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H.713

Introduced by Representative Baker of West Rutland

Referred to Committee on

Date:

Subject:  Health care; health insurance assistance and referral; Medicaid enrollment; Medicaid cost shift; premium assistance program; basic health insurance policy; health care system reform; common claims administration; consumer price and quality information; multi-payer data collection; healthy choices insurance discount; public health; adverse event reporting; safe apology; statute of limitations; medical malpractice damage awards; arbitration of medical malpractice claims 

Statement of purpose:  This bill proposes to:  (1) establish a health insurance assistance and referral service; (2) engage in a Medicaid outreach and enrollment initiative; (3) establish a process for reducing the Medicaid cost shift; (4) establish a premium assistance program; (5) offer a basic health insurance policy to uninsured Vermonters; (6) assign accountability for the coordination of Vermont’s health care system reform initiatives to the secretary of administration; (7) require greater standardization in claims administration; (8) establish a consumer price and quality information system; (9) enhance the multi-payer data collection project; (10) authorize healthy choices insurance discounts; (11) authorize public health initiatives in the department of health and the department of disabilities, aging, and independent living; (12) authorize the department of health to establish an adverse event reporting system; (13) provide that an expression of apology by a health care provider does not constitute an admission of liability; (14) amend the statute of limitations for minors litigating a medical malpractice claim; (15) limit awards of noneconomic damages in medical malpractice actions; (16) permit the reduction of damages in a medical malpractice action where there is a collateral source of recovery; and (17) make effective the statute enacted in 1992 establishing a system of mandatory arbitration of medical malpractice claims.

AN ACT RELATING TO HEALTH CARE REFORM

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

* * * Findings and Purpose * * *

Sec. 1.  FINDINGS AND PRINCIPLES FOR HEALTH CARE REFORM

(a)  Findings.

(1)  Vermont faces twin challenges to our health care system: unsustainable health care inflation and a growing number of uninsured Vermonters.  These challenges are interrelated:  health care inflation creates difficult choices for public and private health insurance plans; as employers drop or reduce coverage, more Vermonters become uninsured; and an increase in the number of uninsured Vermonters will tend to increase the cost of uncompensated care paid for by those who are insured.

(2)  Health care spending in Vermont and the nation is increasing at an unsustainable rate.  While Vermont health care costs are still lower than national per capita costs, the gap between Vermont and the nation has been narrowing.

(3)  Chronic conditions account for more than three-quarters of the $3.3 billion Vermont spends on health care each year.  The health care needs of Vermonters with chronic conditions will be the primary driver of demand for health care and resulting costs for the foreseeable future.

(4)  Vermont’s health care system offers high quality care and accessible coverage to Vermonters, but health care system improvements can be made in many areas, including developing a comprehensive chronic care treatment system, building a modern health information technology system, reducing administrative costs and complexities, using a comprehensive health care claims database to improve the quality and cost‑effectiveness of care, providing consumers paying increased out‑of‑pocket expenses with good price and quality information, and establishing an adverse event reporting system.

(5)  Public health initiatives are an essential component of a comprehensive health care reform plan, with promotion of healthy behavior and disease prevention across the lifespan of the individual.

(6)  Reforms to the tort system for adjudicating medical malpractice claims will create a better environment for Vermont practitioners to focus on providing quality and affordable health care to Vermonters.

(7)  Vermont has been a leader in offering health insurance for low and moderate income Vermonters through the Medicaid program, but the Medicaid program can no longer be used as the primary mechanism to lower costs and expand access to health insurance because, even with the Global Commitment waiver, significant cost containment activities must be engaged in to avoid a substantial deficit in the Medicaid program in future years and because the low level of Medicaid reimbursements results in a Medicaid cost shift that is paid for by Vermonters covered by employer‑sponsored insurance.

(7)  The health care reform plan established by this act offers universal access to health insurance for all Vermonters by distinguishing between the different groups of uninsured Vermonters and by creating targeted strategies for insuring each group according to its needs and circumstances.

(A)  The largest group of uninsured Vermonters (about 45 percent) is potentially eligible for Medicaid, based on household income, but has not enrolled in the Medicaid program.  For this group of uninsured Vermonters, health insurance coverage could be offered under the existing Medicaid program.

(B)  About 34 percent of uninsured Vermonters have household income between 150 percent and 300 percent of the federal poverty level.  These Vermonters are ineligible for a Medicaid program and, because of their income, might have difficulty affording commercial health insurance coverage.

