Sec. A-2. PL 2003, c. 451, Pt. Z, §1, sub-§§1, 2, 3 and 5 are amended to read:

1. The Chancellor of the University of Maine System, referred to in this section as "the chancellor," and any insurance company or 3rd-party administrator acting at the direction of the State, referred to in this section as "the carrier," insuring or administering the University of Maine System health plan for employees and retirees, referred to in this section as "the plan," shall negotiate agreements with hospitals participating in the carrier's provider network to reduce the expense incurred by the plan in state fiscal year 2003-04 by the amount of $2,250,000 and in state fiscal year 2004-05 by the amount of $2,250,000. It is not the intent of the Legislature to require negotiations to reduce such expenses beyond state fiscal year 2005. In undertaking such negotiations, the carrier is deemed at all times to be the agent of the State of Maine and the University of Maine System. The chancellor and the carrier, acting at the direction of the State, may offer or demand negotiate such terms and conditions as the chancellor considers to be in the best interest of the university to reduce the expense of the plan, including, but not limited to, offering or demanding negotiating reductions in standard hospital reimbursement rates, rebates and refunds and uniform terms relating to such reductions, rebates or refunds. The chancellor may not affect or seek to affect amounts paid to hospitals relating to any other customer of the carrier. The hospital discount rate resulting from this specific arrangement is not intended to affect the underlying premium rates for any purpose. This pooling of funds by the State is not intended to affect plan cost recoveries, plan cost structures or the university's ability to negotiate with carriers regarding the plan.

2. The Commissioner of Human Services shall implement appropriate normalizing adjustments, no less than annually, to the public revenue component and the annual periodic interim payments of each hospital under subsection 1, consistent with the requirements of Title XIX of the federal Social Security Act, to offset the impact of any plan-related revenue reduction under this section. If any payment made in accordance with this subsection is subsequently determined to be subject to