2013 -- H 6283

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LC02899

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO HEALTH AND SAFETY - THE RHODE ISLAND HEALTH CARE REFORM

ACT OF 2013

     Introduced By: Representatives Keable, Tanzi, Blazejewski, and Silva

     Date Introduced: June 26, 2013

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Legislative findings. The general assembly declares that:

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     (1) It is the intention of the Rhode Island general assembly to achieve the goal of access

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to high quality health care at an affordable cost;

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     (2) Transparency is key in achieving an accountable and competitive health care system

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with increased consumer confidence;

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     (3) Attraction, retention and training of a diverse workforce is critically important to the

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evolution of health care service delivery;

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     (4) Rhode Islanders would benefit from instituting healthcare reforms that are tied to

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patient centered care and values based outcomes; and

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     (5) This act aims to build upon existing efforts in the state among health plans, providers

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and state entities to reduce costs, improve transparency and enhance investments in the Rhode

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Island healthcare system while providing opportunities for innovation in the delivery of

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healthcare services.

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     SECTION 2. Section 23-17-10.2 of the General Laws in Chapter 23-17 entitled

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

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     23-17-10.2. Full financial disclosure by hospitals. -- Any hospital licensed under this

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chapter, other than state-operated hospitals, shall annually submit to the director of business

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regulation the department of health:

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     (a) public Public audited financial statements containing information concerning all

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hospital-related corporations, holding corporations and subsidiary corporations, whether for-profit

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or not-for-profit. Any hospital corporation, holding corporation, or subsidiary corporation,

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whether for-profit or not-for-profit, which is not audited by an independent public auditor due to

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limited activity or small size, shall submit a financial statement certified by the chief executive

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officer of that corporation. All information provided shall be available to the public for

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inspection.

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     (b) Any hospitals licensed under this chapter, other than state operated hospitals shall on

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or before January 1, 2014 and annually thereafter, submit a summary of financial information in

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accordance with the following: (1) Not-for-profit hospitals shall submit a summary of the

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information contained in section 501(c), 527, or 4947(a)(1) of the internal revenue code 990 form

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including:

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     (i) Its statement of financial position;

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     (ii) The verified total costs incurred by the hospital in providing health services;

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     (iii) Total payroll including fringe benefits, and any other remuneration of the top five (5)

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highest compensated employees and/or contractors, identified by position description and

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specialty;

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     (iv) The verified net costs of medical education; and

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     (v) Administrative expenses; as defined by the director of the department of health.

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     (2) For-profit hospitals shall submit the information listed in (b)(1) of this section in a

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form approved by the department of health.

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      (c) All information provided shall be made available to the healthcare planning and

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accountability advisory council, as established in section 23-81-4 and shall be made available to

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the public for inspection.

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     SECTION 3. Section 23-17-40 of the General Laws in Chapter 23-17 entitled "Licensing

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of Health Care Facilities" is hereby amended to read as follows:

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     23-17-40. Hospital events reporting. -- (a) Definitions. As used in this section, the

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following terms shall have the following meanings:

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     (1) "Adverse event" means injury to a patient resulting from a medical intervention, and

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not to the underlying condition of the patient.

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     (2) "Checklist of care" means predetermined steps to be followed by a team of healthcare

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providers before, during or after a given procedure to decrease the possibility of adverse effects

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and other patient harm by articulating standards of care.

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     (b) Reportable events as defined in subsection (b)(c) shall be reported to the department

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of health division of facilities regulation on a telephone number maintained for that purpose.

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Hospitals shall report incidents as defined in subsection (b)(c) within twenty-four (24) hours of

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when the accident occurred or if later, within twenty-four (24) hours of receipt of information

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causing the hospital to believe that a reportable event has occurred.

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      (b)(c) (1) Reportable events are defined as follows:

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      (i)(1) Fires or internal disasters in the facility which disrupt the provisions of patient care

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services or cause harm to patients or personnel;

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      (ii)(2) Poisoning involving patients of the facility;

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      (iii)(3) Infection outbreaks as defined by the department in regulation;

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      (iv)(4) Kidnapping and inpatient psychiatric elopements and elopements by minors;

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      (v)(5) Strikes by personnel;

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      (vi)(6) Disasters or other emergency situations external to the hospital environment

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which adversely affect facility operations; and

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      (vii)(7) Unscheduled termination of any services vital to the continued safe operation of

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the facility or to the health and safety of its patients and personnel.

