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Introduced by Representative Koch of Barre Town

H.649

Introduced by Representative Koch of Barre Town

Referred to Committee on

Date:

Subject:  Health care; common claims administration; consumer price and quality information; multi-payer data collection; Medicaid enrollment; Medicaid cost shift; healthy choices insurance discount; public health; safe apology; adverse event reporting

Statement of purpose:  This bill proposes to:  (1) assign accountability for the coordination of Vermont’s health care system reform initiatives to the secretary of administration; (2) require greater standardization in claims administration; (3) establish a consumer price and quality information system; (4) enhance the multi-payer data collection project; (5) engage in a Medicaid enrollment initiative; (6) establish a process for reducing the Medicaid cost shift; (7) authorize healthy choices insurance discounts; (8) authorize public health initiatives in the department of health and the department of disabilities, aging, and independent living; (9) provide that an expression of apology by a health care provider does not constitute an admission of liability; and (10) authorize the department of health to establish an adverse event reporting system.

AN ACT RELATING TO HEALTH CARE SYSTEM REFORM

It is hereby enacted by the General Assembly of the State of Vermont:

* * * Health Care System Reform Initiatives * * *

Sec. 1.  18 V.S.A. § 9421 is added to read:

§ 9421.  IMPROVING QUALITY AND AFFORDABILITY THROUGH

              HEALTH CARE SYSTEM REFORM

(a)  The secretary of administration, working in collaboration with the general assembly, shall be responsible for the coordination between executive branch agencies, departments, and offices of a common sense strategy of health care system reform designed to achieve the following goals:

(1)  Improved health care quality and affordability in patient care.

(2)  Promotion of healthy behavior and disease prevention across the lifespan of individual Vermonters.

(b)  The secretary of administration shall ensure that those executive branch agencies, departments, and offices responsible for the development and implementation of Vermont’s health care system reform initiatives do so in a timely manner.  The secretary may appoint a project manager to assist the secretary in the performance of his or her health care system reform responsibilities.

(c)  The secretary of administration shall report to the governor and the general assembly on or before January 15, 2007 and every two years thereafter with a five-year strategic plan for implementing Vermont’s health care system reform initiatives, together with any administrative or legislative recommendations.

(d)  Vermont’s health care system reform initiatives include, but are not limited to:

(1)  The Vermont blueprint for health - the chronic care initiative.

(2)  The Vermont health information technology project.

(3)  The multi-payer data collection project.

(4)  The common claims administration project.

(5)  The consumer price and quality information system.

(6)  The public health promotion and disease prevention programs of the department of health, and the department of disabilities, aging, and independent living.

(7)  The managed care organization activities authorized by the Medicaid Global Commitment waiver.

(e)  The commissioner of health shall be responsible for the development and implementation of the Vermont blueprint for health - the chronic care initiative.  The commissioner of health, working in collaboration with the blueprint leadership, shall:

(1)  Prepare and implement a five-year strategic plan.  The plan shall include, but not be limited to:

(A)  Explicit timelines for achievement of the goals and objectives of the plan.

(B)  The development and implementation of measurable standards for the management and treatment of at least four chronic conditions.

(C)  A financial plan that provides adequate financial support for the blueprint.

(2)  Collaborate with the commissioner of banking, insurance, securities, and health care administration and the Vermont information technology leaders (“VITL”) to ensure that the blueprint’s chronic disease information system and VITL’s electronic medical record project are developed and coordinated in an appropriate and cost-effective manner, and in a manner designed to improve the quality and affordability of patient care.

(f)  The commissioner of health, the commissioner of disabilities, aging, and independent living, the commissioner of banking, insurance, securities, and health care administration, and the director of the office of Vermont health access shall ensure that Vermont’s health care system reform initiatives, identified in subsection (d) of this section, are developed, implemented, and coordinated in an appropriate and cost-effective manner, and in a manner designed to improve the quality and affordability of patient care.


