2017 -- S 0148 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO HEALTH AND SAFETY - LICENSING OF HEALTH CARE FACILITIES

     Introduced By: Senator Joshua Miller

     Date Introduced: February 01, 2017

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 23-17-28 of the General Laws in Chapter 23-17 entitled "Licensing

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

     23-17-28. Health care cost containment.

     (a) Each health care facility licensed under this chapter shall take any action consistent

with the continued delivery of quality health care services that it deems appropriate to reduce,

limit, or contain health care costs and improve the efficiency with which health care services are

delivered to the citizens of this state. In furtherance of these goals, health care facilities licensed

under this chapter may, to the extent not inconsistent with chapter 15 of this title, enter into

agreements with other health care facilities, associations of health care facilities, suppliers, third-

party payers, and/or agencies or branches of government providing, without limitation, for group

planning, individual or group expenditure ceilings, allocation of services and/or specialties, and

group purchasing and/or service sharing.

     (b) A charging hospital may not charge a risk-bearing hospital, its affiliates, or the

insurer(s) from which the risk-bearing hospital is accepting direct or indirect financial risk, more

than the fee for service reimbursement the charging hospital receives from Medicare for the same

unduplicated service.

     (c) As used in this section:

     (1) "Affiliate" means a legal entity that is in control of, is controlled by or is in common

control with, another legal entity.

     (2) "Charging hospital" means a hospital that is charging a risk-bearing hospital directly

or indirectly, including through an arrangement with an insurer, for the cost of an unduplicated

service provided at the charging hospital.

     (3) "Direct or indirect financial risk" means the potential for monetary gain or loss due to

variations in reimbursement based on the cost, volume or quality of care, including, but not

limited to, payments for unduplicated services provided by an unaffiliated hospital that are based

on shared savings, global budgets, per case reimbursement, capitation, parentage of premium,

and/or achieving quality or utilization measures.

     (4) "Insurer" has the same meaning as set forth in §27-18.4-1.

     (5) "Risk-bearing hospital" means a hospital that has direct or indirect financial risk for

one or more unduplicated services provided by a charging hospital.

     (6) "Unaffiliated hospital" means a hospital that is not an affiliate of another hospital.

     (7) "Unduplicated service" means a hospital service that is routinely provided at the

charging hospital but not at the risk-bearing hospital.

     (d) The department of health shall have the discretion to penalize violations of this

section by either imposing monetary fines on the violating charging hospital not to exceed two

hundred percent (200%) of the financial benefit the charging hospital derived from the violation,

or assess such sanctions on the violating hospital's license as the department considers

appropriate.

     SECTION 2. 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 - LICENSING OF HEALTH CARE FACILITIES

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     This act would prohibit a charging hospital from charging a risk-bearing hospital or the

insurer(s) for the cost of an unduplicated service provided at the charging hospital, more than the

charging hospital received from Medicare for the same unduplicated services.

     This act would take effect upon passage.

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