Rhode Island 2023 Regular Session

Rhode Island Senate Bill S1000 Compare Versions

Only one version of the bill is available at this time.

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5	5	2023 -- S 1000
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7	7	LC001063
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9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE RHODE ISLAND ALL-
16	16	PAYER HEALTH CARE PA YMENT REFORM ACT
17	17	Introduced By: Senator Ryan W. Pearson
18	18	Date Introduced: May 15, 2023
19	19	Referred To: Senate Health & Human Services
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22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND 1
24	24	GOVERNMENT" is hereby amended by adding thereto the following chapters: 2
25	25	CHAPTER 14.7 3
26	26	THE RHODE ISLAND ALL-PAYER HEALTH CARE PAYMENT REFORM ACT 4
27	27	42-14.7-1. Short title. 5
28	28	This chapter shall be known and may be cited as “The Rhode Island All-Payer Health Care 6
29	29	Payment Reform Act.” 7
30	30	42-14.7-2. Legislative findings, intent, and purpose. 8
31	31	The general assembly hereby finds and declares as follows: 9
32	32	(1) Health care providers are stewards of critical health care resources and deliver services 10
33	33	that are necessary to support the health and wellbeing of Rhode Islanders and the communities in 11
34	34	which they live. 12
35	35	(2) The structure and terms of health care payment significantly influences the allocation 13
36	36	of resources within the health care system by creating a system of incentives that influence the 14
37	37	behavior of health care providers and health care purchasers. 15
38	38	(3) The prevailing system of fee-for-service payment creates a financial incentive for 16
39	39	increasing the volume of health care services and acts as a barrier to meaningful systemic 17
40	40	transformations in health care delivery that would promote more affordable and predictable cost 18
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44	44	growth, improved financial stability for health care providers, and technical innovation in care 1
45	45	delivery to support population health and quality excellence. 2
46	46	(4) The coronavirus disease 2019 public health emergency heightened the faults of the 3
47	47	prevailing system of fee-for-service payment. The sharp reduction in service volume caused by the 4
48	48	suspension of elective procedures, combined with increasing marginal costs borne by health care 5
49	49	providers to institute infection control measures, necessitated the appropriation and disbursement 6
50	50	of hundreds of millions of dollars by the State of Rhode Island and the federal government in the 7
51	51	form of economic stabilization and revenue replacement funds for health care providers. The 8
52	52	aggregate value of these economic stabilization and revenue replacement funds was largely 9
53	53	distributed to hospitals and hospital systems, which account for the highest share of total health 10
54	54	care spending. 11
55	55	(5) The fragmented organization of health care purchasing activity between multiple public 12
56	56	and private payers, acting principally through competing health insurance companies, precludes 13
57	57	meaningful efforts to align the structure and terms of health care payment in the absence of 14
58	58	government intervention and creates administrative burdens for health care providers. 15
59	59	(6) Government, as health care purchaser and regulator, possesses a unique role as a 16
60	60	convener and facilitator of discussions between health care providers and health insurers, acting on 17
61	61	behalf of health care purchasers, to reform the structure and terms of health care payment as a 18
62	62	means to improve operating efficiency, improve health care quality, reduce administrative burden, 19
63	63	and serve the public interest in healthy people and equitable health outcomes. 20
64	64	(7) Payment reform, defined as the restructuring of the terms of health care payment 21
65	65	through the development and implementation of advanced value-based payment models, is 22
66	66	necessary to achieve the goals of affordable and predictable cost growth, improved financial 23
67	67	stability for health care providers, and technical innovation in care delivery to support population 24
68	68	health and quality excellence. 25
69	69	(8) The general assembly recognizes that on April 13, 2022, Rhode Island health care 26
70	70	leaders entered into a compact to accelerate advanced value-based payment model adoption, 27
71	71	finding that transforming payment away from fee-for-service to a prospective budget-based model 28
72	72	can support improved health care affordability and reorient health care delivery to focus on how 29