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      (2)(d) Any hospital filing a report with the attorney general's office concerning abuse,

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neglect and mistreatment of patients as defined in chapter 17.8 of this title shall forward a copy of

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the report to the department of health. In addition, a copy of all hospital notifications and reports

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made in compliance with the federal Safe Medical Devices Act of 1990, 21 U.S.C. section 301 et

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seq., shall be forwarded to the department of health within the time specified in the federal law.

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     (c)(e) Any reportable incident in a hospital that results in patient injury as defined in

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subsection (d)(f) shall be reported to the department of health with seventy-two (72) hours or

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when the hospital has reasonable cause to believe that an incident as defined in subsection (d) (f)

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has occurred. The department of health shall promulgate rules and regulations to include the

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process whereby health care professionals with knowledge of an incident shall report it to the

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hospital, requirements for the hospital to conduct a root cause analysis of the incident or other

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appropriate process for incident investigation and to develop and file a performance improvement

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plan, and additional incidents to be reported that are in addition to those listed in subsection

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(d)(f). In its reports, no personal identifiers shall be included. The hospital shall require the

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appropriate committee within the hospital to carry out a peer review process to determine whether

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the incident was within the normal range of outcomes, given the patient's condition. The hospital

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shall notify the department of the outcome of the internal review, and if the findings determine

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that the incident was within the normal range of patient outcomes no further action is required. If

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the findings conclude that the incident was not within the normal range of patient outcomes, the

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hospital shall conduct a root cause analysis or other appropriate process for incident investigation

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to identify causal factors that may have lead to the incident and develop a performance

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improvement plan to prevent similar incidents from occurring in the future. The hospital shall

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also provide to the department of health the following information:

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      (1) An explanation of the circumstances surrounding the incident;

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      (2) An updated assessment of the effect of the incident on the patient;

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      (3) A summary of current patient status including follow-up care provided and post-

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incident diagnosis; and

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      (4) A summary of all actions taken to correct identified problems to prevent recurrence

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of the incident and/or to improve overall patient care and to comply with other requirements of

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this section.

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      (d)(f) Incidents to be reported are those causing or involving:

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      (1) Brain injury;

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      (2) Mental impairment;

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      (3) Paraplegia;

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      (4) Quadriplegia;

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      (5) Any type of paralysis;

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      (6) Loss of use of limb or organ;

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      (7) Hospital stay extended due to serious or unforeseen complications;

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      (8) Birth injury;

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      (9) Impairment of sight or hearing;

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      (10) Surgery on the wrong patient;

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      (11) Subjecting a patient to a procedure other than that ordered or intended by the

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patient's attending physician;

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      (12) Any other incident that is reported to their malpractice insurance carrier or self-

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insurance program;

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      (13) Suicide of a patient during treatment or within five (5) days of discharge from an

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inpatient or outpatient unit (if known);

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      (14) Blood transfusion error; and

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      (15) Any serious or unforeseen complication, that is not expected or probable, resulting

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in an extended hospital stay or death of the patient.

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      (e)(g) This section does not replace other reporting required by this chapter.

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      (f)(h) Nothing in this section shall prohibit the department from investigating any event

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or incident.

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      (g)(i) All reports to the department under this section shall be subject to the provisions of

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section 23-17-15. In addition, all reports under this section, together with the peer review records

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and proceedings related to events and incidents so reported and the participants in the proceedings

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shall be deemed entitled to all the privileges and immunities for peer review records set forth in

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section 23-17-25.

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      (h)(j) The department shall issue an annual report by March 31 each year providing

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aggregate summary information on the events and incidents reported by hospitals as required by

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this chapter. A copy of the report shall be forwarded to the governor, the speaker of the house, the

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senate president and members of the health care quality steering committee established pursuant

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to section 23-17.17-6.

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      (i)(k) The director shall review the list of incidents to be reported in subsection (d)(f)

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above at least biennially to ascertain whether any additions, deletions or modifications to the list

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are necessary. In conducting the review, the director shall take into account those adverse events

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identified on the National Quality Forum's List of Serious Reportable Events. In the event the

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director determines that incidents should be added, deleted or modified, the director shall make

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such recommendations for changes to the legislature.