(C)  A third group of uninsured Vermonters (about 21 percent) has household income over 300 percent of the federal poverty level.  These individuals and households most likely could afford to purchase health insurance, especially if a basic, affordable health insurance policy were offered.

(b)  The goals and principles of health care reform for Vermont should be:

(1)  Universal access to affordable health insurance for all Vermonters.

(2)  Improved quality and affordability through health care system reform.

(3)  The promotion of healthy behavior and disease prevention across the lifespan of individual Vermonters.

(4)  Reduced demand for health care expenditures through improved health outcomes.

(5)  Personal responsibility and consumer choice, with the patient at the center of decision‑making.

(6)  A competitive private health insurance market and cost-effective public programs.

(7)  Compatibility with and support for economic growth and prosperity.

* * * Universal Access to Health Insurance * * *

Sec. 2.  18 V.S.A. § 9413 is added to read:

§ 9413.  HEALTH INSURANCE ASSISTANCE AND REFERRAL

              SERVICE

The commissioner shall contract for the establishment of a health insurance assistance and referral service.  The service shall offer a toll-free telephone number and an internet website for individuals and businesses in Vermont to call or visit to obtain information on affordable health insurance options.  The service shall offer advice, assistance, and referral concerning both public and private health insurance options, including Medicaid, Medicare, the premium assistance program, the basic health insurance policy, nongroup private health insurance, small group and association health insurance, and other public and private health insurance options.

Sec. 3.  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 Vermonters’ 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 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 strategies, together with any administrative or legislative recommendations for improving participation and retention of eligible individuals and families.

Sec. 4.  THE MEDICAID COST SHIFT INITIATIVE

(a)  The governor and the general assembly find that the gap among 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 will 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. 5.  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.

Sec. 6.  33 V.S.A. chapter 19, subchapter 9 is added to read:

Subchapter 9.  Premium Assistance Program

§ 2091.  PREMIUM ASSISTANCE PROGRAM

(a)  As used in this subchapter:

(1)  “Approved employer‑sponsored insurance plan” means a health insurance plan offered to an eligible individual or to his or her dependent, which when combined with the assistance offered under the program established by this subchapter satisfies the criteria adopted by the office for a comprehensive, affordable health insurance plan.  The office shall consult with the department of banking, insurance, securities, and health care administration in developing criteria under this subdivision.  When necessary, an approved employer‑sponsored health insurance plan shall conform to the standards established for secretary‑approved coverage under the Global Commitment waiver.

(2)  “Eligible individual” means an individual who:

(A)(i)  Is enrolled in VHAP on January 1, 2007, and the individual or his or her dependents have been offered enrollment in an approved employer‑sponsored insurance plan;

(ii)  Applies for enrollment in VHAP on and after January 1, 2007, and the individual or his or her dependents have been offered enrollment in an approved employer‑sponsored insurance plan; or

(iii)  Applies for enrollment in the premium assistance program on and after January 1, 2007, has household income greater than 150 percent of the federal poverty level, and has household income equal to or less than 300 percent of the federal poverty level; and

(B)  Has been a resident of this state for at least 12 months immediately preceding the individual’s application for assistance;

(C)  Is not eligible for any other state or federal public health insurance program; and

(D)  Has not been insured under a private market health insurance plan that provides major medical coverage during the 12 months prior to the application, and the individual or a member of the individual’s household has not been offered coverage under a group health insurance plan that provides major medical coverage for which the plan sponsor contributes at least 50 percent of the cost of the applicable plan.  The office may adopt rules permitting the waiver of the provisions of this subdivision because of circumstances beyond the control of the individual, including but not limited to the loss of employer‑sponsored coverage, the loss of coverage by an institution of higher education, and the very low income of the individual.  The provisions of this subdivision shall not apply to eligible individuals under subdivision (2)(A)(i) of this subsection.

(3)  “Global Commitment waiver” means the Medicaid Global Commitment to Health Demonstration waiver entered into between the agency of human services and the federal Centers for Medicare and Medicaid Services.

(4)  “Office” and “OVHA” mean the office of Vermont health access.

(5)  “VHAP” means the program that extends publicly sponsored coverage to low income, uninsured adults, previously under the Vermont health access plan, subsequently replaced by the Global Commitment waiver.  VHAP includes coverage for adults with household income up to 150 percent of the federal poverty level as well as parent-caretaker coverage for individuals with household income between 150 percent and 185 percent of the federal poverty level.  