73	73	best to organize health care resources to meet population needs, and improve access, equity, patient 30
74	74	experience, and quality. 31
75	75	(9) The benefits of payment reform are maximized when advanced value-based payment 32
76	76	models enjoy the participation of all payers, public and private. Rhode Island has a successful track 33
77	77	record of all-payer health care reforms, including the patient-centered medical home program for 34
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81	81	primary care endorsed by the general assembly under chapter 14.6 of title 42, the ("Rhode Island 1
82	82	All-Payer Patient-Centered Medical Home Act"). 2
83	83	(10) It is the intent of the general assembly to endorse and support the efforts of health care 3
84	84	providers and health insurers, acting on behalf of health care purchasers, to increase the adoption 4
85	85	of advanced value-based payment models in Rhode Island. Furthermore, the general assembly 5
86	86	endorses the findings and efforts articulated by health care leaders in the April 13, 2022, Compact 6
87	87	to Accelerate Advanced Value-Based Payment Model Adoption in Rhode Island. It is the purpose 7
88	88	of this chapter to provide policy direction and resources to support the development and 8
89	89	implementation of all-payer advanced value-based payment models in Rhode Island. 9
90	90	42-14.7-3. Definitions. 10
91	91	As used in this chapter, the following terms shall have the following meanings: 11
92	92	(1) “Advanced value-based payment model” means a prospective budget-based payment 12
93	93	model with quality-linked financial implications that is defined for a specific patient population 13
94	94	and/or set of services. 14
95	95	(2) "Health insurance plan" means any individual, general, blanket or group policy of 15
96	96	health, accident and sickness insurance issued by a health insurer. Health insurance plan shall not 16
97	97	include insurance coverage providing benefits for: 17
98	98	(i) Hospital confinement indemnity; 18
99	99	(ii) Disability income; 19
100	100	(iii) Accident only; 20
101	101	(iv) Long-term care; 21
102	102	(v) Medicare supplement; 22
103	103	(vi) Limited benefit health; 23
104	104	(vii) Specified disease indemnity; 24
105	105	(viii) Sickness or bodily injury or death by accident or both; and 25
106	106	(ix) Other limited benefit policies. 26
107	107	(3) "Health insurer" means all entities licensed, or required to be licensed, in this state that 27
108	108	offer health benefit plans in Rhode Island including, but not limited to, nonprofit hospital service 28
109	109	corporations and nonprofit medical-service corporations established pursuant to chapters 19 and 20 29
110	110	of title 27, and health maintenance organizations established pursuant to chapter 41 of title 27 or as 30
111	111	defined in chapter 62 of this title 42, a fraternal benefit society or any other entity subject to state 31
112	112	insurance regulation that provides medical care on the basis of a periodic premium, paid directly 32
113	113	or through an association, trust or other intermediary, and issued, renewed, or delivered within or 33
114	114	without Rhode Island. 34
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118	118	42-14.7-4. Promotion of all-payer health care payment reform. 1
119	119	(a) All-payer payment reform convening and payment model development shall be 2
120	120	implemented as follows: 3
121	121	(1) The health insurance commissioner and the Medicaid director shall convene an all- 4
122	122	payer payment reform working group comprised of health care providers, including hospitals, 5
123	123	ambulatory care providers, and clinicians, health insurers, businesses, consumer advocates, and 6
124	124	other parties with relevant expertise and interest in all-payer adoption of advanced value-based 7
125	125	payment models. The health insurance commissioner and the Medicaid director, in consultation 8
126	126	with the working group, shall be charged with developing the structure and terms of advanced 9
127	127	value-based payment models for use by all-payers. 10
128	128	(2) The health insurance commissioner and the Medicaid director may exercise discretion 11
129	129	in the selection and sequencing of payment model development by provider type; however, at a 12
130	130	minimum, shall develop recommendations for the design of hospital global budgets for facility and 13
131	131	employed clinician professional services and prospective payment for at least two (2) professional 14
132	132	provider types. 15
133	133	(3) The health insurance commissioner and the Medicaid director may form subgroups of 16
134	134	the working group to develop recommendations for the design of specific all-payer advanced value-17
135	135	based payment models. 18
136	136	(b) All-payer payment reform reports shall be provided as follows: 19
