2019 -- S 0290

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LC000333

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO HEALTH AND SAFETY -- COMPREHENSIVE HEALTH INSURANCE

PROGRAM

     Introduced By: Senators Bell, Nesselbush, Quezada, Seveney, and Murray

     Date Introduced: February 13, 2019

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Care Reform Act of 2004 - Health Insurance Oversight" is hereby repealed in its entirety.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

     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 the insurers

operate; and efforts to bring new health insurers into the Rhode Island market. Notice of not less

than ten (10) days of the 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 website and given in the newspaper of general circulation, and to any entity in

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writing requesting notice.

     (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 the 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). 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), 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

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finance committees the following information:

     (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 § 27-41-2, 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 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 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 the 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 §§ 27-18.5-9 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-

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

     (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,

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

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 the 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, nor 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.

     (4) To provide a report to the house and senate, on or before January 1, 2017, with

recommendations for establishing guidelines and regulations for systems that give patients

electronic access to their claims information, particularly to information regarding their

obligations to pay for received medical services, pursuant to 45 C.F.R. 164.524.

     (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

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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

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 health-care 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 health-care 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 (m)(1), (m)(2), and (m)(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 health-care delivery and value-

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

     (1) Utilization review;

     (2) Contracting; and

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     (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

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

     (p) To work to ensure the health insurance coverage of behavioral health care under the

same terms and conditions as other health care, and to integrate behavioral health parity

requirements into the office of the health insurance commissioner insurance oversight and health

care transformation efforts.

     (q) To work with other state agencies to seek delivery system improvements that enhance

access to a continuum of mental-health and substance-use disorder treatment in the state; and

integrate that treatment with primary and other medical care to the fullest extent possible.

     (r) To direct insurers toward policies and practices that address the behavioral health

needs of the public and greater integration of physical and behavioral health care delivery.

     (s) The office of the health insurance commissioner shall conduct an analysis of the

impact of the provisions of § 27-38.2-1(i) on health insurance premiums and access in Rhode

Island and submit a report of its findings to the general assembly on or before June 1, 2023.

     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

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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.

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

Federal Act [42 U.S.C. § 18031].

     (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

[42 U.S.C. § 18022].

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

services, as defined in 45 C.F.R. § 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

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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 [42 U.S.C. § 18022],

at which the carrier is offering a plan or plans, shall exclude coverage for abortion services as

defined in 45 C.F.R. § 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 C.F.R. § 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 C.F.R. § 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.

     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

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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.

     42-157-5.1. Small business health options program (SHOP) innovation waiver.

     (a) As small business owners and sole proprietors are the life blood of this state's

economy, a recent change in the Federal Affordable Care Act effective on January 1, 2016, has

caused irreparable harm to the economic well-being of small business owners and sole proprietors

by requiring them to secure health insurance coverage on the individual market as opposed to

securing health insurance coverage on the small group market.

     (b) In an effort to reduce and/or eliminate the irreparable economic harm, the director of

the department of administration, with assistance from the commissioner of health insurance,

shall seek a waiver under Section 1332 of the Patient Protection and Affordable Care Act, Pub. L.

No. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L.

No. 111-152, for the purpose of allowing businesses classified as self-employed and sole

proprietors to purchase insurance in the small group market through the health source RI for

employers SHOP program and not be forced into the individual market.

     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 office of internal audit or a certified public

accounting firm qualified in performance audits.

     (b) If the audit is not directly performed by the state office of internal audit, the selection

of the auditor and the scope of the audit shall be subject to the approval of the state office of

internal audit.

     (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

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perspectives.

     42-157-8. Reporting.

     HealthSource RI shall provide a monthly report to the 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 95

THE RHODE ISLAND COMPREHENSIVE HEALTH INSURANCE PROGRAM

     23-95-1. Legislative findings.

     (a) The general assembly finds the following:

     (1) Rising health care costs are a major economic threat to Rhode Islanders:

     (i) Between 1991 and 2014, health care spending in Rhode Island per person rose by over

two hundred fifty percent (250%) rising much faster than income and greatly reducing disposable

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income; and

     (ii) It is estimated that by 2025, the cost of health insurance for an average family of four

(4) will equal about one-half (1/2) of their annual income; and

     (iv) In the U.S., about two-thirds (2/3) of personal bankruptcies have been medical cost-

related and of these, about three-fourths (3/4) of those bankrupted had health insurance; and

     (v) Rhode Island private businesses bear most of the costs of employee health insurance

coverage and spend significant time and money choosing from a confusing array of increasingly

expensive plans which do not provide comprehensive coverage; and

     (vi) Rhode Island employees and retirees are losing significant wages and pensions as

they are forced to pay higher amounts of health insurance and health care costs; and

     (vii) The state and its municipalities face enormous other post employment benefits

(OPEB) unfunded liabilities mostly due to health insurance costs.

