Senate Approves Reforms to Improve Efficiency, Quality of Health Care

The Senate approved legislation on Tuesday to substantially reform health care in Rhode Island and control costs for families and businesses while increasing the quality of care and transparency.

The Rhode Island Health Care Reform Act of 2013 (2013-S-540Aaa) is a key element of the Senate leadership’s “Moving the Needle” economic development legislative package. The Rhode Island Office of Management and Budget’s 2013 Small Business Survey, released in April,identified health insurance costs as the No. 1 challenge faced by the state’s small businesses.

The bill, which is co-sponsored by Sen. Christopher Scott Ottiano (R-Dist. 11, Portsmouth, Bristol, Tiverton), aims to innovate and modernize Rhode Island’s health care system and continually evaluate practices and laws to help ensure efficiency and effectiveness.

“Slowing the rapid rise of health care costs while ensuring high-quality care for Rhode Island is the goal of this bill, but it’s important to realize that goal is a moving target, especially at a time when the Affordable Care Act is about to take effect and the state is opening the Health Benefits Exchange. For that reason, this bill includes a number of elements involving monitoring, reporting and continual evaluation to make sure that when health care needs and costs shift, the health care delivery system evolves too,” said Health and Human Services Committee Chairman Sen. Joshua Miller (D-Dist. 28, Cranston, Providence.)

The legislation was developed partly as a result of the findings of an earlier legislative commission chaired by Senator Miller that studied the state’s hospitals in 2011. The Special Senate Commission to Study Cost Containment, Efficiency, and Transparency in the Delivery of Quality Patient Care and Access by Hospitals identified, among other findings, a need for new and innovative payment methodologies and greater transparency and consumer information in health care costs.

The legislation also builds on previous legislative work, such as the creation of the Office of the Health Insurance Commissioner in 2004 to protect consumers and broaden the accountability of health insurers, as well as health care innovation initiatives such as payment reforms, patient centered medical homes, and implementation of electronic health records.

The Rhode Island Health Care Reform Act of 2013 would:

Move to control costs:

·       To control costs and improve quality of care, the legislation would allow the Office of the Health Insurance Commissioner to monitor the transition from traditional fee-for-service payments to alternative models, including global payments, cost sharing, bundled payments other alternative payments to achieve savings for taxpayers.

·       Expand the patient-centered medical home program for individuals with chronic health conditions that are high-frequency users through the state employee health benefit plan.

·       Require Office of the Health Insurance Commissioner, the Health Department and Lieutenant Governor’s Office to develop a report that proposes standards for the certification of affordable care organizations as an alternative structure for care delivery and payment. 

·       Review the impact of the current mandated health care benefits on the cost of health insurance for fully insured employers.

Increasing transparency:

·       Require the Health Department to review hospital reporting on pay and compensation and financial disclosure and transmit to the Health Planning and Accountability Advisory Council.

·       Require the Health Planning and Accountability Advisory Council to review health plans’ rate compliance as it relates to state and federal mental health parity laws.

·       Require that all new legislation must contain purposes and objectives of any proposed health benefit mandate, including measurable goals expected to be achieved by the new or expanded benefit mandate.

·       Institute a state-by-state comparison of health insurance mandates that includes the extent to which Rhode Island mandates exceed other states benefits.

·       Require the Health Planning and Accountability Advisory Council to coordinate a comprehensive review of mental health and substance abuse incidence rates, capacity and potentially high and rising spending.

Addressing Market Power:

·        Establish biannual reports on hospital payment variation, including findings and recommendations.

·        Require the Health Planning and Accountability Advisory Council to review the Rhode Islandhealth system’s total cost drivers and provide findings, and related recommendations. 

·        Require the Health Planning and Accountability Advisory Council to examine the volume and spending trends for pediatric inpatient and outpatient services, including the evolving role of intensive care units.

Improve Access and Quality:

·       Require the Office of the Health Insurance Commissioner to monitor 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.

·       Establish additional reporting and transparency requirements for hospitals’ adverse medical errors.

·       Establish periodic assessments on projected workforce needs among primary care providers, including supply and demand, recruitment, scope and practice, workforce training, incentives and recommendations.

·       Establish standards consistent with the National Committee for Quality Assurance or other accrediting organizations for patient-centered medical homes, whenever feasible, in Rhode Island.

The legislation is also cosponsored by, Sen. Gayle L. Goldin (D-Dist. 3, Providence), Sen. Catherine Cool Rumsey (D-Dist. 34, Exeter, Charlestown, Hopkinton, Richmond, West Greenwich), and Sen. Donna M. Nesselbush (D-Dist. 15, Pawtucket, North Providence). It will now be forwarded to the House of Representatives.