2016 -- S 2824

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LC005482

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO HEALTH AND SAFETY -- COMPREHENSIVE HEALTH INSURANCE

PROGRAM

     Introduced By: Senators Goldin, and Miller

     Date Introduced: March 23, 2016

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 42-14.5 of the General Laws entitled "The Rhode Island Health

Care Reform Act of 2004 - Health Insurance Oversight" is hereby repealed in its entirety.

CHAPTER 42-14.5

The Rhode Island Health Care Reform Act of 2004 - Health Insurance Oversight

     42-14.5-1. Health insurance commissioner. -- There is hereby established, within the

department of business regulation, an office of the health insurance commissioner. The health

insurance commissioner shall be appointed by the governor, with the advice and consent of the

senate. The director of business regulation shall grant to the health insurance commissioner

reasonable access to appropriate expert staff.

     42-14.5-1.1. Legislative findings. -- The general assembly hereby finds and declares as

follows:

      (1) A substantial amount of health care services in this state are purchased for the benefit

of patients by health care insurers engaged in the provision of health care financing services or is

otherwise delivered subject to the terms of agreements between health care insurers and providers

of the services.

      (2) Health care insurers are able to control the flow of patients to providers of health care

services through compelling financial incentives for patients in their plans to utilize only the

services of providers with whom the insurers have contracted.

      (3) Health care insurers also control the health care services rendered to patients through

utilization review programs and other managed care tools and associated coverage and payment

policies.

      (4) By incorporation or merger the power of health care insurers in markets of this state

for health care services has become great enough to create a competitive imbalance, reducing

levels of competition and threatening the availability of high quality, cost-effective health care.

      (5) The power of health care insurers to unilaterally impose provider contract terms may

jeopardize the ability of physicians and other health care providers to deliver the superior quality

health care services that have been traditionally available in this state.

      (6) It is the intention of the general assembly to authorize health care providers to jointly

discuss with health care insurers topics of concern regarding the provision of quality health care

through a committee established by an advisory to the health insurance commissioner.

     42-14.5-2. Purpose. -- With respect to health insurance as defined in § 42-14-5, the

health insurance commissioner shall discharge the powers and duties of office to:

      (1) Guard the solvency of health insurers;

      (2) Protect the interests of consumers;

      (3) Encourage fair treatment of health care providers;

      (4) Encourage policies and developments that improve the quality and efficiency of

health care service delivery and outcomes; and

      (5) View the health care system as a comprehensive entity and encourage and direct

insurers towards policies that advance the welfare of the public through overall efficiency,

improved health care quality, and appropriate access.

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

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

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

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

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

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

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

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

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

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

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

writing requesting notice.

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

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

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

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

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

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

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

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

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

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

distributing excess reserves.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

professional provider-health plan work group") of the advisory council created pursuant to

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

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

finance committees the following information:

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

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

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

purpose of verifying professional qualifications of participating health care providers;

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

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

hospital or medical service corporations as defined by chapters 19 and 20 of title 27, to make

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

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

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

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

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

cost comparisons;

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

mechanisms for resolving health plan/provider disputes;

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

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

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

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

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

their networks; and

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

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

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

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

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

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

health insurance market as defined in chapter 50 of title 27 in accordance with the following:

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

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

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

structure and current products.

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

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

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

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

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

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

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

tobacco use.

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

oversight of the rating process and factors employed by the participants in the proposed new

merged market.

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

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

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

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

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

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

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

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

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

public.

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

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

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

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

confidentiality of health care and proprietary information.

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

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

and senate finance committees.

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

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

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

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

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

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

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

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

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

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

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

Such standard shall:

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

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

for Medicare and Medicaid Services;

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

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

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

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

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

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

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

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

eligibility and benefits information;

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

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

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

request of eligibility.

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

for:

      (i) The use of the National Correct Coding Initiative code edit policy by payors and

providers in the state;

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

manner that makes for simple retrieval and implementation by providers;

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

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

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

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

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

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

payors and providers.