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     SECTION 4. Section 23-81-4 of the General Laws in Chapter 23-81 entitled "Rhode

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Island Coordinated Health Planning Act of 2006" is hereby amended to read as follows:

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     23-81-4. Powers of the health care planning and accountability advisory council. --

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Powers of the council shall include, but not be limited to the following:

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      (a) The authority to develop and promote studies, advisory opinions and to recommend a

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unified health plan on the state's health care delivery and financing system, including but not

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limited to:

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      (1) Ongoing assessments of the state's health care needs and health care system capacity

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that are used to determine the most appropriate capacity of and allocation of health care

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providers, services, including transportation services, and equipment and other resources, to meet

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Rhode Island's health care needs efficiently and affordably. These assessments shall be used to

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advise the "determination of need for new health care equipment and new institutional health

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services" or "certificate of need" process through the health services council;

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      (2) The establishment of Rhode Island's long range health care goals and values, and the

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recommendation of innovative models of health care delivery, that should be encouraged in

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Rhode Island;

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      (3) Health care payment models that reward improved health outcomes;

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      (4) Measurements of quality and appropriate use of health care services that are designed

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to evaluate the impact of the health planning process;

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      (5) Plans for promoting the appropriate role of technology in improving the availability

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of health information across the health care system, while promoting practices that ensure the

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confidentiality and security of health records; and

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      (6) Recommendations of legislation and other actions that achieve accountability and

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adherence in the health care community to the council's plans and recommendations.

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      (b) Convene meetings of the council no less than every sixty (60) days, which shall be

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subject to the open meetings laws and public records laws of the state, and shall include a process

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for the public to place items on the council's agenda.

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      (c) Appoint advisory committees as needed for technical assistance throughout the

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process.

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      (d) Modify recommendations in order to reflect changing health care systems needs.

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      (e) Promote responsiveness to recommendations among all state agencies that provide

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health service programs, not limited to the five (5) state agencies coordinated by the executive

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office of the health and human services.

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      (f) Coordinate the review of existing data sources from state agencies and the private

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sector that are useful to developing a unified health plan.

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      (g) Formulating, testing, and selecting policies and standards that will achieve desired

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objectives.

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     (h) In consultation with the office of the health insurance commissioner, the council shall

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review health system total cost drivers and provide findings, and, if appropriate related

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recommendations to the governor and general assembly on or before July 1, 2014.

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     (i) Coordinate a comprehensive review of mental health and substance abuse incidence

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rates, service use rates, capacity and potentially high and rising spending.

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     (j) Examine the volume and spending trends for pediatric inpatient and outpatient

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services, including the evolving role of intensive care units (ICUs).

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     (k) Subject to available resources and time, in consultation with the department of health,

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provide periodic assessments beginning on or before October 1, 2014, to the general assembly on

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the appropriate mix of Rhode Island's primary care workforce. The assessments shall include

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analyses of current and future primary care professional supply and demand, recruitment, scope

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of practice and licensure, workforce training issues, and potential incentives with

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recommendations to enhance the supply and diversity of the primary care workforce.

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      (h)(l) Provide an annual report each July, after the convening of the council, to the

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governor and general assembly on implementation of the plan adopted by the council. This

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annual report shall:

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     (1) Present the strategic recommendations, updated annually;

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     (2) Assess the implementation of strategic recommendations in the health care market;

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      (3) Compare and analyze the difference between the guidance and the reality;

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      (4) Recommend to the governor and general assembly legislative or regulatory revisions

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necessary to achieve the long-term goals and values adopted by the council as part of its strategic

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recommendations, and assess the powers needed by the council or governmental entities of the

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state deemed necessary and appropriate to carry out the responsibilities of the council. The initial

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priority of the council shall be an assessment of the needs of the state with regard to hospital

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services and to present recommendations, if any, for modifications to the Hospital Conversion

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Act and the Certificate of Need Program to execute the strategic recommendations of the council.

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The council shall provide an initial report and recommendations to the governor and general

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assembly on or before March 1, 2013.

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      (5) Include the request for a hearing before the appropriate committees of the general

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assembly.

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      (6) Include a response letter from each state agency that is affected by the state health

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plan describing the actions taken and planned to implement the plans recommendations.

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     SECTION 5. Chapter 27-69 of the General Laws entitled "Mandated Benefits" is hereby

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amended by adding thereto the following section:

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     27-69-7. Mandated benefit statement of intent. – Notwithstanding any general law

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enacted after January 1, 2014, any legislation that would create a new state health benefit

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mandate, or expand upon an existing health benefit, shall contain a statement of intent that clearly

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provides the purpose and objectives of the health benefit mandate, including measurable goals

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expected to be achieved by the new or expanded benefit mandate. These goals should address

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both commercial insurance affordability and population health outcomes.