     (b) Although Rhode Island significantly expanded health care coverage for its citizens

under the Federal Affordable Care Act (ACA), it is not enough:

     (1) Currently, about forty-seven thousand (47,000) Rhode Islanders remain uninsured,

and even fully implemented, the ACA would leave forty-two thousand (42,000) Rhode Islanders

four percent (4%) uninsured and many more underinsured - resulting in many excess deaths; and

     (2) Efforts at the federal level to repeal or defund the ACA severely threaten the health

and welfare of Rhode Island citizens.

     (c) The U.S. has hundreds of health insurance providers (i.e., multiple "payers") who

make our health care system unjustifiably expensive and ineffective:

     (1) Every industrialized nation in the world, except the United States, offers universal

health care to its citizens under a "single payer" program and enjoys better health outcomes for

about one-half (1/2) the cost; and

     (2) About one-third (1/3) of every health care dollar spent in the U.S. goes towards

administrative costs (e.g., paperwork, overhead, CEO salaries, and profits) rather than on actual

health care.

     (d) The solution is for Rhode Island to institute an improved Medicare-for-all style single

payer program:

     (1) Health care is rationed under our current multi-payer system, despite the fact that

Rhode Islanders already pay enough money to have comprehensive and universal health

insurance under a single-payer system; and

     (2) Single payer health care would establish a true "free market" system where doctors

compete for patients rather than health insurance companies dictating which patients are able to

LC000333 - Page 14 of 32

see which doctors and setting reimbursement rates; and

     (3) The high costs of medical care could be lowered significantly if the state could

negotiate on behalf of all its residents for bulk purchasing, as well as gain access to usage and

price information currently kept confidential by private health insurers as "proprietary

information;" and

     (4) In 1962, Canada's successful single payer program began in the province of

Saskatchewan (with approximately the same population as Rhode Island) and became a national

program within ten (10) years; and

     (5) Single payer would provide comprehensive coverage that would include vision,

hearing and dental care, mental health and substance abuse services, as well as prescription

medications, medical equipment, supplies, diagnostics and treatments; and

     (6) Health care providers would spend significantly less time with administrative work

caused by multiple health insurance company requirements and barriers to care delivery and

would spend significantly less for overhead costs because of streamlined billing.

     (e) Rhode Island must act because there are currently no effective state or federal laws

that can adequately control rising premiums, co-pays, deductibles and medical costs, or prevent

private insurance companies from continuing to limit available providers and coverage.

     23-95-2. Legislative purpose.

     It is the intent of the general assembly that this chapter establish a universal,

comprehensive, affordable single-payer health care insurance program that will help control

health care costs which shall be referred to as, "the Rhode Island comprehensive health insurance

program" (RICHIP). The program will be paid for by consolidating government and private

payments to multiple insurance carriers into a more economical and efficient improved Medicare-

for-all style single payer program and substituting lower progressive taxes for higher health

insurance premiums, co-pays, deductibles and costs in excess of caps. This program will save

Rhode Islanders from the current overly expensive, inefficient and unsustainable multi-payer

health insurance system that unnecessarily prevents access to medically necessary health care.

     23-95-3. Definitions.

     As used in this chapter:

     (1) "Affordable Care Act" or "ACA" 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.

     (2) "Carrier" means either a private health insurer authorized to sell health insurance in

LC000333 - Page 15 of 32

Rhode Island or a health care service plan, i.e., any person who undertakes to arrange for the

provision of health care services to subscribers or enrollees, or to pay for or to reimburse any part

of the cost for those services, in return for a prepaid or periodic charge paid by or on behalf of the

subscribers or enrollees, or any person, whether located within or outside of this state, who

solicits or contracts with a subscriber or enrollee in this state to pay for or reimburse any part of

the cost of, or who undertakes to arrange or arranges for, the provision of health care services that

are to be provided wholly or in part in a foreign country in return for a prepaid or periodic charge

paid by or on behalf of the subscriber or enrollee.

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

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

Federal Medicare law (42 CFR 422.113).

     (5) "Federally matched public health program" means the state's Medicaid program under

Title XIX of the Federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) and the state's

Children's Health Insurance Program (CHIP) under Title XXI of the Federal Social Security Act

(42 U.S.C. Sec. 1397aa et seq.).

     (6) "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.

     (7) "Medicaid" or "medical assistance" means a program that is one of the following:

     (i) The state's Medicaid program under Title XIX of the Federal Social Security Act (42

U.S.C. Sec. 1396 et seq.); or

     (ii) The state's Children's Health Insurance Program under Title XXI of the Federal Social

Security Act (42 U.S.C. Sec. 1397aa et seq.).