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

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

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

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

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

process to challenge the payor's adjudication decision.

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

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

prosecution under applicable law of potentially fraudulent billing activities.

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

guidelines to:

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

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

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

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

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

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

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

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

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

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

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

requirements;

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

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

authorization number; and transmit an admission notification.

      (i) To issue an ANTI-CANCER MEDICATION REPORT. - Not later than June 30,

2014 and annually thereafter, the office of the health insurance commissioner (OHIC) shall

provide the senate committee on health and human services, and the house committee on

corporations, with: (1) Information on the availability in the commercial market of coverage for

anti-cancer medication options; (2) For the state employee's health benefit plan, the costs of

various cancer treatment options; (3) The changes in drug prices over the prior thirty-six (36)

months; and (4) Member utilization and cost-sharing expense.

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

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

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

to the public.

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

payment methodologies for the payment for health care services. Alternative payment

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

insurance, health outcomes, and performance.

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

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

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

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

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

information:

      (1) The impact of the current mandated healthcare benefits as defined in §§ 27-18-48.1,

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

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

insurance for fully insured employers, subject to available resources;

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

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

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

Rhode Island mandates exceed other states benefits; and

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

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

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

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

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

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

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

      (1) Utilization review;

      (2) Contracting; and

      (3) Licensing and regulation.

      (o) On or before February 3, 2015, the office of the health insurance commissioner shall

submit a report to the general assembly and the governor that describes, analyzes, and proposes

recommendations to improve compliance of insurers with the provisions of § 27-18-76 with

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regard to patients with mental health and substance-use disorders.

     42-14.5-4. Actuary and subject matter experts. -- The health insurance commissioner

may contract with an actuary and/or other subject matter experts to assist him or her in

conducting the study required under subsection 42-14.5-3(g). The actuary or other expert shall

serve under the direction of the health insurance commissioner. Health insurance companies

doing business in this state, including, but not limited to, nonprofit hospital service corporations

and nonprofit medical service corporations established pursuant to chapters 27-19 and 27-20, and

health maintenance organizations established pursuant to chapter 27-41, shall be assessed

according to a schedule of their direct writing of health insurance in this state to pay for the

compensation of the actuary. The amount assessed to all health insurance companies doing

business in this state for the study conducted under subsection 42-14.5-3(g) shall not exceed a

total of one hundred thousand dollars ($100,000).

     SECTION 2. Chapter 42-157 of the General Laws entitled "Rhode Island Health Benefit

Exchange" is hereby repealed in its entirety.

CHAPTER 42-157

Rhode Island Health Benefit Exchange

     42-157-1. Establishment of exchange. -- Purpose. - The department of administration is

hereby authorized to establish the Rhode Island health benefit exchange, to be known as

HealthSource RI, to exercise the powers and authority of a state-based exchange which shall meet

the minimum requirements of the federal act.

     42-157-2. Definitions. -- As used in this section, the following words and terms shall

have the following meanings, unless the context indicates another or different meaning or intent:

      (1) "Director" means the director of the department of administration.

      (2) "Federal act" means the Federal Patient Protection and Affordable Care Act (Public

Law 111-148), as amended by the Federal Health Care and Education Reconciliation Act of 2010

(Public Law 111-152), and any amendments to, or regulations or guidance issued under, those

acts.

      (3) "Health plan" and "qualified health plan" have the same meanings as those terms are

defined in § 1301 of the Federal Act.

      (4) "Insurer" means every medical service corporation, hospital service corporation,

accident and sickness insurer, dental service corporation, and health maintenance organization

licensed under title 27, or as defined in § 42-62-4.

      (5) "Secretary' means the secretary of the Federal Department of Health and Human

Services.

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      (6) "Qualified dental plan" means a dental plan as described in § 1311(d)(2)B)(ii) of the

Federal Act.

      (7) "Qualified individuals" and "'qualified employers" shall have the same meaning as

defined in federal law.