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     SECTION 6. Section 42-14.5-3 of the General Laws in Chapter 42-14.5 entitled "The

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

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to read as follows:

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

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

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

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

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

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

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

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

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

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

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

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writing requesting notice.

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

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

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

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

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

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

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

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

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

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

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for distributing excess reserves.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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finance committees the following information:

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      (i)(1) A method whereby health plans shall disclose to contracted providers the fee

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

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      (ii)(2) A standardized provider application and credentials verification process, for the

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purpose of verifying professional qualifications of participating health care providers;

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      (iii)(3) The uniform health plan claim form utilized by participating providers;

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      (iv)(4) Methods for health maintenance organizations as defined by section 27-41-1, and

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

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

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

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

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

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

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appropriate cost comparisons.;

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      (v)(5) All activities related to contractual disclosure to participating providers of the

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mechanisms for resolving health plan/provider disputes; and

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      (vi)(6) The uniform process being utilized for confirming in real time patient insurance

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

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      (vii)(7) Information related to temporary credentialing of providers seeking to participate

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

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      (viii)(8) The feasibility of regular contract renegotiations between plans and the

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providers in their networks.; and

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      (ix)(9) Efforts conducted related to reviewing impact of silent PPOs on physician

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practices.

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

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

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

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

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

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

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      (i)(1) The analysis shall forecast the likely rate increases required to effect the changes

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

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

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structure, and current products.

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      (ii)(2) The analysis shall include examining the impact of merging the individual and

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

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      (iii)(3) The analysis shall include examining the impact on rates in each of the individual

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

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

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

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

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tobacco use.

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      (iv)(4) The analysis shall include examining the adequacy of current statutory and

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

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proposed new merged market.

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      (v)(5) The analysis shall include assessment of possible reinsurance mechanisms and/or

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

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

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

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      (vi)(6) The health insurance commissioner shall work with an insurance market merger

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

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

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

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

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general public.

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      (vii)(7) For the purposes of conducting this analysis, the commissioner may contract

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

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

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

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confidentiality of health care and proprietary information.

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      (viii)(8) The task force shall meet as necessary and include their findings in the annual

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

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house and senate finance committees.

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

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

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

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

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

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

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

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

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

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

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

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Such standard shall:

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

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

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for Medicare and Medicaid services;

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

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

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

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

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

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

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

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

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eligibility and benefits information;

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

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

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

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request of eligibility.

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

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for:

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

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providers in the state;

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

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manner that makes for simple retrieval and implementation by providers;

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

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

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

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

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

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

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payors and providers.

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      (vi) Nothing in this section or 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

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

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

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

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process to challenge the payor's adjudication decision.

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

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

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prosecution under applicable law of potentially fraudulent billing activities.

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

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guidelines to:

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

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

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

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

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

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

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

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

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

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

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

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requirements; and

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

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

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authorization number; and transmit an admission notification.

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     (j) To monitor the adequacy of each health plan's compliance with the provisions of the

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federal mental health parity act, including a review of related claims processing and

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reimbursement procedures. Findings, recommendations and assessments shall be made available

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to the public.

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     (k) To monitor the transition from fee for service and toward global and other alternative

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payment methodologies for the payment for healthcare services. Alternative payment

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methodologies should be assessed for their likelihood to promote access to affordable health

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insurance, health outcomes and performance.

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     (l) To report annually, no later than July 1, 2014, then biannually thereafter, on hospital

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payment variation, including findings and recommendations, subject to available resources.

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      (m) Notwithstanding any provision of the general or public laws or regulation to the

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contrary, provide a report with findings and recommendations to the president of the senate and

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the speaker of the house, on or before April 1, 2014, including, but not limited to, the following

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information:

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     (1) The impact of the current mandated healthcare benefits as defined in sections 27-18-

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48.1, 27-18-60, 27-18-62, 27-18-64, similar provisions in title 27, chapters 19, 20 and 41, and

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subsection 27-18-3(c), 27-38.2-1 et seq., or others as determined by the commissioner, on the cost

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of health insurance for fully insured employers, subject to available resources;

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     (2) Current provider and insurer mandates that are unnecessary and/or duplicative due to

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the existing standards of care and/or delivery of services in the healthcare system;

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     (3) A state-by-state comparison of health insurance mandates and the extent to which

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Rhode Island mandates exceed other states benefits; and

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     (4) Recommendations for amendments to existing mandated benefits based on the

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findings in (1), (2) and (3) above.