     (8) "Medically necessary" means medical, surgical or other services or goods (including

prescription drugs) required for the prevention, diagnosis, cure, or treatment of a health-related

condition including any such services that are necessary to prevent a detrimental change in either

medical or mental health status. Medically necessary services must be provided in a cost-effective

and appropriate setting and must not be provided solely for the convenience of the patient or

service provider. "Medically necessary" does not include services or goods that are primarily for

cosmetic purposes; and does not include services or goods that are experimental, unless approved

pursuant to § 23-95-6(b).

     (9) "Medicare" means Title XVIII of the Federal Social Security Act (42 U.S.C. Sec.

1395 et seq.) and the programs thereunder.

     (10) "Qualified health care provider" means any individual who meets requirements set

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forth in § 24-95-7(a)(1).

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

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

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

affordable, comprehensive and effective health insurance program as set forth in this chapter.

     (13) "RICHIP participant" means a qualified Rhode Island resident who is enrolled in

RICHIP (and not disenrolled or disqualified) at the time they seek health care.

     23-95-4. Rhode Island health insurance program.

     (a) Organization. This chapter creates the Rhode Island comprehensive health insurance

program (RICHIP), an independent state government agency.

     (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 four (4) years, subject to oversight by an

executive board and input from an advisory committee, as set forth below. 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 duties of the director shall include:

     (1) Employ staff and authorize reasonable expenditures, as necessary, from the RICHIP

trust fund, to pay program expenses and to administer the program, including creation and

oversight of RICHIP budgets;

     (2) Oversee management of the RICHIP trust fund set forth in § 23-95-12(a) to ensure the

operational well-being and fiscal solvency of the program, including ensuring that all available

funds from all appropriate sources are collected and placed into the trust fund;

     (3) Work with the executive board and an advisory committee of health care

professionals and other stakeholders pursuant to §§ 23-95-4(c)(2) and 23-95-4(d)(2) to carry out

the provisions of this chapter;

     (4) Annually establish a RICHIP benefits package for participants, including a formulary

and a list of other medically necessary goods, as well as a procedure for handling complaints and

appeals relating to the benefits package, pursuant to § 23-95-6;

     (5) Establish RICHIP provider reimbursement and a procedure for handling provider

complaints and appeals as set forth in § 23-95-9;

     (6) Implement standardized claims and reporting procedures;

     (7) Provide for timely payments to participating providers through a structure that is well

organized and that eliminates unnecessary administrative costs, i.e., 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);

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

obtain necessary waivers and streamline federal funding and reimbursement;

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

patients and create prohibitions and penalties regarding bad faith or criminal RICHIP

participation, and procedures by which they will be enforced;

     (10) Support the development of an integrated health care database for health care

planning and quality assurance and ensure the legally required confidentiality of all health records

it contains;

     (11) Determine eligibility for RICHIP and establish procedures for enrollment,

disenrollment and disqualification from RICHIP, as well as procedures for handling complaints

and appeals from affected individuals, as set forth in § 29-95-5;

     (12) Create RICHIP expenditure, status, and assessment reports, including, but not

limited to, annual reports with the following:

     (i) Performance of the program;

     (ii) Fiscal condition of the program;

     (iii) Recommendations for statutory changes;

     (iv) Receipt of payments from the federal government;

     (v) Whether current year goals and priorities were met; and

     (vi) Future goals and priorities.

     (13) Review RICHIP collections and disbursements on at least a quarterly basis and

recommend adjustments needed to achieve budgetary targets and permit adequate access to care;

     (14) Review budget proposals from providers pursuant to § 23-95-11(b);

     (15) Develop procedures for accommodating:

     (i) Employer retiree health benefits for people who have been members of RICHIP but go

to live as retirees out of the state;

     (ii) Employer retiree health benefits for people who earned or accrued those benefits

while residing in the state prior to the implementation of RICHIP and live as retirees out of the

state; and

     (iii) RICHIP coverage of health care services currently covered under the workers'

compensation system, including whether and how to continue funding for those services under

that system and whether and how to incorporate an element of experience rating.

     (16) No later than two (2) years after the effective date of this section, develop a

proposal, consistent with the principles of this chapter, for provision and funding by the program

of long-term care coverage.

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     (c) Executive board. There shall be an executive board that provides oversight of the

RICHIP director.

     (1) The members of the executive board shall be as follows:

     (i) The governor, or designee;

     (ii) The treasurer, or designee;

     (iii) The president of the senate, or designee;

     (iv) The speaker of the house of representatives, or designee;

     (v) The secretary of the executive office of health and human services, or designee;

     (vi) The director of the Rhode Island department of health, or designee; and

     (vii) The Rhode Island state controller, or designee.

     All designees shall have significant experience or familiarity with health insurance policy

or finance.