     42-157-3. General requirements. -- (a) The exchange shall make qualified health plans

available to qualified individuals and qualified employers. The exchange shall not make available

any health benefit plan that has not been certified by the exchange as a qualified health plan in

accordance with federal law.

      (b) The exchange shall allow an insurer to offer a plan that provides limited scope dental

benefits meeting the requirements of § 9832(c)(2)(A) of the Internal Revenue Code of 1986

through the exchange, either separately or in conjunction with a qualified health plan, if the plan

provides pediatric dental benefits meeting the requirements of § 1302(b)(1)(J) of the Federal Act.

      (c) Any health plan that delivers a benefit plan on the exchange that covers abortion

services, as defined in 45 CFR § 156.280(d)(1), shall comply with segregation of funding

requirements, as well as an annual assurance statement to the Office of the Health Insurance

Commissioner, in accordance with 45 C.F.R. §§ 156.680(e)(3) and (5).

      (d) At least one plan variation for individual market plan designs offered on the

exchange at each level of coverage, as defined by section 1302(d)(1) of the federal act, at which

the carrier is offering a plan or plans, shall exclude coverage for abortion services as defined in 45

CFR § 156.280(d)(1). If the health plan proposes different rates for such plan variations, each

listed plan design shall include the associated rate. Except for Religious Employers (as defined in

Section 6033(a)(3)(A)(i) of the Internal Revenue Code), employers selecting a plan under this

religious exemption subsection may not designate it as the single plan for employees, but shall

offer their employees full-choice of small employer plans on the exchange, using the employer-

selected plan as the base plan for coverage. The employer is not responsible for payment that

exceeds that designated for the employer-selected plan.

      (e) Health plans that offer a plan variation that excludes coverage for abortion services as

defined in 45 CFR § 156.280(d)(l) for a religious exemption variation in the small group market

shall treat such a plan as a separate plan offering with a corresponding rate.

      (f) An employer who elects a religious exemption variation shall provide written notice

to prospective enrollees prior to enrollment that the plan excludes coverage for abortion services

as defined in 45 CFR § 156.280(d)(1). The carrier must include notice that the plan excludes

coverage for abortion services as part of the Summary of Benefits and Coverage required by 42

U.S.C. § 300gg-15.

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     42-157-4. Financing. -- (a) The department is authorized to assess insurers offering

qualified health plans and qualified dental plans. The revenue raised in accordance with this

subsection shall not exceed the revenue able to be raised through the federal government

assessment and shall be established in accordance and conformity with the federal government

assessment upon those insurers offering products on the Federal Health Benefit exchange.

Revenues from the assessment shall be deposited in a restricted receipt account for the sole use of

the exchange and shall be exempt from the indirect cost recovery provisions of § 35-4-27 of the

general laws.

      (b) The general assembly may appropriate general revenue to support the annual budget

for the exchange in lieu of or to supplement revenues raised from the assessment under § 42-157-

4(a).

      (c) If the director determines that the level of resources obtained pursuant to § 42-157-

4(a) will be in excess of the budget for the exchange, the department shall provide a report to the

governor, the speaker of the house and the senate president identifying the surplus and detailing

how the assessment established pursuant to § 42-157-4(a) may be offset in a future year to

reconcile with impacted insurers and how any future supplemental or annual budget submission

to the general assembly may be revised accordingly.

     42-157-5. Regional purchasing, efficiencies, and innovation. -- To take advantage of

economies of scale and to lower costs, the exchange is hereby authorized to pursue opportunities

to jointly negotiate, procure or otherwise purchase exchange services with or partner with another

state or multiple states and to pursue a Federal Affordable Care Act 1332 Waiver.

     42-157-6. Audit. -- (a) Annually, the exchange shall cause to have a financial and/or

performance audit of its functions and operations performed in compliance with the generally

accepted governmental auditing standards and conducted by the state bureau of audits or a

certified public accounting firm qualified in performance audits.