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     (n) On or before July 1, 2014, the office of the health insurance commissioner in

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collaboration with the director of health and lieutenant governor's office shall submit a report to

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the general assembly and the governor to inform the design of accountable care organizations

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(ACOs) in Rhode Island as unique structures for comprehensive healthcare delivery and value

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based payment arrangements, that shall include, but not limited to:

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     (1) Utilization review;

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     (2) Contracting; and

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     (3) Licensing and regulation.

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     SECTION 7. Section 42-14.6-4 of the General Laws in Chapter 42-14.6 entitled "Rhode

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Island All-Payer Patient-Centered Medical Home Act" is hereby amended to read as follows:

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     42-14.6-4. Promotion of the patient-centered medical home. -- (a) Care coordination

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payments.

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      (1) The commissioner and the secretary shall convene a patient-centered medical home

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collaborative consisting of the entities described in subdivision 42-14.6-3(7). The commissioner

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shall require participation in the collaborative by all of the health insurers described above. The

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collaborative shall propose, by January 1, 2012, a payment system, to be adopted in whole or in

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part by the commissioner and the secretary, that requires all health insurers to make per-person

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care coordination payments to patient-centered medical homes, for providing care coordination

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services and directly managing on-site or employing care coordinators as part of all health

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insurance plans offered in Rhode Island. The collaborative shall provide guidance to the state

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health care program as to the appropriate payment system for the state health care program to the

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same patient-centered medical homes; the state health care program must justify the reasons for

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any departure from this guidance to the collaborative.

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      (2) The care coordination payments under this shall be consistent across insurers and

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patient-centered medical homes and shall be in addition to any other incentive payments such as

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quality incentive payments. In developing the criteria for care coordination payments, the

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commissioner shall consider the feasibility of including the additional time and resources needed

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by patients with limited English-language skills, cultural differences, or other barriers to health

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care. The commissioner may direct the collaborative to determine a schedule for phasing in care

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coordination fees.

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      (3) The care coordination payment system shall be in place through July 1, 2016. Its

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continuation beyond that point shall depend on results of the evaluation reports filed pursuant to

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section 42-14.6-6.

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      (4) Examination of other payment reforms. - By January 1, 2013, the commissioner and

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the secretary shall direct the collaborative to consider additional payment reforms to be

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implemented to support patient-centered medical homes including, but not limited to, payment

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structures (to medical home or other providers) that:

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      (i) Reward high-quality, low-cost providers;

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      (ii) Create enrollee incentives to receive care from high-quality, low-cost providers;

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      (iii) Foster collaboration among providers to reduce cost shifting from one part of the

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health continuum to another; and

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      (iv) Create incentives that health care be provided in the least restrictive, most

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appropriate setting.

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      (5) The patient-centered medical home collaborative shall examine and make

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recommendations to the secretary regarding the designation of patient-centered medical homes, in

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order to promote diversity in the size of practices designated, geographic locations of practices

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designated and accessibility of the population throughout the state to patient-centered medical

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homes.

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      (b) The patient-centered medical home collaborative shall propose to the secretary for

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adoption, the standards for the patient-centered medical home to be used in the payment system,

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based on national models where feasible. In developing these standards, the existing standards by

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the national committee for quality assurance, or other independent accrediting organizations may

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be considered where feasible.

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     SECTION 8. Chapter 42-14.6 of the General Laws entitled "Rhode Island All-Payer

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Patient-Centered Medical Home Act" is hereby amended by adding thereto the following section:

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     42-14.6-9. State patient-centered medical home program expansion. -- (a) The

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director of the department of administration is hereby authorized to expand the current patient-

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centered medical home program for state employees and retirees with chronic health conditions

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that are covered by the state employees health benefit program and are high frequency healthcare

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utilizers. This program shall be in addition to and shall not alter the Rhode Island All-Payer

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Patient-Centered Medical Home Act as set forth in section 42-14.6-4.

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     (b) For the purposes of this program, "high utilizers" means individuals who are among

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the top one to five percent (1-5%) of utilization within their payer group.

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     (c) "Patient-centered medical home" means a practice that satisfies the characteristics

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described in section 42-14.6-2.

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     SECTION 9. This act shall take effect upon passage.

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LC02899

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO HEALTH AND SAFETY - THE RHODE ISLAND HEALTH CARE REFORM

ACT OF 2013

***

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     This act would make a number of substantive and definitional changes to various

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provisions of the general laws governing the healthcare system.

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     This act would take effect upon passage.

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LC02899

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