     (2) Duties. The executive board shall exercise oversight over the director to ensure that

the provisions of this title are properly executed and may remove or replace the director.

Meetings shall be convened at least quarterly by the governor. The executive board shall consider

recommendations of the advisory committee and ensure the director responds appropriately. All

decisions of the executive board shall be made by a majority vote of all members.

     (d) Advisory Committee.

     (1) Members. The members of the advisory committee shall be as follows:

     (i) Three (3) physicians, all of whom shall be board certified in their fields, and two (2) of

whom shall be primary care providers, to be appointed by the executive board;

     (ii) Three (3) representatives of the community who represent diverse populations (e.g.,

the elderly, children, etc.), to be appointed by the executive board;

     (iii) A professor of economics familiar with health care finance, to be appointed by the

executive board;

     (iii) The Medicaid director of the Rhode Island executive office of health and human

services, or designee;

     (iv) The behavioral healthcare, developmental disabilities, and hospitals director of the

Rhode Island executive office of health and human services, or designee;

     (v) The executive director of the Rhode Island Dental Association, or designee;

     (vi) The president of the Rhode Island chapter of Physicians for a National Health

Program, or designee:

     (vii) The executive director of the Rhode Island State Nurses Association, or designee;

     (viii) The president of the Hospital Association of Rhode Island, or designee;

LC000333 - Page 19 of 32

     (ix) The CEO of Lifespan, or designee;

     (x) The president of the Mental Health Association of Rhode Island, or designee;

     (xi) The dean of the URI college of pharmacy, or designee;

     (xii) A representative of organized labor, to be appointed by the executive board;

     (xiii) A representative of small business, which is a business that employs less than fifty

(50) people, to be appointed by the executive board; and

     (xiv) A representative of large business, which is a business that employs more than fifty

(50) people, to be appointed by the executive board.

     (2) Duties. The advisory committee shall provide analyses and recommendations to the

executive board and director concerning any issues relating to the execution of this chapter, and

shall collect general concerns of RICHIP participants and providers. The committee shall prepare

a report after each committee meeting summarizing major issues presented and recommendations

for their resolution.

     (3) Procedures. The committee shall adopt and publish its policies and procedures no

later than one hundred eighty (180) days after the first meeting. In addition:

     (i) The director shall set the time, place and date for the initial meeting of the committee.

The initial meeting shall be scheduled not sooner than thirty (30) days nor later than ninety (90)

days after the appointment of the chairperson. Subsequent meetings shall occur as determined by

the committee, but not less than four (4) times annually.

     (ii) The advisory committee shall elect a chair from among its members. The chairperson

may call additional meetings.

     (iii) A quorum shall be at least one more than half (1/2) the number of the advisory

committee members. Vacancies shall not be counted when calculating the number needed for a

quorum.

     (iv) Advisory committee members shall not receive a salary, but shall be reimbursed for

all necessary expenses incurred in the performance of their duties.

     (v) The committee is subject to chapter 46 of title 42 (open meetings act);

     (vi) A committee member shall be deemed to have abandoned office upon failure to

attend at least seventy-five percent (75%) of the committee meetings in one year, without excuse

approved by resolution of the committee.

     (vii) Decisions at meetings of the committee shall be reached by majority vote of those

present in person and those present by electronic or telephonic means which permit, at a

minimum, audio-video communication. Participation in a meeting pursuant to this subsection

shall constitute presence at the meeting.

LC000333 - Page 20 of 32

     (4) Terms.

     (i) The terms of the members shall be four (4) years from the date of appointment or until

a successor has been appointed.

     (ii) Of the initial members of the advisory committee: One-half (1/2) of the members

shall serve initial terms of four (4) years; and one-half (1/2) of the members shall serve initial

terms of two (2) years. The executive board will designate which members shall initially serve

two (2) year terms.

     (iii) After the initial terms, advisory committee members shall serve for a term of four (4)

years.

     (iv) Each vacancy on the committee shall be filled for the unexpired term by appointment

in like manner as in case of expiration of the term of a member of the committee. A vacancy shall

be filled by a representative from the same constituent group as the new member's predecessor.

     23-95-5. Coverage.

     (a) All qualified Rhode Island residents may participate in RICHIP. The director shall

establish procedures to determine eligibility, enrollment, disenrollment and disqualification,

including criteria and procedures by which RICHIP can:

     (1) Identify, automatically enroll, and provide a RICHIP card to qualified Rhode Island

residents;

     (2) Process applications from individuals seeking to obtain RICHIP coverage for

dependents after the implementation date;

     (3) Ensure eligible residents are knowledgeable and aware of their rights to health care;

     (4) Determine whether an individual should be disenrolled (e.g., for leaving the state);

     (5) Determine whether an individual should be disqualified (e.g., for fraudulent receipt of

benefits or reimbursements);

     (6) Determine appropriate actions that should be taken with respect to individuals who

are disenrolled or disqualified (including civil and criminal penalties); and

     (7) Permit individuals to request review and appeal decisions to disenroll or disqualify

them.