* * * The Common Claims Administration Initiative * * *

Sec. 2.  18 V.S.A. § 9408 is amended to read:

§ 9408.  COMMON CLAIMS FORMS AND PROCEDURES

(a)  No later than January 15, 1993, the commissioner shall adopt by rule uniform health insurance claims forms, and uniform standards and procedures for the processing of claims, including electronic claims forms submission.

(b)  No later than January 15, 2008, the commissioner shall adopt amended rules pursuant to this section designed to lower administrative costs and improve the efficiency and effectiveness of the claims administration system.  On or before July 1, 2006, the commissioner shall convene an advisory committee to assist the commissioner in the development of amended rules, consisting of the commissioner of health, the director of the office of Vermont health access, health care providers and facilities, health insurers, individual and business consumers and payers, and other individuals or groups designated by the commissioner.  In adopting such rules, the commissioner shall consider the potential public benefit to be derived from implementation of such rules, the cost and the capacity of health care facilities, health care providers, or health insurers to comply with the requirements of such rules, and any other relevant consideration.  The commissioner’s rules may include but are not limited to greater standardization or uniformity in connection with:

(1)  Claims forms, patient invoices, and explanation of benefits forms.

(2)  Payment codes.

(3)  Claims submission and processing procedures, including electronic claims processing.

(4)  Utilization review standards and procedures.

(5)  Benefit plan design.

(6)  Prescription drug formularies.

(7)  Provider credentialing.

(8)  Any other element of the claims administration system which could be made more efficient and effective through greater standardization or uniformity.

* * * Consumer Information on

Health Care Price and Quality * * *

Sec. 3.  18 V.S.A. § 9410(a) and (c) are amended to read:

(a)(1)  The commissioner shall establish and maintain a unified health care data base to enable the commissioner to carry out the duties under this chapter and Title 8, including:

(1)(A)  Determining the capacity and distribution of existing resources.

(2)(B)  Identifying health care needs and informing health care policy.

(3)(C)  Evaluating the effectiveness of intervention programs on improving patient outcomes.

(4)(D)  Comparing costs between various treatment settings and approaches.

(5)(E)  Providing information to consumers and purchasers of health care.

(2)(A)  The program authorized by this section shall include a consumer health care price and quality information system designed to make available to consumers transparent health care price information, quality information, and such other information as the commissioner determines is necessary to empower individuals to make economically sound and medically appropriate decisions.

(B)  The commissioner shall convene a working group composed of the commissioner of health, the director of the office of Vermont health access, health care consumers, employers and other payers, health care providers and facilities, the Vermont program for quality in health care, health insurers, and any other individual or group appointed by the commissioner to advise the commissioner on the development and implementation of the consumer health care price and quality information system.

(C)  The commissioner may require a health insurer covering at least 15,000 lives in this state to file with the commissioner a consumer health care price and quality information plan, in accordance with rules adopted by the commissioner.  Approved plans may include the internet publication of the prices or charges established by health care facilities and health care providers, and other providers of health care services and products, and the reimbursable amounts negotiated with health insurers and payable by the individual in connection with the individual’s deductible or other cost sharing obligations.

(D)  The commissioner shall adopt such rules as are necessary to carry out the purposes of this subdivision.  The commissioner’s rules may permit the gradual implementation of the consumer health care price and quality information system over time, beginning with the ten most common inpatient and outpatient procedures, products or services.  The commissioner’s rules shall permit health insurers to use security measures designed to allow subscribers access to price and other information without disclosing trade secrets to individuals and entities who are not subscribers.

(c)  Health insurers, health care providers, health care facilities, and other providers of health care services or products, including but not limited to providers of pharmaceutical products and medical equipment, and governmental agencies shall file reports, data, schedules, statistics, or other information determined by the commissioner to be necessary to carry out the purposes of this section.  Such information may include:

(1)  health insurance claims and enrollment information used by health insurers;

(2)  information relating to hospitals filed under subchapter 7 of this chapter (hospital budget reviews); and

(3)  any other information relating to health care costs, prices, quality, utilization, or resources required to be filed by the commissioner.

