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BILL AS INTRODUCED 2007-2008

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H.304

Introduced by Representatives McFaun of Barre Town, Obuchowski of Rockingham and Ojibway of Hartford

Referred to Committee on

Date:

Subject:  Health; hospitals; access; coverage; premium relief

Statement of purpose:  This bill would provide access to and coverage for health services provided in hospitals, build on Catamount Health, and offer opportunities for premium relief to all Vermonters.  The bill would establish a global hospital budget for the state and an individual hospital budget for each hospital in the state.  It would establish a Vermont hospital security trust fund from which a negotiated payment would be made to each hospital for health services provided.  

AN ACT RELATING TO THE VERMONT HOSPITAL SECURITY PLAN

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

Sec. 1.  33 V.S.A. chapter 19, subchapter 6 is added to read:

Subchapter 6.  Vermont Hospital Security Plan

§ 2031.  PURPOSE

The purpose of this subchapter is to provide all Vermonters access to and coverage for health services provided in hospitals and provide the opportunity to reduce hospital and related administrative costs.  The general assembly recognizes that the health care system is in crisis, and that all Vermonters do not have the financial ability to pay for increasing health insurance premiums or for the rising costs of health care.  Vermonters need access to hospital care, regardless of ability to pay or insurance coverage.  Additionally, the state must seek financial sustainability of the health care system, including reducing health care spending and transaction costs.  The general assembly recognizes that health care reform, in addition to Catamount Health, is needed to provide coverage of essential health services to Vermonters.

§ 2032.  DEFINITIONS

As used in this subchapter:

(1)  “Agency” means the agency of human services.

(2)  “Commissioner” means the commissioner of the department of banking, insurance, securities, and health care administration. 

(3)  “Division” means the division of health care administration of the department of banking, insurance, securities, and health care administration.

(4)  “Health service” means any medically necessary treatment or procedure to maintain, diagnose, or treat an individual's physical or mental condition, including services ordered by a health care professional and medically necessary services to assist in activities of daily living.

(5)  “Hospital” shall have the same meaning as in section 1902 of Title 18 and may include hospitals located out of state.

(6)  “Secretary” means the secretary of the agency of human services.

(7)  “Vermont resident” means an individual domiciled in Vermont as evidenced by an intent to maintain a principal dwelling place in Vermont indefinitely and to return to Vermont if temporarily absent, coupled with an act or acts consistent with that intent.

§ 2033.  VERMONT HOSPITAL SECURITY PLAN

(a)(1)  The agency of human services or designee shall administer the Vermont hospital security plan to provide Vermont residents with access to and coverage for health services received in a hospital and for payments to hospitals for health services provided.

(2)  Vermonters eligible for Catamount Health or a federally funded health care program shall be eligible for coverage of any benefits provided by the Vermont hospital security plan that are not covered by Catamount Health or the federally funded health care program.  For purposes of this subdivision, “federally funded health care program” means Medicare, Medicaid, the Vermont Health Access Plan, Dr. Dynasaur, VPharm, VermontRx, Catamount Health Premium Assistance, employer‑sponsored insurance premium assistance, another Medicaid‑waiver program, or any other program covering health benefits using federal funding.

(b)  The Vermont hospital security plan shall:

(1)  provide each hospital in the state with a negotiated annual payment based upon the individual budget of the hospital for health services provided by that hospital to all patients, including patients who are not Vermont residents;

(2)  provide for the collection of payments for health services provided by hospitals in the state to patients who are not residents of the state, which may be by the agency or by a third party administrator under contract with the agency for this purpose;

(3)  provide for payments for health services to hospitals not located in the state provided by them to Vermont residents.

(c)  The agency shall establish by rule income‑sensitized deductibles, co‑payments, an annual hospital care fee, or other cost‑sharing amounts applicable to the Vermont hospital security plan established by this subchapter. 

(d)  A beneficiary aggrieved by an adverse decision of the agency may appeal to the human services board as provided for in section 3090 of Title 3.