     (b) Medicare and Medicaid eligible coverage under RICHIP shall be as follows:

     (1) If all necessary federal waivers are obtained, 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 § 23-95-12(h). RICHIP

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

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advantage programs, and as such shall be the vendor for coverage to RICHIP participants.

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

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

services and goods to Medicare eligible residents and administer all Medicare funds.

     (2) If all necessary federal waivers are obtained, 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.

     (3) If all necessary federal waivers are not granted from the Medicaid or Medicare

programs operated under Title XVIII or XIX of the Social Security Act, the Medicaid or

Medicare program for which a waiver is not granted shall act as the primary insurer for those

eligible for such coverage, and RICHIP shall serve as the secondary or supplemental plan of

health insurance coverage. Until such time as a waiver is granted, the plan shall not pay for

services for persons otherwise eligible for the same health care benefits under the Medicaid or

Medicare program. The director shall establish procedures for determining amounts owed by

Medicare and Medicaid eligible residents for supplemental RICHIP coverage and the extent of

such coverage.

     (4) The director may require Rhode Island residents to provide information necessary to

determine whether the resident is eligible for a federally matched public health program or for

Medicare, or any program or benefit under Medicare.

     (5) As a condition of eligibility or continued eligibility for health care services under

RICHIP, a qualified Rhode Island resident who is eligible for benefits under Medicare shall enroll

in Medicare, including Parts A, B, and D.

     (c) Veterans. RICHIP shall serve as the secondary or supplemental plan of health

insurance coverage for military veterans. The director shall establish procedures for determining

amounts owed by military veterans who are qualified residents for such supplemental RICHIP

coverage and the extent of such coverage.

     (d) This chapter does not create any employment benefit, nor require, prohibit, or limit

the providing of any employment benefit.

     (e) This chapter does not affect or limit collective action or collective bargaining on the

part of a health care provider with their employer or any other lawful collective action or

collective bargaining.

LC000333 - Page 22 of 32

     23-95-6. Benefits.

     (a) This chapter shall provide insurance coverage for services and goods (including

prescription drugs) deemed medically necessary by a qualified health care provider and that is

currently covered under:

     (1) The Federal Medicare program (Social Security Act title XVIII) parts A, B and D;

     (2) The Federal Medicaid program except that long-term care shall be available only to

those who currently qualify for Medicaid coverage;

     (3) The state's Children's Health Insurance Program; and

     (4) All essential health benefits mandated by the Affordable Care Act as of January 1,

2017, including, services and goods within the following categories:

     (i) Primary and preventive care;

     (ii) Approved dietary and nutritional therapies;

     (iii) Inpatient care;

     (iv) Outpatient care;

     (v) Emergency and urgently needed care;

     (vi) Prescription drugs and medical devices;

     (vii) Laboratory and diagnostic services;

     (viii) Palliative care;

     (ix) Mental health services;

     (x) Oral health, including dental services, periodontics, oral surgery, and endodontics;

     (xi) Substance abuse treatment services;

     (xii) Physical therapy and chiropractic services;

     (xiii) Vision care and vision correction;

     (xiv) Hearing services, including coverage of hearing aids;

     (xv) Podiatric care;

     (xvi) Comprehensive family planning, reproductive, maternity, and newborn care; and

     (xvii) Short-term rehabilitative services and devices.

     (b) Additional coverage. The director shall create a procedure in consultation with the

RICHIP advisory committee that may permit additional medically necessary goods and services

beyond that provided by federal laws cited herein and within the areas set forth in § 23-95-5, if

the coverage is for services and goods deemed medically necessary based on credible scientific

evidence published in peer-reviewed medical literature generally recognized by the relevant

medical community, physician specialty society recommendations, and the views of physicians

practicing in relevant clinical areas and any other relevant factors. The director shall create

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procedures for handling complaints and appeals concerning the benefits package.

     (c) Restrictions shall not apply. In order for RICHIP participants to be able to receive

medically necessary goods and services, this chapter shall override any state law that restricts the

provision or use of state funds for any medically necessary goods or services, including those

related to family planning and reproductive health care.

     (d) Medically necessary goods:

     (1) Prescription drug formulary:

     (i) In general. The director shall work with the executive office of health and human

services (EOHHS) Rhode Island pharmacy & therapeutics committee to establish a prescription

drug formulary system, which shall comply with §§ 24-95-6(a)(4)(i) through (a)(4)(xvii) and

encourage best-practices in prescribing and discourage the use of ineffective, dangerous, or

excessively costly medications when better alternatives are available.

