2012 -- H 7784 SUBSTITUTE A

=======

LC01835/SUB A/3

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - HEALTH CARE REFORM ACT

OF 2004 - HEALTH INSURANCE OVERSIGHT

     Introduced By: Representatives Marcello, O`Neill, and Hearn

     Date Introduced: February 28, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 42-14.5-3 of the General Laws in Chapter 42-14.5 entitled "The

1-2

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

1-3

to read as follows:

1-4

     42-14.5-3. Powers and duties. [Contingent effective date; see effective dates under

1-5

this section.] -- The health insurance commissioner shall have the following powers and duties:

1-6

      (a) To conduct quarterly public meetings throughout the state, separate and distinct from

1-7

rate hearings pursuant to section 42-62-13, regarding the rates, services and operations of insurers

1-8

licensed to provide health insurance in the state the effects of such rates, services and operations

1-9

on consumers, medical care providers, patients, and the market environment in which such

1-10

insurers operate and efforts to bring new health insurers into the Rhode Island market. Notice of

1-11

not less than ten (10) days of said hearing(s) shall go to the general assembly, the governor, the

1-12

Rhode Island Medical Society, the Hospital Association of Rhode Island, the director of health,

1-13

the attorney general and the chambers of commerce. Public notice shall be posted on the

1-14

department's web site and given in the newspaper of general circulation, and to any entity in

1-15

writing requesting notice.

1-16

      (b) To make recommendations to the governor and the house of representatives and

1-17

senate finance committees regarding health care insurance and the regulations, rates, services,

1-18

administrative expenses, reserve requirements, and operations of insurers providing health

1-19

insurance in the state, and to prepare or comment on, upon the request of the governor, or

2-1

chairpersons of the house or senate finance committees, draft legislation to improve the regulation

2-2

of health insurance. In making such recommendations, the commissioner shall recognize that it is

2-3

the intent of the legislature that the maximum disclosure be provided regarding the

2-4

reasonableness of individual administrative expenditures as well as total administrative costs. The

2-5

commissioner shall also make recommendations on the levels of reserves including consideration

2-6

of: targeted reserve levels; trends in the increase or decrease of reserve levels; and insurer plans

2-7

for distributing excess reserves.

2-8

      (c) To establish a consumer/business/labor/medical advisory council to obtain

2-9

information and present concerns of consumers, business and medical providers affected by

2-10

health insurance decisions. The council shall develop proposals to allow the market for small

2-11

business health insurance to be affordable and fairer. The council shall be involved in the

2-12

planning and conduct of the quarterly public meetings in accordance with subsection (a) above.

2-13

The advisory council shall develop measures to inform small businesses of an insurance

2-14

complaint process to ensure that small businesses that experience rate increases in a given year

2-15

may request and receive a formal review by the department. The advisory council shall assess

2-16

views of the health provider community relative to insurance rates of reimbursement, billing and

2-17

reimbursement procedures, and the insurers' role in promoting efficient and high quality health

2-18

care. The advisory council shall issue an annual report of findings and recommendations to the

2-19

governor and the general assembly and present their findings at hearings before the house and

2-20

senate finance committees. The advisory council is to be diverse in interests and shall include

2-21

representatives of community consumer organizations; small businesses, other than those

2-22

involved in the sale of insurance products; and hospital, medical, and other health provider

2-23

organizations. Such representatives shall be nominated by their respective organizations. The

2-24

advisory council shall be co-chaired by the health insurance commissioner and a community

2-25

consumer organization or small business member to be elected by the full advisory council.

2-26

      (d) To establish and provide guidance and assistance to a subcommittee ("The

2-27

Professional Provider-Health Plan Work Group") of the advisory council created pursuant to

2-28

subsection (c) above, composed of health care providers and Rhode Island licensed health plans.

2-29

This subcommittee shall include in its annual report and presentation before the house and senate

2-30

finance committees the following information:

2-31

      (i) A method whereby health plans shall disclose to contracted providers the fee

2-32

schedules used to provide payment to those providers for services rendered to covered patients;

2-33

      (ii) A standardized provider application and credentials verification process, for the

2-34

purpose of verifying professional qualifications of participating health care providers;

3-1

      (iii) The uniform health plan claim form utilized by participating providers;

3-2

      (iv) Methods for health maintenance organizations as defined by section 27-41-1, and

3-3

nonprofit hospital or medical service corporations as defined by chapters 27-19 and 27-20, to

3-4

make facility-specific data and other medical service-specific data available in reasonably

3-5

consistent formats to patients regarding quality and costs. This information would help consumers

3-6

make informed choices regarding the facilities and/or clinicians or physician practices at which to

3-7

seek care. Among the items considered would be the unique health services and other public

3-8

goods provided by facilities and/or clinicians or physician practices in establishing the most

3-9

appropriate cost comparisons.

