Bill Text - SB505 (2010)

(New Title) establishing the commission on health care cost containment and appropriating a special fund.


Revision: May 26, 2010, midnight

SB 505-FN-A – VERSION ADOPTED BY BOTH BODIES

03/24/10 1178s

21Apr2010… 1329h

05/19/10 2118eba

2010 SESSION

10-2960

01/10

SENATE BILL 505-FN-A

AN ACT establishing the commission on health care cost containment and appropriating a special fund.

SPONSORS: Sen. Hassan, Dist 23; Sen. DeVries, Dist 18; Sen. Cilley, Dist 6; Sen. Gallus, Dist 1; Sen. Houde, Dist 5; Sen. Fuller Clark, Dist 24; Rep. Butler, Carr 1; Rep. Schlachman, Rock 13; Rep. Rosenwald, Hills 22; Rep. Dokmo, Hills 6

COMMITTEE: Commerce, Labor and Consumer Protection

AMENDED ANALYSIS

This bill establishes the commission on health care cost containment and establishes a one-time assessment on hospitals, ambulatory surgical facilities, and health carriers to fund the operation of the commission.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/24/10 1178s

21Apr2010… 1329h

05/19/10 2118eba

10-2960

01/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Ten

AN ACT establishing the commission on health care cost containment and appropriating a special fund.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Commission on Health Care Cost Containment. Amend RSA by inserting after chapter 21-R the following new chapter:

CHAPTER 21-S

COMMISSION ON HEALTH CARE COST CONTAINMENT

21-S:1 Findings and Purpose.

I. The health and well-being of the people of this state is dependent on the implementation of health care payment reforms that contain costs while maintaining and improving health care quality.

II. Federal health care reform holds promise to improve health care coverage and access to care for New Hampshire citizens, and to bring about health care payment reforms that will improve efficiency and reward quality.

III. It is imperative that New Hampshire take action to implement payment reforms that will complement the federal reforms, and that will contain health care costs.

21-S:2 Commission on Health Care Cost Containment Established. There is established a commission on health care cost containment to make recommendations to contain costs and improve quality. The commission shall examine current contracting and reimbursement practices with regard to hospital services, ambulatory surgical facilities, and health insurance carriers, as well as health care cost reimbursement by public payers and the uninsured to make recommendations for changes in the system for financing these health care services. The commission’s recommendations shall take into account and be coordinated with H.R. 3590, the Patient Protection and Affordable Care Act, and H.R. 4872, the Health Care and Education Reconciliation Act of 2010.

21-S:3 Definitions. In this chapter:

I. “Ambulatory surgical facility” means “ambulatory surgical facility” as defined in RSA 151-C:2, I.

II. “Commission” means the New Hampshire commission on health care cost containment, established in RSA 21-S:2.

III. “Health carrier” means any entity subject to the insurance laws and rules of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to provide, deliver, arrange for, pay for, or reimburse any of the costs of health services, including an insurance company, a health maintenance organization, a nonprofit health services corporation, or any other entity providing health coverage.

IV. “Hospital” means “hospital” as defined in RSA 151-C:2, but not including governmental facilities.

V. “Hospital services” means:

(a) Inpatient hospital services as enumerated in Medicare regulation 42 C.F.R. section 409.10, as amended;

(b) Emergency services; and

(c) Outpatient services that are billed to commercial payers or individual purchasers as hospital services.

21-S:4 Membership; Compensation; Consultations.

I. The members of the commission shall represent the public interest, shall not have a present connection with any hospital, ambulatory surgical facility, or health carrier, and shall consist of the following members:

(a) Two members of the senate, one of whom shall be a member of the majority party, appointed by the president of the senate and one of whom shall be a member of the minority party, appointed by the minority leader of the senate.

(b) Two members of the house of representatives, one of whom shall be a member of the majority party, appointed by the speaker of the house of representatives and one of whom shall be a member of the minority party, appointed by the minority leader of the house of representatives.

(c) One representative of the Citizens Health Initiative, appointed by the governor.

(d) The commissioner of the department of health and human services, or designee.

(e) The insurance commissioner, or designee.