     (ii) Promotion of generics. The formulary under this subsection shall promote the use of

generic medications to the greatest extent possible.

     (iii) Formulary updates and petition rights. The formulary under this subsection shall be

updated frequently and the director shall create a procedure for patients and providers to make

requests and appeal denials to add new pharmaceuticals or to remove ineffective or dangerous

medications from the formulary.

     (iv) Use of off-formulary medications. The director shall promulgate rules regarding the

use of off-formulary medications which allow for patient access but do not compromise the

formulary.

     (v) Approved devices and equipment. The director shall work with the executive office of

health and human services (EOHHS) Rhode Island pharmacy & therapeutics committee to

promulgate a list of medically necessary goods that shall be covered by RICHIP and comply

with§§ 24-95-6(a)(4)(i) through (a)(4)(xvii).

     (vi) Bulk purchasing. The director shall seek and implement ways to obtain goods at the

lowest possible cost, including bulk purchasing agreements.

     23-95-7. Providers.

     (a) Rhode Island providers.

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

participate in RICHIP. 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

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

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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 fully under RICHIP.

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

in § 23-95-7(d), 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 that would provide medically

necessary care.

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

providers an amount not to exceed RICHIP rates as set forth in § 23-95-9(a). RICHIP participants

are responsible for paying out-of-state providers for costs in excess of RICHIP reimbursements.

The RICHIP participant is responsible for paying all costs of out-of-state services that fail to meet

the requirements of §§ 23-95-7(b)(1) and (b)(2).

     (d) Out-of-state emergency provider reimbursement. The program shall pay for

emergency and urgently needed services and goods that are obtained by the RICHIP participant

anywhere outside of Rhode Island to the same extent allowed if such services or goods were

provided in Rhode Island in accordance with § 23-95-9. RICHIP participants are responsible for

paying out-of-state emergency providers for costs in excess of RICHIP reimbursements.

     (e) Out-of-state residents.

     (1) In general. Rhode Island providers who provide any services to individuals who are

not RICHIP participants shall not be reimbursed by RICHIP and must seek reimbursement from

those individuals or other sources.

     (2) Emergency care exception. Nothing in this chapter shall prevent any individual from

receiving or any provider from providing emergency health care services and goods in Rhode

Island. The director shall adopt rules to provide reimbursement; however, the rules shall

reasonably limit reimbursement to protect the fiscal integrity of RICHIP. The director shall

implement procedures to secure reimbursement from any appropriate third-party funding source

or from the individual to whom the emergency services were rendered.

     23-95-8. Cross border employees.

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     (a) State residents employed out-of-state. If an individual is employed out-of-state by an

employer that is subject to Rhode Island state law, the employer and employee shall be required

to pay the payroll taxes as to that employee as if the employment were in the state. If an

individual is employed out-of-state by an employer that is not subject to Rhode Island state law,

the employee health coverage provided by the out-of-state employer to a resident working out-of-

state shall serve as the employee's primary plan of health coverage, and RICHIP shall serve as the

employee's secondary plan of health coverage. The director shall establish procedures for

determining amounts owed by residents employed out-of-state for such supplemental secondary

RICHIP coverage and the extent of such coverage.

     (b) Out-of-state residents employed in the state. The payroll tax set forth in § 23-95-12(i)

shall apply to any out-of-state resident who is employed or self-employed in the state. However,

such out-of-state residents shall be able to take a credit for amounts they spend on health benefits

for themselves that would otherwise be covered by RICHIP if the individual were a RICHIP

participant. The out-of-state resident's employer shall be able to take a credit against such payroll

taxes regardless of the form of the health benefit (e.g., health insurance, a self-insured plan, direct

services, or reimbursement for services), to ensure that the revenue proposal does not relate to

employment benefits in violation of the Federal Employee Retirement Income Security Act

("ERISA") law. For non-employment-based spending by individuals, the credit shall be available

for and limited to spending for health coverage (not out-of-pocket health spending). The credit

shall be available without regard to how little is spent or how sparse the benefit. The credit may

only be taken against the payroll taxes set forth in § 23-95-12(i). Any excess amount may not be

applied to other tax liability. For employment-based health benefits, the credit shall be distributed

between the employer and employee in the same proportion as the spending by each for the

benefit. The employer and employee may each apply their respective portion of the credit to their

respective portion of the payroll taxes set forth in § 23-95-12(i). If any provision of this clause or

any application of it shall be ruled to violate ERISA, the provision or the application of it shall be

null and void and the ruling shall not affect any other provision or application of this section or

this chapter.

     23-95-9. Provider reimbursement.