(b)  The office shall request federal approval for the premium assistance program authorized by this subchapter and shall adopt such rules as are necessary to carry out the purposes of this subchapter.

(c)  For eligible individuals under subdivision (a)(2)(A)(i) of this section, the premium assistance program shall offer financial assistance to enable eligible individuals to participate in an approved employer‑sponsored insurance plan.  The rules of the premium assistance program with respect to eligible individuals under subdivision (a)(2)(A)(i) of this section shall include the following:

(1)  A subsidy of premiums or cost‑sharing amounts based on the household income of the eligible individual, with greater amounts of financial assistance provided to eligible individuals with lower household income and lesser amounts of assistance provided to eligible individuals with higher household income.

(2)  A requirement that eligible individuals under subdivision (a)(2)(A)(i) of this section enroll in an approved employer‑sponsored insurance plan as a condition of continued public assistance under this subchapter or of any other benefit program offered or administered by OVHA.

(3)  Standards to ensure that eligible individuals under subdivision (a)(2)(A)(i) of this section on an annual basis are obligated to make out‑of‑pocket expenditures for premiums and cost‑sharing amounts which are substantially equivalent to or less than their premium and cost‑sharing obligations under VHAP.

(4)  Standards to ensure that eligible individuals under subdivision (a)(2)(A)(i) of this section have health insurance coverage of services which meet a minimum level of coverage as specified by the office.  The office may offer supplemental benefit coverage to such individuals.

(d)  For eligible individuals under subdivision (a)(2)(A)(ii) of this section, the premium assistance program shall offer financial assistance to enable eligible individuals to participate in an approved employer‑sponsored insurance plan offered to the individual.  The rules of the premium assistance program with respect to eligible individuals under subdivision (a)(2)(A)(ii) of this section shall include the following:

(1)  A subsidy of premiums or cost‑sharing amounts based on the household income of the eligible individual, with greater amounts of financial assistance provided to eligible individuals with lower household income and lesser amounts of assistance provided to individuals with higher household income.

(2)  A requirement that eligible individuals under subdivision (a)(2)(A)(ii) of this section enroll in an approved employer‑sponsored insurance plan as a condition of continued public assistance under this subchapter or of any other benefit program offered or administered by OVHA.

(3)  The office may offer supplemental benefit coverage to such individuals.

(e)  For eligible individuals under subdivision (a)(2)(A)(iii) of this section, the premium assistance program shall offer financial assistance to enable eligible individuals to enroll in a health insurance plan.  The rules of the premium assistance program with respect to eligible individuals under subdivision (a)(2)(A)(iii) of this section shall include the following:

(1)  A subsidy of premiums or cost‑sharing amounts based on the household income of the eligible individual, with greater amounts of financial assistance provided to eligible individuals with lower household income and lesser amounts of assistance provided to eligible individuals with higher household income.

(2)  An option for the eligible individual either to participate in employer‑sponsored insurance offered to the eligible individual or his or her dependents, or to purchase a basic health insurance policy under section 4080f of Title 18. 

(f)  In the event that the office determines that appropriations for the premium assistance program for eligible individuals under subdivision (a)(2)(A)(iii) of this section are insufficient to meet the projected costs of enrolling new program participants, the office may suspend or terminate new enrollment for such eligible participants in the program or restrict enrollment to lower income eligible individuals.

(g)  With the approval of the joint fiscal committee and upon a demonstration by the office that expansion of the premium assistance program will result in financial savings to the Medicaid program without adversely affecting access to affordable health insurance and to quality health care for the affected individuals, the office may require additional categories of individuals who would otherwise be eligible for enrollment in Medicaid, the State Children’s Health Insurance Program (“SCHIP”), or VHAP but who have access to an approved employer‑sponsored insurance plan to participate in the premium assistance program as a condition of public financial assistance.

Sec. 7.  8 V.S.A. § 4080f is added to read:

§ 4080f.  BASIC HEALTH INSURANCE POLICY

(a)  As used in this section:

(1)  “Basic health insurance policy” means a health insurance policy, a nonprofit hospital or medical service corporation service contract, or a health maintenance organization health benefit plan approved by the commissioner offered or issued to an individual or to an employer who has not offered health insurance during the three years prior to application, and offering single, two‑person, and family coverage.

(2)  “Health insurer” means a health insurance company, a hospital or medical services corporation, or a health maintenance organization.