(f) A public member with a background in health care policy, appointed by the governor.

(g) A public member with a background in health care economics, appointed by the governor.

(h) A public member with sufficient knowledge and expertise to represent the interests of health care consumers, appointed by the governor.

(i) A representative of the small business community with knowledge of health care issues for businesses, appointed by the governor.

II. Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

III. The commission shall elect a chair from its members at its first meeting.

IV. The commission shall hold public hearings and consult with hospital representatives, insurer representatives, consumers and consumer representatives, health care economists, and other available individuals and organizations with expertise or interest in hospital cost containment and federal health reform initiatives. The commission may consider state or national research and reports relative to health care cost containment and payment reform initiatives designed to improve the efficiency and quality of care. In addition, in developing its recommendations, the commission shall review and consider the report of the committee appointed pursuant to 2009, 77 to study the certificate of need process, and review and consider the report of the commission appointed pursuant to 2009, 265 to study hospital billing practices of health care providers.

21-S:5 Initial Meeting; Final Report. The commission shall have its initial meeting by September 1, 2010. The initial meeting shall be called by the first-named senate member. The commission shall submit its final report, with findings and recommendations, including recommendations for legislation to the president of the senate, the speaker of the house of representatives, the senate clerk, the house clerk, the governor, and the state library on or before July 1, 2012.

21-S:6 Duties. The commission shall examine the existing health care cost reimbursement system, in cooperation with and furtherance of any changes under federal health care reform. The commission’s investigation shall include examination of the following issues:

I. The impact of the existing system of cost reimbursement on the availability and access to health care services for persons in rural and underserved parts of the state.

II. The impact of the existing system of payment on access to health care services by the uninsured.

III. The impact of hospital subsidy of other community health care services on hospital pricing.

IV. The relationship between the price of specific services and the costs of providing those services.

V. The relationship between a health care facility’s pricing and the amount of free and subsidized care provided, as well as the amount of care sponsored by public payers.

VI. The effect of managed care contracting and network contracting requirements on the competitiveness of New Hampshire’s health insurance market.

VII. Options for increasing transparency about the price of health care services.

VIII. Options for reimbursement system change that would create and/or increase incentives to contain unit costs and utilization and to reward the delivery of efficient and effective care.

IX. Options for implementing a common payment system and including public payers, Medicaid and Medicare, in such a system.

X. Options for the establishment of a publicly administered program to disseminate health care cost data to consumers, health care providers, and insurers that would provide meaningful cost comparison information.

21-S:7 Recommendations. Upon completion of its examination of the existing health care payment system, federal health reform, and options for containing costs in the system, the commission shall issue a report with recommendations for effecting changes to the system that will:

I. Promote price transparency and provide consumers with sufficient information to make informed health care choices.

II. Allow for the coordination of health care payment reforms across all private and public payers to create uniform incentives to improve the efficiency and quality of care.

III. Contain the increases in health care costs and utilization to a level that is consistent with the best performing systems, states, or regions.

IV. Provide incentives for containing unit costs and utilization and reward the delivery of efficient and effective quality care.

V. Reduce or eliminate payment discrimination against the uninsured who lack the financial resources to obtain health insurance.

VI. Promote more affordable health insurance and encourage competition in the health insurance market.

21-S:8 Commission on Health Care Cost Containment Fund.

I. There is hereby established in the state treasury a special fund to support the operations of the commission on health care cost containment that shall consist of moneys from the assessment on hospitals, ambulatory surgical facilities, and health carriers authorized under this chapter. Moneys from any other source may also be deposited in the fund. The fund shall be non-lapsing and continually appropriated to the commission. The fund shall be invested and reinvested in the same manner as other state funds. Any investment earnings shall be retained to the credit of the fund. The fund shall be used only to provide funding for the commission and for the purposes authorized under this chapter. Subsequent to submitting its final report and prior to the repeal of this chapter, any money remaining in the fund shall be refunded to hospitals, ambulatory surgical facilities, health carriers, or other contributors in proportion to each entity’s original contribution to the fund.