(e)  Vermont residents accessing health services at a hospital shall be considered Medicare beneficiaries for purposes of chapter 65 of this title (Medicare balance billing).


§ 2034.  GLOBAL HOSPITAL BUDGETS

(a)  Annually, the commissioner of banking, insurance, securities, and health care administration, in collaboration with the secretary, shall develop a global hospital budget for the state and individual hospital budgets for each hospital located in Vermont.  The commissioner shall consider the portions of the health resource allocation plan under section 9405 of this title, the unified health care budget under section 9406 of this title applicable to hospitals, the hospital budget review under section 9456 of this title, the negotiated global hospital payments under section 2035 of this title, and all other revenue received by hospitals in the development of the global hospital budget.  The global hospital budget for the state shall be reported annually to the general assembly on or before January 15 for the following fiscal year and shall not be effective until approved or modified by the general assembly.

(b)  The global hospital budget for the state shall serve as a spending cap within which hospital costs may be controlled, resources directed, and quality and access assured.  The global hospital budget shall limit the total annual growth of hospital costs to the Consumer Price Index plus three percent.  The commissioner shall ensure that the review of individual hospital budgets under subchapter 7 of chapter 221 of this title or the certificate of need requests under subchapter 5 of chapter 221 of this title are consistent with the global hospital budget.

(c)  The commissioner shall adopt by rule standards and procedures necessary to implement this section.

§ 2035.  NEGOTIATED GLOBAL HOSPITAL PAYMENTS

The secretary shall negotiate with hospitals for a global hospital payment for health services provided by the Vermont hospital security plan.  The payment amount shall be based upon the global hospital budget developed under section 2304 of this title and other information necessary to the determination of the appropriate payment, including all other revenue received from other sources.  The secretary shall adopt by rule standards and procedures necessary to implement this section.

§ 2036.  VERMONT HOSPITAL SECURITY TRUST FUND

(a)  The Vermont hospital security trust fund is hereby established as a special fund in the state treasury for the purpose of financing health care services provided by hospitals to beneficiaries of the Vermont hospital security plan.

(b)  Into the fund shall be deposited:

(1)  transfers from the general fund, authorized by the general assembly;

(2)  proceeds from grants, donations, contributions, and taxes and any other sources of revenue as may be provided by statute or by rule;

(3)  transfers of all federal receipts for health care purposes provided by hospitals, including all Medicaid receipts and all Medicare receipts upon federal approval; and

(4)  revenue from the sources established to fund the Vermont hospital security plan established under this subchapter.

(c)  The fund shall be administered by the secretary pursuant to subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund and any remaining balance shall be retained in the fund.  The secretary shall maintain records indicating the amount of money in the fund at any time.

(d)  All monies received by or generated to the fund shall be used only for the administration and delivery of health care services provided by hospitals covered through state health care assistance programs administered by the agency, including the Vermont hospital security plan.

Sec. 2.  18 V.S.A. § 9437(1) is amended to read:

(1)  the application is consistent with the health resource allocation plan and, as applicable, the financial parameters set by the global hospital budget established under section 2034 of Title 33;

Sec. 3.  18 V.S.A. § 9456(c) is amended to read:

(c)  Individual hospital budgets established under this section shall:

(1)  be consistent with the health resource allocation plan;

(2)  take into consideration national, regional, or instate peer group norms, according to indicators, ratios, and statistics established by the commissioner;

(3)  promote efficient and economic operation of the hospital;

(4)  reflect budget performances for prior years; and

(5)  include a finding that the analysis provided in subdivision (b)(9) of this section is a reasonable methodology for reflecting a reduction in net revenues for non‑Medicaid payers;

(6)  be consistent with the global hospital budget established under section 2034 of Title 33.

Sec. 4.  FUNDING MECHANISM

(a)(1)  A Vermont hospital security fund special committee is created to recommend to the commission on health care reform the appropriate funding mechanisms for the Vermont hospital security plan.