(3)  “Individual” means a person who:

(A)  Has been a resident of this state for at least 12 months immediately preceding the individual’s application to purchase a basic health insurance policy; and

(B)  Has not been insured under a public or private health insurance plan that provides major medical coverage during the 12 months prior to the individual’s application for purchase of a basic health insurance policy, and the individual or a member of the individual’s household is not eligible for coverage under a group health insurance plan that provides major medical coverage for the individual and for the individual’s dependents if applicable for which the plan sponsor contributes at least 50 percent of the cost of the applicable plan.  The commissioner may adopt rules permitting the waiver of the provisions of this subdivision because of circumstances beyond the control of the individual, including but not limited to the loss of employer‑sponsored coverage, the loss of coverage by an institution of higher education, and the very low income of the individual.

(C)  Has been insured under a basic health insurance policy issued under this section for no more than ten years.

(b)  The commissioner shall encourage health insurance companies, hospital and medical service corporations, and health maintenance organizations doing business in this state to offer basic health insurance policies to individuals.  If necessary to ensure the availability of basic health insurance policies, the commissioner may require a health insurer covering at least five percent of the lives insured in the private health insurance market in this state to offer basic health insurance policies to individuals.  The commissioner may permit one or more health insurers to enter into a joint operating agreement to consolidate the offering of basic health insurance policies to uninsured Vermonters.  In connection with a rate decision, the commissioner may make reasonable supplemental orders to a health insurer and may attach reasonable conditions and limitations to such orders as he or she finds, on the basis of competent and substantial evidence, necessary to carry out the purposes of this section. 

(c)  A basic health insurance policy shall be a policy approved by the commissioner that is consistent with the following standards:

(1)  The policy covers major medical services in accordance with the requirements of this chapter and with the requirements of chapter 221 of Title 18.

(2)  The policy covers eligible preventive care which meets the requirements of Section 223 of the Internal Revenue Code (health savings accounts), as amended, notwithstanding any deductible amount, including  services determined by the commissioner to be necessary for the treatment of chronic conditions, based on the recommendations of the commissioner of health.

(3)  The policy has annual deductible amounts no less than the deductible amounts required under a high deductible health insurance plan which meets the requirements of Section 223 of the Internal Revenue Code (health savings accounts), as amended, and no greater than an amount approved by the commissioner from time to time for the purpose of ensuring that the basic health insurance policy will offer affordable health insurance and quality health care for Vermonters.

(d)  A health insurer shall guarantee acceptance of any individual for any basic health insurance policy offered by the health insurer.  A health insurer shall also guarantee acceptance of each dependent of such individual for any basic health insurance policy it offers.

(e)  A health insurer shall comply with the preexisting condition requirements of subsection 4080b(g) of this title.

(f)(1)  Subject to approval by the commissioner, a health insurer shall use a community rating methodology that includes one or more risk classifications and such other rating and underwriting criteria as are necessary to mitigate against adverse selection into the basic health insurance policy market.

(2)  The premium charged for a basic health insurance policy shall not deviate above or below the community rate filed by the health insurer by more than 20 percent, or by more than 40 percent if the commissioner determines that the greater deviation is necessary to mitigate against adverse selection into the basic health insurance policy market.

(3)  Such rating and underwriting criteria shall not permit any medical underwriting and screening, except that the health insurer may offer rewards, premium discounts, rebates, or otherwise waive or modify applicable co‑payments, deductibles, or other cost-sharing amounts in return for adherence by the individual to programs of health promotion and disease prevention, in accordance with rules adopted by the commissioner under subdivisions 4080a(h)(2)(B) and 4080b(h)(2)(B) of this title.

* * * Health Care System Reform Initiatives * * *

Sec. 8.  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 of a common sense strategy of health care system reform among executive branch agencies, departments, and offices 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:

(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:

(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.

Sec. 9.  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 for 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 greater standardization or uniformity in connection with:

(1)  Claims forms, patient invoices, and explanations 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.

Sec. 10.  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 (2).  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 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.

Sec. 11.  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.

* * * Public Health Initiatives * * *

Sec. 12.  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:

(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. 13.  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:

(A)  The healthy aging program.

(B)  The elder care clinicians program.

Sec. 14.  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, 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. 15.  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, 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. 16.  8 V.S.A. § 4516 is amended to read:

§ 4516.  ANNUAL REPORT TO COMMISSIONER

Annually, on or before March 15, 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 December 31.  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. 17.  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. 18.  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.