3-10

      (v) All activities related to contractual disclosure to participating providers of the

3-11

mechanisms for resolving health plan/provider disputes; and

3-12

      (vi) The uniform process being utilized for confirming in real time patient insurance

3-13

enrollment status, benefits coverage, including co-pays and deductibles.

3-14

      (vii) Information related to temporary credentialing of providers seeking to participate in

3-15

the plan's network and the impact of said activity on health plan accreditation;

3-16

      (viii) The feasibility of regular contract renegotiations between plans and the providers

3-17

in their networks.

3-18

      (ix) Efforts conducted related to reviewing impact of silent PPOs on physician practices.

3-19

      (e) To enforce the provisions of Title 27 and Title 42 as set forth in section 42-14-5(d).

3-20

      (f) To provide analysis of the Rhode Island Affordable Health Plan Reinsurance Fund.

3-21

The fund shall be used to effectuate the provisions of sections 27-18.5-8 and 27-50-17.

3-22

      (g) To analyze the impact of changing the rating guidelines and/or merging the

3-23

individual health insurance market as defined in chapter 27-18.5 and the small employer health

3-24

insurance market as defined in chapter 27-50 in accordance with the following:

3-25

      (i) The analysis shall forecast the likely rate increases required to effect the changes

3-26

recommended pursuant to the preceding subsection (g) in the direct pay market and small

3-27

employer health insurance market over the next five (5) years, based on the current rating

3-28

structure, and current products.

3-29

      (ii) The analysis shall include examining the impact of merging the individual and small

3-30

employer markets on premiums charged to individuals and small employer groups.

3-31

      (iii) The analysis shall include examining the impact on rates in each of the individual

3-32

and small employer health insurance markets and the number of insureds in the context of

3-33

possible changes to the rating guidelines used for small employer groups, including: community

3-34

rating principles; expanding small employer rate bonds beyond the current range; increasing the

4-1

employer group size in the small group market; and/or adding rating factors for broker and/or

4-2

tobacco use.

4-3

      (iv) The analysis shall include examining the adequacy of current statutory and

4-4

regulatory oversight of the rating process and factors employed by the participants in the

4-5

proposed new merged market.

4-6

      (v) The analysis shall include assessment of possible reinsurance mechanisms and/or

4-7

federal high-risk pool structures and funding to support the health insurance market in Rhode

4-8

Island by reducing the risk of adverse selection and the incremental insurance premiums charged

4-9

for this risk, and/or by making health insurance affordable for a selected at-risk population.

4-10

      (vi) The health insurance commissioner shall work with an insurance market merger task

4-11

force to assist with the analysis. The task force shall be chaired by the health insurance

4-12

commissioner and shall include, but not be limited to, representatives of the general assembly, the

4-13

business community, small employer carriers as defined in section 27-50-3, carriers offering

4-14

coverage in the individual market in Rhode Island, health insurance brokers and members of the

4-15

general public.

4-16

      (vii) For the purposes of conducting this analysis, the commissioner may contract with

4-17

an outside organization with expertise in fiscal analysis of the private insurance market. In

4-18

conducting its study, the organization shall, to the extent possible, obtain and use actual health

4-19

plan data. Said data shall be subject to state and federal laws and regulations governing

4-20

confidentiality of health care and proprietary information.

4-21

      (viii) The task force shall meet as necessary and include their findings in the annual

4-22

report and the commissioner shall include the information in the annual presentation before the

4-23

house and senate finance committees.

4-24

     (h) To establish and convene a workgroup representing health care providers and health

4-25

insurers for the purpose of coordinating the development of processes, guidelines, and standards

4-26

to streamline health care administration that are to be adopted by payors and providers of health

4-27

care services operating in the state. This workgroup shall include representatives with expertise

4-28

that would contribute to the streamlining of health care administration and that are selected from

4-29

hospitals, physician practices, community behavioral health organizations, each health insurer

4-30

and other affected entities. The workgroup shall also include at least one designee each from the

4-31

Rhode Island Medical Society, Rhode Island Council of Community Mental Health

4-32

Organizations, the Rhode Island Health Center Association, and the Hospital Association of

4-33

Rhode Island. The workgroup shall consider and make recommendations for:

5-34

     (1) Establishing a consistent standard for electronic eligibility and coverage verification.