* * * Multi-payer Data Collection Project * * *

Sec. 4.  18 V.S.A. § 9410(i) is added to read:

(i)(1)  As used in this section, and without limiting the meaning of subdivision 9402(9) of this title, the term “health insurer” includes:

(A)  any entity defined in subdivision 9402(9) of this title;

(B)  any third party administrator, any pharmacy benefit manager, any entity conducting administrative services for business, and any other similar entity with claims data, eligibility data, provider files, and other information relating to health care provided to Vermont residents, and health care provided by Vermont health care providers and facilities required to be filed by a health insurer under this section;

(C)  any health benefit plan offered or administered by or on behalf of the state of Vermont or an agency or instrumentality of the state; and

(D)  any health benefit plan offered or administered by or on behalf of the federal government with the agreement of the federal government.

(2)  The commissioner may adopt rules to carry out the provisions of this subsection, including standards and procedures requiring the registration of persons or entities not otherwise licensed or registered by the commissioner, and criteria for the required filing of such claims data, eligibility data, provider files, and other information as the commissioner determines to be necessary to carry out the purposes of this section and this chapter.


* * * The Medicaid Enrollment and Cost Shift Initiatives * * *

Sec. 5.  THE MEDICAID ENROLLMENT INITIATIVE

(a)  The governor and the general assembly find that:

(1)  Vermont is a leader in providing health insurance coverage for low and moderate income Vermonters.  Household income eligibility criteria are among the highest in the nation, providing health insurance for many working Vermonters.

(2)  As a result, Vermont’s average uninsured rate is the second lowest in the nation, and 96 percent of children are covered by public or private health insurance.

(3)  Despite Vermont’s efforts, about 45 percent of the uninsured in Vermont could be eligible for coverage under a Medicaid program based on an estimate of uninsured Vermonter’s household income, but are either unwilling or unable to enroll in a public health insurance program.

(b)  The office of Vermont health access shall identify the reasons why 28,000 Vermonters with household income below Medicaid and SCHIP household income levels are not enrolled in a public health insurance program and shall develop and implement a strategy designed to encourage eligible individuals and families to enroll.  The office shall report annually to the governor and the general assembly on or before January 15 with an assessment of outreach and enrollment efforts, together with any administrative or legislative recommendations for improving participation and retention of eligible individuals and families.

Sec. 6.  THE MEDICAID COST SHIFT INITIATIVE

(a)  The governor and the general assembly find that the gap between hospital, doctor, and other provider reimbursements for Medicaid claims when compared with commercial health insurance claims is too great.  If the current reimbursement gap continues, Vermonters enrolled in public health insurance programs may face reduced access to the health care system because fewer health care providers may participate, and Vermonters enrolled in commercial health insurance plans already face higher premiums than would otherwise be the case because the difference between Medicaid reimbursements and commercial health insurance reimbursements is shifted to commercial health insurance plans.

(b)  The governor and the general assembly are committed to a significant appropriation in fiscal year 2007 to increase health care provider reimbursements for Medicaid, the SCHIP program, and other public insurance programs administered by the office of Vermont health access, in accordance with a methodology approved by the director.

(c)  In fiscal years subsequent to fiscal year 2007, any health care provider and hospital reimbursement increases appropriated by the general assembly for Medicaid, SCHIP, or other public health insurance programs shall be contingent upon adherence to standards adopted by the office of Vermont health access relating to quality, performance, and chronic care payment reform strategies.

Sec. 7.  8 V.S.A. § 4062d is added to read:

§ 4062d.  COST SHIFT REVIEW OF HEALTH INSURANCE PREMIUMS

In connection with insurers’ rate filings made pursuant to sections 4062, 4062b, 4515a, 4587, 5104, and any other applicable provisions of law, the commissioner shall ensure that health insurers appropriately account for reductions in hospital and provider charges attributable to any increase in Medicaid or other public insurance program reimbursements for health care providers or facilities.