* * * Adverse Event Reporting * * *

Sec. 19.  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. 20.  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. 21.  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 event reporting system for the purpose of improving patient safety and eliminating 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, with 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 and shall make recommendations for a statewide Vermont adverse event reporting system consistent with the study findings by July 1, 2007.  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 such additional professional or other staff as needed to carry out responsibilities under this section.  Expenses incurred by the department for these 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.

* * * Tort Reform * * *

Sec. 22.  12 V.S.A. § 1911 is added to read:

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

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

(b)  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.

(c)  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.

Sec. 23.  12 V.S.A. § 551 is amended to read:

§ 551.  MINORITY, INSANITY, OR IMPRISONMENT

(a)  When a person entitled to bring an action specified in this chapter is a minor, insane, or imprisoned at the time the cause of action accrues, such person may bring such action within the times in this chapter respectively

limited, after the disability is removed, except as provided in subsection (c) of this section.

* * *

(c)  Notwithstanding the provisions of subsection (a) of this section, a claim by a minor to recover damages for injuries to the minor arising out of any medical or surgical treatment or operation shall be brought within the time limitations required by section 521 of this title, except that a minor under six years of age shall have until his or her ninth birthday for the limitations period to commence.

Sec. 24.  12 V.S.A. § 1910 is added to read:

§ 1910.  MEDICAL MALPRACTICE; LIMITATION ON DAMAGES FOR

               PAIN AND SUFFERING

In an action based on medical malpractice, the damages awarded for pain and suffering or other noneconomic loss shall not exceed the amount of $250,000.00.  On January 1, 2008, the department of banking, insurance, securities, and health care administration shall increase the $250,000.00 limit on damages established under this section by a percentage based on the Consumer Price Index, CPI-U, U.S. city average, not seasonally adjusted, or successor index, as calculated by the U.S. Department of Labor or successor agency for the 12 months preceding August 2007.  Thereafter, beginning on January 1, 2010, and every other January 1 thereafter, the department of banking, insurance, securities, and health care administration shall increase the $250,000.00 limit on damages established under this section by a percentage based on the same Consumer Price Index, computed for the 12 months preceding the previous August, compounded annually.  The limit on damages shall be rounded off to the nearest $1.00.

Sec. 25.  12 V.S.A. § 1911 is added to read:

§ 1911.  MEDICAL MALPRACTICE ACTIONS; DAMAGES; RECOVERY

               BY PLAINTIFF FROM OTHER PERSONS; REMITTITUR

(a)  If damages have been awarded in an action based on medical malpractice, a party may file a motion for remittitur on the grounds that the plaintiff has been or will be paid, reimbursed, or indemnified for at least part of his or her special damages under a contract, insurance agreement, or statute.  The court shall provide all other parties to the action an opportunity to reply to the motion and shall set it for hearing.

(b)  If the court finds after the hearing that the plaintiff has been or will be paid, reimbursed, or indemnified for at least part of his or her special damages under a contract, insurance agreement, or statute, the court shall grant the motion for remittitur and order the damages award reduced by the amount the plaintiff has been or will be paid, reimbursed, or indemnified.

(c)(1)  No damages award shall be reduced under this section on the basis of other amounts paid or payable to the plaintiff if a reduction on such grounds would be prohibited by state or federal law.

(2)  No damages award assessed in whole or in part for future expenses, costs, or losses shall be reduced under this section unless:

(A)  the court orders the defendant or the defendant’s insurer to provide adequate security; or

(B)  the defendant’s insurer is authorized to do business in this state and maintains reserves in compliance with rules of the department of banking, insurance, securities, and health care administration sufficient to assure payment of the amount by which the plaintiff’s future damages are reduced.

(d)  Except as expressly provided by federal law, no person may recover from the plaintiff or assert a claim of subrogation against a defendant for any sum included in an order for remittitur of damages issued under this section.

(e)  Nothing in this section shall be construed to limit motions for remittitur on any other grounds.

Sec. 26.  MANDATORY ARBITRATION

(a)  Sec. 50 of No. 160 of the Acts of the 1991 Adj. Sess. (1992) is amended to read:

Sec. 50.  EFFECTIVE DATE

Secs. 46, 47, 48 and 49, amending chapter 215 of Title 12 to provide for mandatory arbitration in medical malpractice cases and admission of practice guidelines, shall take effect on the effective date of a universal health care system enacted by the general assembly.

(b)  This section, which establishes mandatory arbitration of claims based on medical malpractice by repealing Sec. 50 and making effective Secs. 46 ‑ 49 of No. 160 of the Acts of the 1991 Adj. Sess. (1992), shall take effect on September 1, 2006.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us