5-35

Such standard shall:

5-36

     (i) Include standards for eligibility inquiry and response and, wherever possible, be

5-37

consistent with the standards adopted by nationally recognized organizations, such as the centers

5-38

for Medicare and Medicaid services;

5-39

     (ii) Enable providers and payors to exchange eligibility requests and responses on a

5-40

system-to-system basis or using a payor supported web browser;

5-41

     (iii) Provide reasonably detailed information on a consumer's eligibility for health care

5-42

coverage, scope of benefits, limitations and exclusions provided under that coverage, cost-sharing

5-43

requirements for specific services at the specific time of the inquiry, current deductible amounts,

5-44

accumulated or limited benefits, out-of-pocket maximums, any maximum policy amounts, and

5-45

other information required for the provider to collect the patient's portion of the bill;

5-46

     (iv) Reflect the necessary limitations imposed on payors by the originator of the

5-47

eligibility and benefits information;

5-48

     (v) Recommend a standard or common process to protect all providers from the costs of

5-49

services to patients who are ineligible for insurance coverage in circumstances where a payor

5-50

provides eligibility verification based on best information available to the payor at the date of the

5-51

request of eligibility.

5-52

     (2) Developing implementation guidelines and promoting adoption of such guidelines

5-53

for:

5-54

     (i) The use of the national correct coding initiative code edit policy by payors and

5-55

providers in the state;

5-56

     (ii) Publishing any variations from codes and mutually exclusive codes by payors in a

5-57

manner that makes for simple retrieval and implementation by providers;

5-58

     (iii) Use of health insurance portability and accountability act standard group codes,

5-59

reason codes, and remark codes by payors in electronic remittances sent to providers;

5-60

     (iv) The processing of corrections to claims by providers and payors.

5-61

     (v) A standard payor denial review process for providers when they request a

5-62

reconsideration of a denial of a claim that results from differences in clinical edits where no

5-63

single, common standards body or process exists and multiple conflicting sources are in use by

5-64

payors and providers.

5-65

     (vi) Nothing in this section or in the guidelines developed shall inhibit an individual

5-66

payor's ability to employ, and not disclose to providers, temporary code edits for the purpose of

5-67

detecting and deterring fraudulent billing activities. The guidelines shall require that each payor

5-68

disclose to the provider its adjudication decision on a claim that was denied or adjusted based on

6-1

the application of such edits and that the provider have access to the payor's review and appeal

6-2

process to challenge the payor's adjudication decision.

6-3

     (vii) Nothing in this subsection shall be construed to modify the rights or obligations of

6-4

payors or providers with respect to procedures relating to the investigation, reporting, appeal, or

6-5

prosecution under applicable law of potentially fraudulent billing activities.

6-6

     (3) Developing and promoting widespread adoption by payors and providers of

6-7

guidelines to:

6-8

     (i) Ensure payors do not automatically deny claims for services when extenuating

6-9

circumstances make it impossible for the provider to obtain a preauthorization before services are

6-10

performed or notify a payor within an appropriate standardized timeline of a patient's admission;

6-11

     (ii) Require payors to use common and consistent processes and time frames when

6-12

responding to provider requests for medical management approvals. Whenever possible, such

6-13

time frames shall be consistent with those established by leading national organizations and be

6-14

based upon the acuity of the patient's need for care or treatment. For the purposes of this section,

6-15

medical management includes prior authorization of services, preauthorization of services,

6-16

precertification of services, post service review, medical necessity review, and benefits advisory;

6-17

     (iii) Develop, maintain, and promote widespread adoption of a single common website

6-18

where providers can obtain payors' preauthorization, benefits advisory, and preadmission

6-19

requirements;

6-20

     (iv) Establish guidelines for payors to develop and maintain a website that providers can

6-21

use to request a preauthorization, including a prospective clinical necessity review; receive an

6-22

authorization number; and transmit an admission notification.

6-23

     SECTION 2. This act shall take effect upon passage.

=======

LC01835/SUB A/3

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - HEALTH CARE REFORM ACT

OF 2004 - HEALTH INSURANCE OVERSIGHT

***

7-1

     This act would establish and facilitate a workgroup representing health care providers and

7-2

health insurers for the purpose of coordinating the development of processes, guidelines, and

7-3

standards to streamline health care administration that are to be adopted by payors and providers

7-4

of health care services operating in the state.

7-5

     This act would take effect upon passage.

=======

LC01835/SUB A/3

=======