* * * Healthy Choices Insurance Discount * * *

Sec. 8.  8 V.S.A. § 4080a(h)(2) is amended to read:

(2)(A)  The commissioner shall, by rule, adopt standards and a process for permitting registered small group carriers to use one or more risk classifications in their community rating method, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 20 percent (20%), and provided further that the commissioner’s rules may not permit any medical underwriting and screening.

(B)  The commissioner’s rules may permit a carrier, including a hospital or medical service corporation, to establish rewards, premium discounts, and rebates, or otherwise waive or modify applicable co-payments, deductibles or other cost-sharing amounts, in return for adherence by a member or subscriber to programs of health promotion and disease prevention.  The commissioner shall consult with the commissioner of health and the director of the office of Vermont health access in the development of health promotion and disease prevention rules.  Such rules shall:

(i)  be designed to promote good health or prevent disease for individuals in the program and not be used as a subterfuge for imposing higher costs on an individual based on a health factor;

(ii)  provide that the reward under the program is available to all similarly situated individuals; and

(iii)  provide a reasonable alternative standard to obtain the reward to any individual for whom it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard for the discount, and disclose in all plan materials that describe the discount program the availability of a reasonable alternative standard.

(C)  The commissioner’s rules shall include:

(i)  standards and procedures for health promotion and disease prevention programs based on the best scientific, evidence-based, medical practices, as recommended by the commissioner of health;

(ii)  standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention; and

(iii)  any other standards and procedures necessary or desirable to carry out the purposes of this subdivision.

Sec. 9.  8 V.S.A. § 4080b(h)(2) is amended to read:

(2)(A)  The commissioner shall, by rule, adopt standards and a process for permitting registered nongroup carriers to use one or more risk classifications in their community rating method.  After July 1, 1993, provided that the premium charged shall not deviate above or below the community rate filed by the carrier by more than 40 percent (40%) for two years, and thereafter 20 percent (20%).  Such rules may not permit, and provided further that the commissioner’s rules may not permit any medical underwriting and screening and shall give due consideration to the need for affordability and accessibility of health insurance.

(B)  The commissioner’s rules may permit a carrier, including a hospital or medical service corporation, to establish rewards, premium discounts, and rebates, or otherwise waive or modify applicable co-payments, deductibles or other cost-sharing amounts, in return for adherence by a member or subscriber to programs of health promotion and disease prevention.  The commissioner shall consult with the commissioner of health, and the director of the office of Vermont health access in the development of health promotion and disease prevention rules.  Such rules shall:

(i)  be designed to promote good health or prevent disease for individuals in the program and not be used as a subterfuge for imposing higher costs on an individual based on a health factor;

(ii)  provide that the reward under the program is available to all similarly situated individuals; and

(iii)  provide a reasonable alternative standard to obtain the reward to any individual for whom it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard for the discount, and disclose in all plan materials that describe the discount program the availability of a reasonable alternative standard.

(C)  The commissioner’s rules shall include:

(i)  standards and procedures for health promotion and disease prevention programs based on the best scientific, evidence-based, medical practices, as recommended by the commissioner of health;

(ii)  standards and procedures for evaluating an individual’s adherence to programs of health promotion and disease prevention; and

(iii)  any other standards and procedures necessary or desirable to carry out the purposes of this subdivision.

Sec. 10.  8 V.S.A. § 4516 is amended to read:

§ 4516.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before the fifteenth day of March, a hospital service corporation shall file with the commissioner of banking, insurance, securities, and health care administration a statement sworn to by the president and treasurer of the corporation showing its condition on the thirty-first day of December.  The statement shall be in such form and contain such matters as the commissioner shall prescribe.  To qualify for the tax exemption set forth in section 4518 of this title, the statement shall include a certification that the hospital service corporation operates on a nonprofit basis for the purpose of providing an adequate hospital service plan to individuals of the state, both groups and nongroups, without discrimination based on age, gender, geographic area, industry, and medical history, except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

Sec. 11.  8 V.S.A. § 4588 is amended to read:

§ 4588.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before March 15, a medical service corporation shall file with the commissioner of banking, insurance, securities, and health care administration a statement sworn to by the president and treasurer of the corporation showing its condition on December 31, which shall be in such form and contain such matters as the commissioner shall prescribe.  To qualify for the tax exemption set forth in section 4590 of this title, the statement shall include a certification that the medical service corporation operates on a nonprofit basis for the purpose of providing an adequate medical service plan to individuals of the state, both groups and nongroups, without discrimination based on age, gender, geographic area, industry, and medical history, except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.