     (a) Rates for services. RICHIP reimbursements to providers shall match the highest

reimbursement rates offered by Medicare or Medicaid to Rhode Island qualified residents that are

in effect at the time services and goods are provided. If the director determines that there are no

such federal reimbursement rates or that such rates are significantly different from those in

neighboring states, the director shall set additional or alternative rates in consultation with the

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RICHIP advisory committee such that rates of reimbursement are fair and reasonable. The

director in consultation with the RICHIP advisory committee shall review the rates at least

annually and shall establish procedures by which complaints about reimbursement rates may be

reviewed and appealed.

     (b) Rates for goods. The prices to be paid to providers for medically necessary goods

(e.g., prescription drugs, approved devices and equipment) shall be established annually by the

director in consultation with the advisory committee.

     (c) Billing and payments. Providers shall submit billing for services to RICHIP

participants 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.

     (d) 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.

     23-95-10. Private insurance companies.

     (a) Non-duplication. It is unlawful for a private health insurer to sell health insurance

coverage to qualified Rhode Island residents that duplicates the benefits provided under this

chapter. Nothing in this chapter shall be construed as prohibiting the sale of health insurance

coverage for any additional benefits not covered by this chapter, including additional benefits that

an employer may provide to employees or their dependents, or to former employees or their

dependents (e.g., multiemployer plans can continue to provide wrap-around coverage for any

benefits not provided by RICHIP).

     (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.

The director may provide funds from RICHIP or funds otherwise appropriated for this purpose

for retraining and assisting job transition for individuals employed or previously employed in the

fields of health insurance, health care service plans, and other third-party payments for health care

or those individuals providing services to health care providers to deal with third-party payers for

health care, whose jobs may be or have been ended as a result of the implementation of the

program, consistent with applicable laws.

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     23-95-11. 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 § 23-95-5 and the costs for RICHIP

administration. The director shall determine appropriate reimbursement rates for benefits

pursuant to § 23-95-9(a). The operating budget shall be reviewed by the advisory committee and

approved by the executive board prior to submission to the governor and general assembly.

     (b) Capital expenditures. The director shall work with the advisory committee,

representatives from state entities involved with provider capital expenditures (e.g., the Rhode

Island department of administration office of capital projects, the Rhode Island Health and

Educational Building Corporation, etc.), and providers to help ensure that capital expenditures

proposed by providers, including amounts to be spent on construction and renovation of health

facilities and major equipment purchases, will address health care needs of RICHIP participants.

To the extent that providers are seeking to use RICHIP funds for capital expenditures, the director

shall have the authority to approve or deny such expenditures.

     (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.

     23-95-12. 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. All money

collected and received shall be used exclusively to finance RICHIP. 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) Revenue proposal. After consulting with the RICHIP advisory committee and gaining

approval of the RICHIP executive board, the director shall submit to the governor and the general

assembly a revenue plan and, if required, legislation (referred to collectively in this section as the

"revenue proposal") to provide the revenue necessary to finance RICHIP. The initial revenue

proposal shall be submitted for the fiscal year commencing the year after this this chapter is

enacted and annually, thereafter. The basic structure of the initial revenue proposal will be based

on a consideration of:

     (1) Anticipated savings from a single payer program;

     (2) Government funds available for health care;

     (3) Private funds available for health care; and

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     (4) Replacing current regressive health insurance payments made to multiple health

insurance carriers with progressive contributions to a single payer (RICHIP) in order to make

health care insurance affordable and remove unnecessary barriers to health care access.

Subsequent proposals shall adjust the RICHIP contributions, based on projections from the total

RICHIP costs in the previous year, and shall include a five (5) year plan for adjusting RICHIP

contributions to best meet the goals set forth in this section and § 23-95-2.

     (c) Anticipated savings. It is anticipated that RICHIP will lower health care costs by:

     (1) Eliminating payments to private health insurance carriers;

     (2) Reducing paperwork and administrative expenses for both providers and payers

created by the marketing, sales, eligibility checks, network contract management, issues

associated multiple benefit packages, and other administrative waste associated with the current

multi-payer private health insurance system;

     (3) Allowing the planning and delivery of a public health strategy for the entire

population of Rhode Island;

     (4) Improving access to preventive health care; and

     (5) Negotiating on behalf of the state for bulk purchasing of medical supplies and

pharmaceuticals.

     (d) Federal funds. The director shall seek and obtain waivers and other approvals relating

to Medicaid, the Children's Health Insurance Program, Medicare, the ACA, and any other

relevant federal programs so that:

     (1) Federal funds and other subsidies for health care that would otherwise be paid to the

state and its residents and health care providers, would be paid by the federal government to the

state and deposited into the RICHIP trust fund;

     (2) Programs would be waived and such funding from federal programs in Rhode Island

would be replaced or merged into RICHIP so it can operate as a single payer program;

     (3) Maximum federal funding for health care is sought even if any necessary waivers or

approvals are not obtained and multiple sources of funding with RICHIP trust fund monies are

pooled, so that RICHIP can act as much as possible like a single payer program to maximize

benefits to Rhode Islanders; and

     (4) Federal financial participation in the programs that are incorporated into RICHIP are

not jeopardized.