(2)  The committee shall consider at a minimum how to fund the program in the event that a Medicaid waiver is not approved by the Centers of Medicare and Medicaid Services and the following funding sources: 

(A)  an income tax;

(B)  a payroll tax;

(C)  premiums or cost‑sharing measures;

(D)  a value‑added tax; and

(E)  an annual hospital care fee or another consumption tax. 

(b)  The Vermont hospital security fund special committee shall consist of the chair of the joint fiscal committee, the chair of the health access oversight committee, the chair of the commission on health care reform, the secretary of the agency of human services, and the commissioner of banking, insurance, securities, and health care administration or their designees.  The committee may meet for no more than six meetings or public hearings and shall have such powers as are needed to carry out the purposes of this section.  Committee members who are not members of the general assembly or state employees shall be entitled to per diem compensation and expenses as provided in 32 V.S.A. § 1010.  Committee members who are members of the general assembly shall be entitled to compensation and reimbursement for expenses pursuant to 2 V.S.A. § 406.

(c)  The Vermont hospital security fund special committee shall issue a report with a recommendation on funding the Vermont hospital security plan to the commission on health care reform no later than November 15, 2007.  The commission on health care reform shall issue its recommendations to the general assembly no later than January 1, 2008.

Sec. 5.  FEDERAL WAIVERS

(a)  The secretary of human services shall apply for a federal Medicare waiver no later than July 1, 2007 to allow the state to include Medicare funds for hospital services in the hospital security trust fund established under subchapter 6 of chapter 19 of Title 33 and to modify the payment standards or amounts in order to include Medicare funds in the global hospital budget established under section 2034 of Title 33.

(b)  The secretary of human services shall apply for a federal Medicaid waiver no later than July 1, 2007 to allow the state to modify the payment standards or amounts in order to include Medicaid funds in the global hospital budget established under section 2034 of Title 33.

Sec. 6.  2 V.S.A. § 901(b) is amended to read:

(b)  Members of the commission shall include four representatives appointed by the speaker of the house, four senators appointed by the committee on committees, and two nonvoting members appointed by the governor.

Sec. 7.  2 V.S.A. § 903(b) is amended to read:

(b)(1)  Administration without assumption of risk.  No earlier than October 1, 2009, the commission on health care reform shall evaluate the Catamount Health market to determine whether it is a cost‑effective method of providing health care coverage to uninsured Vermonters, taking into consideration the rates and forms approved by the department of banking, insurance, securities, and health care administration, the costs of administration and reserves, the amount of Catamount Health assistance to be provided to individuals, whether the Catamount Health assistance is sufficient to make Catamount Health affordable to those individuals, and the number of individuals for whom assistance is available given the appropriated amount.  Prior to making its determination, the commission shall consider the recommendations of a health care and health insurance consultant selected jointly by the commission and the secretary of administration.

(2)(A)  If the commission determines that the market is not cost‑effective, the agency of administration shall issue a request for proposals for the administration only of Catamount Health as described in section 4080f of Title 8, except that the hospital services shall be covered under the Vermont hospital security plan established in subchapter 6 of chapter 19 of Title 33.  The agency of human services shall modify eligibility for the Vermont hospital security plan to ensure that all Vermonters enrolled in Catamount Health are provided coverage for hospital services no later than October 1, 2009.

(B)  A contract entered into under this subsection shall not include the assumption of risk.  If Catamount Health is administered under this subsection, the agency shall purchase a stop‑loss policy for an aggregate claims amount for Catamount Health as a method of managing the state's financial risk.  The agency shall determine the amount of aggregate stop‑loss reinsurance and may purchase additional types of reinsurance if prudent and cost‑effective. 

(C)  The agency may include in the contract the chronic care management program established under section 1903a of Title 33.

(3)  If Catamount Health is offered as a self‑insured product, the requirements of section 4080f of Title 8 and subchapter 3a of chapter 19 of Title 33 shall apply to the extent feasible.  The individual contributions set in subchapter 3a of chapter 19 of Title 33 shall be the premium amounts charged to individuals.

Sec. 8.  EFFECTIVE DATE

This act shall take effect from passage, except that the Vermont hospital security plan shall be implemented no later than January 1, 2009.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us