Sec. 12.  8 V.S.A. § 5115 is amended to read:

§ 5115.  DUTY OF NONPROFIT HEALTH MAINTENANCE

              ORGANIZATIONS 

Any nonprofit health maintenance organization subject to this chapter shall offer nongroup plans to individuals in accordance with section 4080b of this title without discrimination based on age, gender, industry, and medical history, except as allowed by subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

* * * Public Health Initiatives * * *

Sec. 13.  18 V.S.A. § 104(j) is added to read:

(j)  The commissioner shall develop and implement public health programs designed to promote healthy behavior and disease prevention across the lifespan of individual Vermonters and to coordinate such activities with the Vermont blueprint for health - the chronic care initiative, and with Vermont’s other health care system reform initiatives identified in subsection 9421(d) of this title.  Such programs may include, but are not limited to:

(1)  The fit and healthy kids program.

(2)  The obesity prevention program.

(3)  The maternal/child health and immunization program.

(4)  Mental health and substance abuse programs.

(5)  Tobacco prevention and cessation programs.


Sec. 14.  33 V.S.A. § 504(c) is amended to read:

(c)  In addition to the powers vested in it by law, the department may:

(1)  Cooperate with appropriate federal agencies which fund programs which the department administers.

(2)  Notwithstanding the provisions of chapter 13 of Title 3, enter into an agreement with the University of Vermont and State Agricultural College to continue the rural and farm family rehabilitation program.

(3)  Develop and implement public health programs designed to promote healthy behavior and disease prevention across the lifespan of individual Vermonters and to coordinate such activities with the Vermont blueprint for health - the chronic care initiative, and with Vermont’s other health care system reform initiatives identified in subsection 9421(d) of Title 18.  Such programs may include, but are not limited to:

(1)  The healthy aging program.

(2)  The elder care clinicians program.

* * * Safe Apology * * *

Sec. 15.  12 V.S.A. § 1911 is added to read:

§ 1911.  EXPRESSION OF REGRET OR APOLOGY BY HEALTH CARE                                         PROVIDER INADMISSIBLE

(a)  An expression of regret or apology made by or on behalf of a health care provider, including an expression of regret or apology that is made in writing, orally, or by conduct, does not constitute an admission of liability for any purpose and shall be inadmissible in any civil or administrative proceeding against the health care provider, including any arbitration or mediation proceeding.

(b)  A health care provider or any other person who makes an expression of regret or apology on behalf of the health care provider, including an expression of regret or apology that is made in writing, orally or by conduct, may not be examined by deposition or otherwise with respect to the expression of regret or apology in any civil or administrative proceeding against the health care provider, including any arbitration or mediation proceeding.

(c)  As used in this section, “health care provider” is defined by subdivision 9402(8) of Title 18.

* * * Adverse Event Reporting * * *

Sec. 16.  18 V.S.A. § 9405b(a)(2) is amended to read:

(a)  The commissioner, in consultation with representatives from the public oversight commission, hospitals, and other groups of health care professionals shall adopt rules establishing a standard format for community reports, as well as the contents, which shall include:

* * *

(2)  measures of patient safety that are valid, reliable, and useful, including comparisons to appropriate industry benchmarks for safety, including adverse event reporting.


Sec. 17.  18 V.S.A. § 1905(19) is added to read:

(19)  All hospitals shall comply with the rules adopted by the commissioner of health pursuant to section 1912 of this title.  License applications shall document compliance with the rules without providing protected health information.