      (b) If the audit is not directly performed by the state bureau of audits, the selection of the

auditor and the scope of the audit shall be subject to the approval of the state bureau of audits.

      (c) The results of the audit shall be made public upon completion, posted on the

department's website and otherwise made available for public inspection.

     42-157-7. Exchange advisory board. -- The exchange shall maintain an advisory board

which shall be appointed by the director. The director shall consider the expertise of the members

of the board and make appointments so that the board's composition reflects a range and diversity

of skills, backgrounds and stakeholder perspectives.

     42-157-8. Reporting. -- HealthSource RI shall provide a monthly report to the

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chairpersons of the house finance committee and the senate finance committee by the fifteenth

day of each month beginning in July 2015. The report shall include, but not be limited to, the

following information: actual enrollment data by market and insurer, total new and renewed

customers, number of paid customers, actual average premium costs by market and insurer,

number of enrollees receiving financial assistance as defined in the Federal Act, as well as the

number of inbound calls and the number of walk-ins received. The data on inbound calls shall be

segregated by type of call.

     42-157-9. Relation to other laws. -- Nothing in this chapter, and no action taken by the

exchange pursuant to this chapter. shall be construed to preempt or supersede the authority of the

health insurance commissioner to regulate the business of insurance within this state, the director

of the department of health to oversee the licensure of health care providers, the certification of

health plans under chapter 17.13 of title 23, or the licensure of utilization review agents wider

chapter 17.13 of title 23, or the director of the department of human services to oversee the

provision of medical assistance under chapter 8 of title 40. In addition to the provisions of this

chapter, all insurers offering qualified health plans or qualified dental plans in this state shall

comply fully with all applicable health insurance laws and regulations of this state.

     42-157-10. Severability. -- The provisions of this chapter are severable, and if any

provision hereof shall be held invalid in any circumstances, any invalidity shall not affect any

other provisions or circumstances. This chapter shall be construed in all respects so as to meet

any constitutional requirements. In carrying out the purposes and provisions of this chapter, all

steps shall be taken which are necessary to meet constitutional requirements.

     SECTION 3. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby

amended by adding thereto the following chapter:

CHAPTER 94

THE RHODE ISLAND COMPREHENSIVE HEALTH INSURANCE PROGRAM

     23-94-1. Legislative findings and purpose. -- The general assembly finds that Rhode

Island residents face significant and increasingly overwhelming problems obtaining adequate

affordable health insurance due to unnecessary costs and obstacles created by our current health

insurance system, and that removing the burden on Rhode Island businesses to secure health

insurance for employees will benefit the state's economic development. This chapter, therefore,

creates an affordable, comprehensive, and effective health insurance program to benefit all Rhode

Island residents.

     23-94-2. Definitions. -- As used in this chapter:

     (1) "Dependent" has the same definition as set forth in federal tax law (26 U.S.C. §152).

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     (2) "Emergency and urgently needed services" has the same definition as set forth in the

federal Medicare law (42 CFR 422.113).

     (3) "For-profit provider" means any health care professional or health care institution that

provides payments, profits or dividends to investors or owners who do not directly provide health

care.

     (4) "Program" means, "the Rhode Island comprehensive health insurance program"

(RICHIP).

     (5) "Qualified Rhode Island resident" means any individual who is a "resident" as defined

by §§44-30-5(1) and (2) or a dependent of that resident.

     (6) "RICHIP" or "Rhode Island comprehensive health insurance program" means

affordable, comprehensive and effective health insurance as set forth in §23-94-3.

     (7) "RICHIP Premiums" means funds from qualified Rhode Island residents that are

placed into the RICHIP trust fund pursuant to §23-94-11, and are based on income and unearned

income including capital gains.

     23-94-3. Rhode Island Comprehensive Health Insurance Program. -- (a)

Organization. This chapter repeals §42-14.5-3, establishing duties of the health insurance

commissioner, and creates the Rhode Island comprehensive health insurance program (RICHIP),

an independent government agency consisting of a director and staff, as set forth below.

