Health Care Affordability 3

SECTION 52. Chapter 176B of the General Laws is hereby amended by striking out section 4, as so appearing, and inserting in place thereof the following section:-

Section 4. Contracts for medical, chiropractic, visual, surgical, and other health services; approval, subscription certificates; classification of risks

(a)          Any medical service corporation may enter into contracts with its subscribers, and with participating physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services licensed under the laws of the commonwealth for such medical, chiropractic, visual, surgical, midwifery, mental health and other health services as may lawfully be rendered by them to subscribers and their dependents and shall make payment for such services either, or directly to participating providers or to nonparticipating providers if the subscriber is covered by a Preferred Provider Organization, as provided for in this chapter. The form of any and all agreements with such participating physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services shall at all times be subject to the written approval of the commissioner, but no participating provider shall be denied the right to enter into any agreement with any medical service corporation by reason of any unfair or arbitrary discrimination. The methods of compensating such physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services for their services to subscribers, or covered dependents shall at all times be subject to the written approval of the commissioner. A contract between a medical service corporation and a provider of home health services or a licensed hospice agency shall not require the participating home health provider or participating licensed hospice agency to be accredited by the Joint Commission on Accreditation of Healthcare Organizations or other national accrediting body if the agency is certified for participation in the Medicare program, Title XVIII of the federal Social Security Act, 42 U.S.C. Sections 1395 et seq.

(b)          Any agreement between a medical service corporation and a person whereby such corporation undertakes to furnish benefits for medical service to said person and his covered dependents, if any, shall be considered a non-group medical service agreement. The subscriber contracts, rates and evidence of coverage shall be subject to the disapproval of the commissioner. No such contracts shall be approved if the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates are excessive, inadequate or unfairly discriminatory. Classifications shall be fair and reasonable. Nongroup agreements, except contracts providing supplemental coverage to Medicare or other governmental programs that are subject to the provisions of chapter 176K , shall also be subject to the provisions of chapter 176M and any regulations promulgated thereunder. To the extent that this section is inconsistent with the provisions of chapter 176K or chapter 176M , and any regulations promulgated thereunder, Medicare supplement insurance plans as defined in said chapter 176K shall be subject to the provisions of said chapter 176K , and non-group agreements shall be subject to chapter 176M .

(c)          Any such corporation shall make available each type of Medicare supplemental coverage allowed by the commissioner of insurance to any resident of the commonwealth whose coverage under a Medicare program offered by a health maintenance organization licensed under chapter 176G has been cancelled because the health maintenance organization's contract with Medicare has been terminated. Such coverage shall be offered without any waiting periods or exclusions for pre-existing conditions and shall become effective on the date that the coverage is cancelled.

(d)          Any agreement between a medical service corporation and a group of two or more persons or with the employer, employers or other representatives of such group whereby the medical service corporation undertakes to furnish benefits for medical service to said persons and to their covered dependents, if any, shall be considered a group medical service agreement; provided, however, that eligible persons in a group who are enrollees under a group health maintenance contract, as defined in section one of chapter 176G, shall be included for purposes of determining the number of persons within a group having a medical service agreement.

(e)          Under such a group medical service agreement, subscription certificates and the rates charged by the corporation to the subscribers shall be filed with the commissioner within thirty days after their effective date, and shall be subject to subsequent disapproval by the commissioner if he finds that the benefits provided therein are unreasonable in relation to the rate charged, or that the rates charged are excessive, inadequate or unfairly discriminatory; and provided that group plan contracts issued and rates charged by a nonprofit medical service corporation to its subscribers providing supplemental coverage to Medicare shall be subject to the provisions of chapter 176K if the subscribers, and not their employer, employers or representatives, are billed directly for such contracts. No classification of risk may be established on the basis of age. In disapproving any rate under this section, the commissioner shall make a finding on the basis of information submitted by a medical service corporation, that such corporation employs a utilization review program and other techniques acceptable to him which have had or are expected to have a demonstrated impact on the prevention of reimbursement by such corporation for services which are not medically necessary. The commissioner may make and, at any time, alter or amend, reasonable rules or regulations to facilitate the operation and enforcement of this section and to govern hearings and investigations thereunder. He may issue such orders ashe finds proper, expedient or necessary to enforce and administer the provisions of this section and to secure compliance with any rules and regulations made thereunder.

(f)          The open enrollment period and coverage effective date for any group medical service plan contract providing supplemental coverage to Medicare shall be the same as the open enrollment period of all other group health plan options offered by the employer, representative or group sponsor to the group's members who are eligible for Medicare supplemental coverage.

