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An Act To Implement the Insurance Payment Reform Recommendations of the Advisory Council on Health Systems Development
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 2 MRSA §104, sub-§7, ¶G, as amended by PL 2009, c. 609, §2, is further amended to read:
 
G. Beginning March 1, 2008 and annually thereafter, making specific recommendations relating to paragraphs A to F and to paragraph H to the joint standing committee of the Legislature having jurisdiction over insurance and financial services matters and the joint standing committee of the Legislature having jurisdiction over health and human services matters and to any appropriate state agency; and
Sec. 2. 2 MRSA §104, sub-§7, ¶H, as enacted by PL 2009, c. 609, §3, is amended to read:
 
H. Reviewing and evaluating strategies for payment reform in the State’s health care system to assess whether proposed payment reform efforts follow the guiding principles developed by the council and identifingidentifying any statutory or regulatory barriers to implementation of payment reform.; and
Sec. 3.  2 MRSA §104, sub-§7, ¶I  is enacted to read:
 
I.  Reviewing pilot projects for payment reform submitted to the Department of Professional and Financial Regulation, Bureau of Insurance pursuant to Title 24-A, section 4319 and assessing whether the pilot projects follow the principles adopted by the council in subsection 11.
Sec. 4.  2 MRSA §104, sub-§11  is enacted to read:
 
11.  Payment reform principles.     The council shall adopt principles for the review of pilot projects to require that payment reform strategies:
 
A.  Support integrated, efficient and effective systems of care delivery and payment;
 
B.  Promote a patient-centered approach to service payment and delivery;
 
C.  Encourage and reward the prevention and management of disease;
 
D.  Promote the value of care over volume to measurably lower costs; and
 
E.  Support payments and processes that are transparent, easy to understand and simple to administer for patients, providers, purchasers and other stakeholders.
Sec. 5. 24-A MRSA §4303, sub-§3-B, as amended by PL 2007, c. 199, Pt. B, §8, is further amended to read:
 
3-B. Prohibition on financial incentives.   A carrier offering or renewing a managed care plan may not offer or pay any type of material inducement, bonus or other financial incentive to a participating provider to deny, reduce, withhold, limit or delay specific medically necessary health care services covered under the plan to an enrollee. This subsection may not be construed to prohibit pilot projects authorized pursuant to section 4319 or to prohibit contracts that contain incentive plans that involve general payments such as capitation payments or risk-sharing agreements that are made with respect to providers or groups of providers or that are made with respect to groups of enrollees.
Sec. 6.  24-A MRSA §4319  is enacted to read:
§ 4319. Payment reform pilot projects
 
1.  Pilot projects.     Beginning January 1, 2012, the superintendent may authorize pilot projects in accordance with this subsection that allow a health insurance carrier that offers health plans in this State to implement payment reform strategies with providers to reduce costs and improve the quality of patient care.
 
A.  The superintendent may approve a pilot project that utilizes payment methodologies and purchasing strategies, including, but not limited to: alternatives to fee-for-service models, such as blended capitation rates, episodes-of-care payments, medical home models and global budgets; pay-for-performance programs; tiering of providers; and evidence-based purchasing strategies.
 
B.  Prior to approving a pilot project, the superintendent shall consult with the Advisory Council on Health Systems Development and consider the recommendation of the council on whether the proposed pilot project is consistent with the principles for payment reform under Title 2, section 104, subsection 11.
 
2.  Rulemaking.     The superintendent shall establish by rule procedures and policies that facilitate the implementation of a pilot project pursuant to this section, including, but not limited to, a process for a health insurance carrier's submitting a pilot project proposal and minimum requirements for approval of a pilot project. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A and must be adopted no later than 90 days after the effective date of this subsection.
 
3.  Report.     Beginning in 2013, the superintendent shall report by March 1st annually to the joint standing committee of the Legislature having jurisdiction over insurance matters on the status of any pilot project approved by the superintendent pursuant to this section. The report must include an analysis of the effectiveness of the pilot project in reducing health care costs including any impact on premiums.
 
4.  Evaluation.     During the First Regular Session of the 129th Legislature, the joint standing committee of the Legislature having jurisdiction over insurance and financial services matters shall conduct an evaluation of the effectiveness of any pilot project approved by the superintendent and make a determination whether to continue, amend or repeal the authorization for a pilot project pursuant to this section. The joint standing committee of the Legislature having jurisdiction over insurance and financial services matters may report out a bill based on the evaluation to the First Regular Session of the 129th Legislature.
Sec. 7. Department of Health and Human Services payment reform demonstration project authorized. Beginning July 1, 2012 and until June 30, 2016, the Department of Health and Human Services may establish a demonstration project to implement payment reform strategies to achieve cost savings within the MaineCare program. The demonstration project must be consistent with the principles for payment reform adopted by the Advisory Council on Health Systems Development in the Maine Revised Statutes, Title 2, section 104, subsection 11. The demonstration project must also include measurable goals consistent with those principles and include methods for monitoring and reporting. The department may adopt rules to implement this section. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.
 
SUMMARY
This bill implements the recommendations of the Advisory Council on Health Systems Development relating to insurance payment reform. The bill adopts principles for payment reform strategies developed by the Advisory Council on Health Systems Development and requires that these principles be used to evaluate pilot project proposals. The bill authorizes the Superintendent of Insurance to permit health insurance carriers to implement payment reform pilot projects beginning January 1, 2012. The bill requires the Superintendent of Insurance to consider the recommendation of the Advisory Council on Health Systems Development before approving a pilot project.
The bill also authorizes the Department of Health and Human Services to conduct a 4-year demonstration project for payment reform to achieve cost savings within the MaineCare program beginning July 1, 2012.