     (b) Director. A director shall be appointed by the governor with the advice and consent of

the senate to lead RICHIP and serve a term of six (6) years. The director shall be compensated in

accordance with the job title and job classification established by the division of human resources

and approved by the general assembly. The director may be removed by a two-thirds (2/3)

majority vote of each house of the general assembly. The director shall have the following duties:

     (1) Oversee management of the RICHIP trust fund;

     (2) Create and oversee RICHIP budgets;

     (3) Appoint an advisory committee of health care professionals and others (hereinafter,

the "RICHIP advisory committee");

     (4) Establish RICHIP benefits as set forth in §23-94-5;

     (5) Establish RICHIP provider reimbursement as set forth in §23-94-8;

     (6) Coordinate with the state comptroller to facilitate billing from and payments to

providers using the state's computerized financial system, the Rhode Island financial and

accounting network system (RIFANS);

     (7) Coordinate with federal health care programs, including Medicare and Medicaid, to

streamline federal funding and reimbursement;

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     (8) Monitor billing and reimbursements to detect inappropriate behavior by providers and

patients;

     (9) Oversee RICHIP registration for qualified Rhode Island residents;

     (10) Create RICHIP expenditure, status, and assessment reports;

     (11) Review RICHIP disbursements on a quarterly basis and recommend adjustments in

fee schedules needed to achieve budgetary targets and permit adequate access to care;

     (12) Review capital budget proposals from providers;

     (13) Create a committee to study long-term care and develop a plan to deal with this

health care necessity;

     (14) Create other prohibitions regarding RICHIP participation, and procedures by which

they will be enforced.

     23-94-4. Extent of coverage. -- (a) Eligibility. All qualified Rhode Island residents are

eligible to be covered under RICHIP.

     (b) Registration. The director shall develop procedures by which:

     (1) RICHIP can identify, automatically register, and provide a RICHIP card to qualified

Rhode Island residents identified by September 1, 2016; and

     (2) RICHIP can process applications from individuals seeking to become qualified Rhode

Island residents or obtain RICHIP coverage for dependents after September 1, 2016.

     (c) Disqualification. The director shall establish criteria and procedures for disqualifying

individuals from receiving RICHIP benefits or funds, including for ceasing to be a resident of

Rhode Island, and for RICHIP-related criminal activity (e.g., the fraudulent receiving of benefits

or reimbursements). Disqualified individuals shall be required to reimburse RICHIP for all

benefits or funds they received upon disqualification and may be subject to civil and criminal

penalties.

     (d) Medicare eligible residents. Qualified Rhode Island residents eligible for federal

Medicare ("Medicare eligible residents") shall continue to pay required fees to the federal

government. RICHIP shall establish procedures to ensure that Medicare eligible residents shall

have such amounts deducted from what they owe to RICHIP under §23-94-11. RICHIP shall

become the equivalent of qualifying coverage under Medicare part D and Medicare advantage

programs, and as such shall be the vendor for coverage to qualified Rhode Island residents.

RICHIP shall provide Medicare eligible residents benefits equal to those available to all other

RICHIP participants and equal to or greater than those available through the federal Medicare

programs. To streamline the process, RICHIP shall seek to receive federal reimbursements for

services to Medicare eligible residents and administer all Medicare funds.

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     (e) Medicaid eligible residents. RICHIP shall become the state's sole Medicaid provider.

RICHIP shall create procedures to enroll all qualified Rhode Island residents eligible for

Medicaid ("Medicaid eligible residents" in the federal Medicaid program to ensure a maximum

amount of federal Medicaid funds go to the RICHIP trust fund. RICHIP shall provide benefits to

Medicaid eligible residents equal to those available to all other RICHIP participants.