II. The fund shall be capitalized through a one-time assessment administered by the department of administrative services. The assessment shall be allocated 50 percent to health carriers, as defined in RSA 420-G:2, with at least 1,000 covered lives in the state, in proportion to gross premiums written, and 50 percent to hospitals, as defined in RSA 151-C:2, XX, and ambulatory surgical facilities, as defined in RSA 151-C:2, I, in proportion to net operating revenue. The total amount of the assessment shall be $250,000. The department of health and human services and the insurance department shall each certify to the department of administrative services the allocated assessment for each affected health carrier, hospital, and ambulatory surgical facility by August 1, 2010.

21-S:9 Powers of the Commission. The commission may accept and expend moneys from the fund or as otherwise made available for its purposes. The commission may retain experts or administrative support, may enter into memoranda of understanding with other state agencies to obtain staff support, information, or data, may solicit relevant information from insurance carriers, hospitals, ambulatory surgical facilities, and other health care providers, and may hold hearings to fulfill its responsibilities. The commission shall be administratively attached, pursuant to RSA 21-G:10, to the department of administrative services. No action of the commission shall be considered official unless approved by a majority vote of the commission. The commission shall have all other powers reasonably necessary to accomplish its purposes under RSA 21-S:1, including the power to deem documents received and reviewed by it to be proprietary and subject to confidentiality protection.

2 New Subparagraph; Commission on Health Cost Containment Fund Amend RSA 6:12, I(b) by inserting after subparagraph (299) the following new subparagraph:

(300) Moneys deposited into the commission on health care cost containment fund, established in RSA 21-S:8.

3 Repeals. The following are repealed:

I. RSA 6:12, I(b)(300), relative to the commission on health care cost containment fund.

II. RSA 21-S, relative to the commission on health care cost containment.

4 Effective Date.

I. Section 3 of this act shall take effect July 1, 2012.

II. The remainder of this act shall take effect upon its passage.

LBAO

10-2960

Revised 03/02/10

SB 505 FISCAL NOTE

AN ACT establishing the New Hampshire health services cost review commission and continually appropriating a special fund.

FISCAL IMPACT:

      The Departments of Health and Human Services and Administrative Services state this bill would have an indeterminable fiscal impact on state revenue and expenditures in FY 2011 and each year thereafter. This bill would have no fiscal impact on county and local revenue or expenditures.

METHODOLOGY:

    This Department of Health and Human Services (DHHS) states this bill creates a new quasi-governmental commission, the Health Care Services Cost Review Commission. The Commission would be composed of 3 commissioners who would be full-time employees appointed with staggered terms with salaries determined pursuant to RSA 94:1-d. The bill also allows the Commission to appoint an executive director position, with Governor and Council approval. The Commission shall employ such staff and obtain such office space as is necessary to carry out its functions. The Commission, in consultation with the executive director, shall determine the required staffing. The bill establishes a dedicated fund to fund the operation of the Commission. The bill would require the Commission to assess and collect an administrative assessment on hospitals which would be deposited into the newly established fund. The bill requires the first assessment for FY 2011 to be made on September 1, 2010 and shall be in the aggregate of $1,500,000. In FY 2012 and each year thereafter the total budget appropriation of the Commission would be capped at $3,500,000 annually.

    DHHS states there would be an impact resulting from the Commission’s reliance upon data culled from the Comprehensive Health Information System (CHIS) which is housed & managed in DHHS. It is possible that the demand for claims data and analysis thereof will outpace the present staffing structure. The Department also states it is possible that the Commission would require the Medicaid program to utilize the statewide common hospital billing methodology. This would require reprogramming of the state’s Medicaid Management Information System (MMIS). The cost of such reprogramming cannot be determined at this time because it is not known what payment methodology the Commission will select and whether Medicaid will be mandated for follow it. DHHS also anticipates that the work of the Commission could impact the present Disproportionate Share Hospital (DSH) payment structure as well as the uncompensated care program operated by Medicaid. Neither impact can be quantified at this time.

    The Department of Administrative Services states in calendar year 2009, the State paid over $88 million for inpatient and outpatient hospital services for its employees and retires. The Department states if the bill is enacted and achieves its stated purpose, it may reduce the State’s hospital care expenditures in the future by some indeterminate amount.