     (e) State funds. State funds that would otherwise be appropriated to any governmental

agency, office, program, instrumentality, or institution for services and benefits covered under

RICHIP shall be directed into the RICHIP trust fund. Payments to the fund pursuant to this

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section shall be in an amount equal to the money appropriated for those purposes in the fiscal

year beginning immediately preceding the effective date of this chapter.

     (f) Private funds. Private grants (e.g., from nonprofit corporations) and other funds

specifically ear-marked for health care (e.g., from litigation against tobacco companies, opioid

manufacturers, etc.), shall also be put into the RICHIP trust fund.

     (g) Assignments from RICHIP participants. Receipt of health care services under the plan

shall be deemed an assignment by the RICHIP participant of any right to payment for services

from a policy of insurance, a health benefit plan or other source. The other source of health care

benefits shall pay to the fund all amounts it is obligated to pay to, or on behalf of, the RICHIP

participant for covered health care services. The director may commence any action necessary to

recover the amounts due.

     (h) Replacing current health insurance payments with progressive contributions. Instead

of making health insurance payments to multiple carriers (i.e., for premiums, co-pays,

deductibles, and costs in excess of caps) for limited coverage, individuals and entities subject to

Rhode Island taxation pursuant to § 44-30-1 shall pay progressive contributions to the RICHIP

trust fund (referred to collectively in this section as the "RICHIP contributions") for

comprehensive coverage. These RICHIP contributions shall be set and adjusted over time to an

appropriate level to:

     (1) Cover the actual cost of the program;

     (2) Ensure that higher brackets of income subject to specified taxes shall be assessed at a

higher marginal rate than lower brackets; and

     (3) Protect the economic welfare of small businesses, low-income earners and working

families through tax credits or exemptions.

     (i) Contributions based on earned income. The amounts currently paid by employers and

employees for health insurance shall initially be replaced by a ten percent (10%) payroll tax,

based on the projected average payroll of employees over three (3) previous calendar years. The

employer shall pay eighty percent (80%) and the employee shall pay twenty percent (20%) of this

payroll tax, except that an employer may agree to pay all or part of the employee's share. Self-

employed individuals shall initially pay one-hundred percent (100%) of the payroll tax. The ten

percent (10%) initial rate will be adjusted by the director so that higher brackets of income

subject to these taxes shall be assessed at a higher marginal rate than lower brackets and so that

small businesses and lower income earners receive a credit or exemption.

     (j) Contributions based on unearned income. There shall be a progressive contribution

based on unearned income, i.e., capital gains, dividends, interest, profits, and rents. Initially, the

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unearned income RICHIP contributions shall be equal to ten percent (10%) of such unearned

income. The ten percent (10%) initial rate may be adjusted by the director to allow for a

graduated progressive exemption or credit for individuals with lower unearned income levels.

     23-95-13. Implementation.

     (a) State laws and regulations.

     (1) In general. The director shall work with the executive board and receive such

assistance as may be necessary from other state agencies and entities to examine state laws and

regulations and to make recommendations necessary to conform such laws and regulations to

properly implement the RICHIP program. The director shall report recommendations to the

governor and the general assembly.

     (2) Anti-trust laws. The intent of this chapter is to exempt activities provided for under

this chapter from state antitrust laws and to provide immunity from federal antitrust laws through

the state action doctrine.

     (b) Severability. If any provision or application of this chapter shall be held to be invalid,

or to violate or be inconsistent with any applicable federal law or regulation, that shall not affect

other provisions or applications of this chapter which can be given effect without that provision

or application; and to that end, the provisions and applications of this chapter are severable.

     (c) The director shall complete an implementation plan to provide health care coverage

for qualified residents in accordance with this chapter within six (6) months of the effective date.

     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." This act would also

establish a universal, comprehensive, affordable single-payer health care insurance program and

help control health care costs, which shall be referred to as, "the Rhode Island Comprehensive

Health Insurance Program" (RICHIP). The program will be paid for by consolidating government

and private payments to multiple insurance carriers into a more economical and efficient

improved Medicare-for-all style single payer program and substituting lower progressive taxes

for higher health insurance premiums, co-pays, deductibles and costs due to caps. This program

will save Rhode Islanders from the current overly expensive, inefficient and unsustainable multi-

payer health insurance system that unnecessarily prevents access to medically necessary health

care.

     This act would take effect upon passage.

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