     23-94-5. RICHIP benefits. -- (a) In general. This chapter shall provide insurance

coverage for services, goods and prescription drugs currently covered under the federal Medicare

program (Social Security Act title XVIII) parts A, B and D. The director may permit additional

medically necessary coverage within the following general categories:

     (1) Primary and preventive care.

     (2) Approved dietary and nutritional therapies.

     (3) Inpatient care.

     (4) Outpatient care.

     (5) Emergency and urgently needed care.

     (6) Prescription drugs.

     (7) Approved medical goods.

     (8) Palliative care.

     (9) Mental health services.

     (10) Dental services, including periodontics, oral surgery, and endodontics.

     (11) Substance abuse treatment services.

     (12) Physical therapy and chiropractic services.

     (13) Vision care and vision correction.

     (14) Hearing services, including coverage of hearing aids.

     (15) Podiatric care.

     (b) RICHIP benefits. RICHIP benefits shall, at a minimum, be the same as those covered

by the federal Medicare program, as defined by applicable federal statute and regulations. The

director shall create a procedure that permits increases in coverage beyond that provided by the

federal Medicare program within the areas set forth in §23-94-5(a) in consultation with the

RICHIP advisory committee.

     23-94-6. Providers. -- (a) Rhode Island providers.

     (1) Licensing. Participating providers must meet state licensing requirements in order to

participate in the program. No provider whose license is under suspension or has been revoked

may participate in the program.

     (2) Participation. All providers may participate in RICHIP by providing items on the

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RICHIP benefits list for which they are licensed. Providers may elect either to participate fully, or

not at all, in the program.

     (3) For Profit providers. For-profit providers may continue to offer services and goods in

Rhode Island, but are prohibited from charging patients more than RICHIP reimbursement rates

for covered services and goods and must notify qualified Rhode Island residents when the

services and goods they offer will not be reimbursed under RICHIP.

     (b) Out-of-state providers. Except for emergency and urgently needed service, as set forth

in §23-94-7, RICHIP shall not pay for health care services obtained outside of Rhode Island

unless the following requirements are met:

     (1) The patient secures a written referral from a qualified Rhode Island physician prior to

seeking such services; and

     (2) The referring physician determines that the services are not available in the state or

cannot be performed within the state at the level of expertise medically necessary.

     (c) Out-of-state provider reimbursement. The program shall pay out-of-state health care

providers an amount not to exceed the RICHIP rate. The qualified Rhode Island resident is

responsible for paying all costs of our-of-state services that fail to meet requirement §§23-94-

6(b)(1) and (b)(2). Qualified Rhode Island residents are responsible for paying out-of-state

providers for costs in excess of RICHIP reimbursements.

     (d) Out-of-state residents. Rhode Island providers who provide any services to

individuals who are not qualified Rhode Island residents shall not be reimbursed by RICHIP and

must seek reimbursement from those individuals or other sources.

     23-94-7. Emergency and urgently needed services exceptions. -- (a) In Rhode Island.

Nothing in this chapter prevents any individual from receiving or any provider from giving

emergency or urgently needed services in Rhode Island. RICHIP shall reimburse all providers for

emergency and urgently needed services given to qualified Rhode Island residents to the extent

provided for under the federal Medicare program in accordance with §23-94-9.

     (b) Out-of-State. The program shall pay for emergency and urgently needed services that

are obtained by qualified Rhode Island residents anywhere outside Rhode Island to the same

extent allowed under the federal Medicare program in accordance with §23-94-9. Qualified

Rhode Island residents are responsible for paying out-of-state providers for costs in excess of

RICHIP reimbursements.

     23-94-8. Private Insurance Companies. -- (a) Non-duplication. It is unlawful for a

private health insurer to sell health insurance coverage to qualified Rhode Island residents outside

of employer-provided health benefit programs that duplicates the benefits provided under this

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chapter.

     (b) Displaced employees. Re-education and job placement of persons employed in

Rhode Island-located enterprises who have lost their jobs as a result of this chapter shall be

managed by the Rhode Island department of labor and training or an appropriate federal

retraining program.