(g)          Nothing in this section shall be construed to prohibit as unreasonable or unfairly discriminatory the establishment of classifications or modifications of classifications of risks based upon size, expense, management, individual experience, purpose, location or dispersion of hazard or any other reasonable considerations, or to prohibit retrospective refunds. Acquisition costs in connection with the solicitation of subscribers and costs of administration shall at all times be limited to such amounts as the commissioner shall approve.


(h)          The subscriber's contracts, rates and evidence of coverage shall be subject to the disapproval of the commissioner. No such contracts shall be approved if the benefits provided therein are unreasonable in relation to the rate charged, or if the rates are excessive, inadequate or unfairly discriminatory. Classifications shall be fair and reasonable.

(i)          Except for coverage under a Medicare Part C arrangement or under the MassHealth program, for all insured health benefit plan rates intended to be effective on and after July 1, 2018, the carrier's health benefit plan rates are to be filed with the commissioner and considered presumptively disapproved as excessive, and subject to a mandatory rate hearing, if the carrier's network provider reimbursement rates are not set in accordance with the following requirements established by the division of insurance (in this section, the "division"), in consultation with the executive office of health and human services and the center for health information and analysis:


1)          Acute Hospitals: the weighted average rate of reimbursement for inpatient and outpatient services for contracting network acute hospitals is reviewed in relation to the average Medicare hospital rate for the service and assigned to one of three tiers and the weighted average rate of reimbursement change for a hospital in the tier does not exceed the annual rate of change identified in the following clauses:

(i)          Tier 1: The weighted average rate of change is not limited;
(ii)          Tier 2: The weighted average rate of change may not increase in the future rate year by more than 1 per cent above the weighted average rate for the current year;
(iii)          Tier 3: The weighted average rate of change may not increase in the future rate year above the weighted average rate for the current year;

2)          Professional Services: the weighted average rate of reimbursement for services delivered by non- primary care and non- behavioral health providers is reviewed in relation to the weighted average Medicare fee schedule for the service and the provider is assigned to one of three tiers, and the average weighted rate of reimbursement change for a provider in the tier does not exceed the annual rate of change identified in the following clauses:

(i)          Tier 1: The weighted average rate of change is not limited;
(ii)          Tier 2: The weighted average rate of change may not increase in the future rate year by more than 1 per cent above the weighted average rate for the current year;
(iii)          Tier 3: The weighted average rate of change may not increase in the future rate year above the weighted average rate for the current year;

(j)          Notwithstanding the generality of paragraphs (1) and (2) above, the division, in consultation with the executive office of health and human services and the center for health information and analysis, shall establish a methodology for assigning providers to an appropriate tier if the provider does not receive sufficient Medicare reimbursement due to the services the provider delivers.

(k)          The division, in consultation with the executive office of health and human services, may review and make recommendations to revise the growth rates established in this section every 3 years.

(l)          The health benefit plan weighted average rates of reimbursement for services delivered by primary care providers and behavioral health providers are exempt from, and shall not be impacted by, the provisions of subsection (i) of this section.

(m)          In preparing rates, carriers may exercise flexibility in the administration of the growth rate restrictions set forth in subsection (i) provided that they do so in a nondiscriminatory manner that is consistent with regulations promulgated by the division.

(n)          Notwithstanding the provisions of subsection (i) of this section, if a provider that has an alternative payment contract such as an accountable care organization or other value based payment arrangement with the carrier that includes both significant downside risk and significant participation from the carrier's enrollees, based on minimum standards established by the division, in consultation with the executive office of health and human services, then the carrier, when developing its health benefit plan rates, may allow for up to a 1 per cent higher increase in the average weighted rate of reimbursement for that provider than is permitted under subsection (i) of this section.

(o)          The division, in consultation with the executive office of health and human services, shall establish standards for eliminating administrative facility fees for services provided in clinics, including but not limited to satellite clinics operating under a hospital license. Notwithstanding the generality of the foregoing, the division may promulgate regulations that allow for administrative facility fees under appropriate circumstances. Rates will be presumptively disapproved if carriers have any arrangement with a provider that allows the carrier to pay for an administrative facility fee inconsistent with such standards or which permits the provider to balance bill a covered member for any such administrative facility fees. The division, in consultation with the executive office of health and human services, shall also establish requirements that carriers reinvest a portion of the savings into higher rates of reimbursement for standalone professional services including, but not limited to, primary care or behavioral health services or into reduced premiums for health benefit plan members.

(p)          The division, in consultation with the executive office of healthand human services and the center for health information and analysis, shall promulgate regulations to implement the provisions of this section.



Summary:
This is one of four sections that establish tiered caps on the rate of growth for all acute hospitals and professional service providers, except behavioral health and primary care providers. These sections also authorize the Division of Insurance and the Executive Office of Health and Human Services to establish standards for eliminating administrative facility fees and requiring health plans to reinvest savings into reduced premiums for consumers or higher rates for professional services, including behavioral health and primary care services.