137	137	(1) The health insurance commissioner and the Medicaid director, in consultation with the 20
138	138	working group described under subsection (a) of this section, shall develop the following reports 21
139	139	to supply information necessary to develop and implement advanced value-based payment models. 22
140	140	These reports shall be submitted to the general assembly by the following dates indicated: 23
141	141	(i) By July 1, 2025, the health insurance commissioner and the Medicaid director shall 24
142	142	complete a report examining the cost structure and financial performance of hospitals licensed in 25
143	143	Rhode Island. The report shall examine, at a minimum, hospital operating costs, fixed costs and 26
144	144	variable costs, costs related to the provision of patient care, costs unrelated to the provision of 27
145	145	patient care, net patient revenues, the relative prices received by hospitals from different payers, 28
146	146	other income and operating expenses, profitability, and operating margins by payer type. The 29
147	147	hospitals included in the report may have up to thirty (30) days to review the draft report prior to it 30
148	148	being finalized; 31
149	149	(ii) By July 1, 2025, the health insurance commissioner and the Medicaid director shall 32
150	150	complete a report examining the cost-shifting phenomenon between payers. The report shall also 33
151	151	examine the fiscal and economic impact of changes to Medicaid reimbursement rates for hospital 34
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155	155	services; and 1
156	156	(iii) By January 1, 2026, the health insurance commissioner and the Medicaid director shall 2
157	157	submit finished recommendations around payment model design for hospital global budgets for 3
158	158	facility and employed clinician professional services and prospective payment for at least two (2) 4
159	159	professional provider types. 5
160	160	(2) The health insurance commissioner and the Medicaid director shall procure necessary 6
161	161	technical assistance and consulting services to prepare the payment model recommendations under 7
162	162	subsection (a) of this section and the reports enumerated under subsection (b)(1) of this section. 8
163	163	(c) Engagement of the Centers for Medicare and Medicaid Services shall be undertaken as 9
164	164	follows: 10
165	165	(1) The health insurance commissioner, in consultation with the Medicaid director, shall 11
166	166	engage the federal Centers for Medicare and Medicaid Services to explore opportunities to secure 12
167	167	federal participation in advanced value-based payment models through the Medicare program. 13
168	168	(2) The health insurance commissioner, for commercial and Medicare, and the Medicaid 14
169	169	director, for Medicaid, are authorized to negotiate the terms of any necessary waivers under Section 15
170	170	1115(A) of the Social Security Act to secure federal participation in advanced value-based payment 16
171	171	models in Rhode Island. 17
172	172	42-14.7-5. Annual reports on administration and implementation. 18
173	173	The health insurance commissioner and the Medicaid director shall report to the general 19
174	174	assembly annually on or before March 1, commencing on March 1, 2024, on the implementation 20
175	175	of advanced value-based payment models and the work performed by the all-payer payment reform 21
176	176	working group described under § 42-14.7-4(a)(1). The annual report shall include 22
177	177	recommendations and draft legislative language for adoption by the general assembly, if necessary, 23
178	178	to ensure continued progress toward implementation of advanced value-based payment models in 24
179	179	Rhode Island. 25
180	180	42-14.7-6. Regulations. 26
181	181	The health insurance commissioner and the Medicaid director shall promulgate all 27
182	182	necessary and proper rules and regulations to implement this chapter. 28
183	183	SECTION 2. This act shall take effect upon passage. 29
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190	190	EXPLANATION
191	191	BY THE LEGISLATIVE COUNCIL
192	192	OF
193	193	A N A C T
194	194	RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE RHODE ISLAND ALL-
195	195	PAYER HEALTH CARE PA YMENT REFORM ACT
196	196	***
197	197	This act would require that the health insurance commissioner and the Medicaid director 1
198	198	convene an all-payer payment reform working group which would be charged with developing the 2
199	199	structure and terms of advanced value-based payment models for use by all-payer healthcare 3
200	200	insurers. Annual reports would be provided annually commencing March 1, 2024, to the general 4
201	201	assembly. 5
202	202	This act would take effect upon passage. 6
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