     23-94-9. Provider Reimbursement. -- (a) Rates. RICHIP reimbursements to providers

shall be the same as the federal Medicare program reimbursement rates in effect at the time

services, goods or prescription drugs are provided. If the director determines that there are no

applicable Medicare reimbursement rates or that such rates are significantly different from those

in neighboring states, the director shall create such rates in consultation with the RICHIP

advisory committee.

     (b) Billing and payments. Providers shall submit billing for services to qualified Rhode

Island residents in the form of electronic invoices entered into RIFANS, the state's computerized

financial system. The director shall coordinate the manner of processing and payment with the

office of accounts and control and the RIFANS support team within the division of information

technology. Payments shall be made by check or electronic funds transfer in accordance with

terms and procedures coordinated by the director and the office of accounts and control and

consistent with the fiduciary management of the RICHIP trust fund.

     (c) Provider restrictions. Providers who accept any payment from RICHIP may not bill

any patient for any covered benefit. Providers cannot use any of their operating budgets for

expansion, profit, excessive executive income, marketing, or major capital purchases or leases.

     23-94-10. Budgeting. -- (a) Operating budget. Annually, the director shall create an

operating budget for the program that includes the costs for all benefits set forth in §23-94-5 and

the costs for RICHIP administration. The director shall determine appropriate reimbursement

rates for benefits pursuant to §23-94-9(a).

     (b) Capital Expenditures. The director and the Rhode Island department of administration

office of capital projects shall review the capital expenditure budgets proposed by providers,

including amounts to be spent on construction and renovation of health facilities and major

equipment purchases. To the extent that providers are seeking RICHIP funds for capital

expenditures, the director shall have the authority to approve or deny such funding.

     (c) Prohibition against co-mingling operations and capital improvement funds. It is

prohibited to use funds under this chapter that are earmarked:

     (1) For operations for capital expenditures; or

     (2) For capital expenditures for operations.

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     (d) Limits. The total overhead and administrative portion of the program budget may not

exceed twelve percent (12%) of the total operating budget of the program for the first two (2)

years that the program is in operation; eight percent (8%) for the following two (2) years; and five

percent (5%) for each year thereafter.

     23-94-11. Financing. -- (a) RICHIP trust fund. There shall be established a RICHIP trust

fund into which funds collected pursuant to this chapter are deposited and from which funds are

distributed. The governor or general assembly may provide funds to the RICHIP trust fund, but

may not remove or borrow funds from the RICHIP trust fund.

     (b) Savings. RICHIP will lower health care costs by:

     (1) Eliminating payments for expensive, non-comprehensive private health care

insurance;

     (2) Reducing paperwork and administrative expenses;

     (3) Allowing public health strategic planning; and

     (4) Improving access to preventive health care.

     (c) Funding. Funds sufficient to carry out this chapter shall be obtained in the following

ways and may be changed only by a two-thirds (2/3) majority vote of each house of the general

assembly.

     (1) Seeking the maximum amount of existing and future federal government funds

available for Rhode Island residents' health care, including, but not limited to, funds under the

Medicare program, under title XVIII of the Social Security Act, under the Medicaid program

under title XIX of such act, and under the children's health insurance program under title XXI of

such act;

     (2) Collecting RICHIP premiums;

     (3) Applying any other funds specifically ear-marked for health care or health care

education, such as settlements from litigation.

     23-94-12. Compliance with federal laws. -- RICHIP shall comply with all applicable

federal laws, including the ACA and privacy laws.

     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HEALTH AND SAFETY -- COMPREHENSIVE HEALTH INSURANCE

PROGRAM

***

     This act would repeal the "Rhode Island Health Care Reform Act of 2004 – Health

Insurance Oversight" as well as the "Rhode Island Health Benefit Exchange, and would establish

the Rhode Island comprehensive health insurance program.

     This act would take effect upon passage.

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