovery offsets have been properly included in the filing.

·                    Allows managed care health plans to apply to Superintendent of Insurance for permission to offer plans with financial incentive provisions to encourage the use of designated providers of specialty and hospital care if plan does not exceed the Rule 850 travel standard by 100 percent and meets quality criteria; provision is repealed on 7/1/07 and report required to IFS Committee on 1/1/06; Superintendent of Insurance required to adopt major substantive rules to establish quality criteria.

 

Part F

·                    Requests voluntary cooperation of health care practitioners, hospitals and health carriers to limit financial growth for a period of 1 year.

·                    Requires the Governor’s Office of Health Policy and Finance and the Maine Hospital Association to agree on a timetable, format and methodology for reporting on hospital charges, cost efficiency and consolidated operating margins.

·                    Requires the Department of Human Services to conduct a comprehensive study of MaineCare reimbursement rates and to report by January 15, 2004.

·                    Provides $500, 000 in General Fund money to increase the physician incentive payment program within the MaineCare program.

·                    Establishes Commission to Study Maine’s Community Hospitals

 

Part G

·                    Directs the Governor to engage in negotiations to increase access to federally sponsored health services for veterans and to increase Medicare reimbursement rates for health care providers.

·                    Creates the Task Force on Veterans’ Health Services to assess the needs of veterans for health care services and the availability, accessibility and quality of those services.

·                    Requires a study of non-economic damages in medical malpractice cases.