Sec. 18.  18 V.S.A. § 1912 is added to read:

§ 1912.  ESTABLISHMENT AND STUDY OF AN ADVERSE EVENT

              REPORTING SYSTEM

(a)  The commissioner of health shall establish by rule an adverse health event reporting system for the purpose of improving patient safety and striving to eliminate adverse events in Vermont hospitals, improving health care outcomes, and supporting and facilitating quality improvement efforts by hospitals.  The reporting system shall, at a minimum, require hospitals to:

(1)  report adverse health care events, as defined by the commissioner, to their own peer review committees;

(2)  complete analyses of adverse events and develop and implement corrective action plans that meet standards determined by the commissioner;

(3)  report promptly to the commissioner all adverse events that the hospital reasonably believes to be related to:

(A)  the performance of purposefully or recklessly unsafe or unacceptable patient care;

(B)  neglect or abuse of a patient;

(C)  any violation of law; and

(D)  continuing clinical practice by a clinician who exhibits conduct that provides the hospital with reasonable cause to believe that the clinician’s ability to practice competently or safely is impaired.

(b)  For the purpose of evaluating a hospital’s compliance with the provisions of this section, the commissioner and designees are authorized to examine and review information protected by the provisions of the patient’s privilege under subsection 1612(a) of Title 12 or otherwise required by law to be held confidential, except that the commissioner’s access to and use of minutes and records of a peer review committee established under Title 26 shall be governed by subdivision (c) of this section.

(c)  Notwithstanding the provisions of section 1443 of Title 26, the commissioner or the commissioner’s designee shall have reasonable access to the minutes and records of any peer review or comparable committee for informational purposes only.

(d)  The commissioner may share the information reported pursuant to subdivision (a)(3) of this section with state and federal licensing and other regulatory entities and, in the case of possible criminal activity, to state and federal law enforcement authorities.  All other information disclosed or otherwise made available to the department and its designees under this section shall be confidential and privileged and shall not be subject to subpoena or available for public disclosure, except that the commissioner and the board of health are authorized to use such information, other than peer review protected information, during the course of any legal or regulatory action against a hospital.

(e)  The commissioner of health shall conduct a study of best practices and principles for adverse event reporting systems, by July 1, 2007, and shall make recommendations for a statewide Vermont adverse event reporting system consistent with the study findings.  The recommendations shall consider the implications of the federal Patient Safety and Quality Improvement Act of 2005 and shall include:

(1)  recommendations and cost estimates for a statewide adverse event reporting system capable of aggregating and analyzing such data for the purpose of developing and implementing strategies to target and eliminate specific adverse events;

(2)  recommendations and cost estimates for a statewide adverse event reporting system capable of aggregating and analyzing such data for the purpose of public reporting.

(f)  The commissioner may retain additional professional or other staff needed to carry out responsibilities under this section.  Expenses incurred by the department and for any other related contracts authorized by the commissioner beyond those funded by hospital licensing fees for activities necessary to implement this section shall be billed to hospitals in proportion to each hospital’s share of the total of hospital licensing fees as required by this title.

(g)  If the commissioner determines that a hospital has violated or failed to comply with any of the provisions of this section, the commissioner may sanction the violation or failure to comply as provided in this title.  In evaluating compliance, the commissioner shall place primary emphasis on assuring good faith compliance and effective corrective action by the facility, reserving punitive enforcement or disciplinary action for those cases in which the facility has displayed recklessness, gross negligence, or willful misconduct, or in which there is evidence, based on other similar cases known to the department of health, the agency of human services, or the office of the attorney general, of a pattern of significant substandard performance that has the potential for or has actually resulted in harm to patients.

(h)  After notice and an opportunity for hearing, the commissioner may impose on a person who knowingly violates a provision of this subchapter, or a rule or order adopted pursuant to this subchapter, a civil administrative penalty of no more than $10,000.00, or in the case of a continuing violation, a civil administrative penalty of no more than $100,000.00 or one-tenth of one percent of the gross annual revenues of the health care facility, whichever is greater.  A person aggrieved by a decision of the commissioner under this subsection may appeal the commissioner’s decision to the supreme court.

(i)  The authority granted to the commissioner under this section is in addition to any other authority granted to the commissioner under law.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us