Commission’s report highlights inequity in hospital rates
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STATE HOUSE – The current hospital rate system is ailing, and needs to be modernized to encourage improved patient health, equity between facilities and more efficiency, according to a report released today by a Senate commission that has studied the system for the last four months.
The Special Senate Commission to Study Cost Containment, Efficiency and Transparency in the Delivery of Quality Patient Care and Access by Hospital approved its final report, which recommends that the state enact changes that steer insurance companies away from the current fee-for-service model of payment to different models that promote efficiency, effectiveness and quality of care for patients.
“Hospitals are vital to Rhode Island both in terms of our citizens’ health and as a sector of our economy, so it’s in the best interest of the public to ensure they remain solvent. The rate system is not transparent and clear enough to ensure that all hospitals are being reimbursed fairly and equitably, and it may even penalize hospitals for getting patients healthy quickly,” said Sen. Joshua Miller (D-Dist. 28, Cranston, Warwick), who is chairman of the special commission. “The rate system should be fair to all hospitals, but even more importantly, it needs to encourage and reward practices that result in better patient health and are efficient.”
The report highlighted the inequities created by a system that sets rates by negotiation between individual insurers or other payers of hospital bills, and hospitals or hospital networks. As a result different payers – whether insurance, Medicaid, individual patients or other entities – pay different rates for the same services, and hospitals are paid differently for the care they provide.
The business of hospitals is changing, and the way rates are determined should change with it, the commission said, especially as the federal health care reforms change the way health care is delivered.
Since payment is made per service without regard to the health outcome, the current system doesn’t reward hospitals that efficiently improve patient health over those that don’t.
The report found that the state could do more to demand cost efficiency and quality improvement from health insurers by combining its powers as one of the largest purchasers of health care services for its employees and public health programs.
In the report, the commission recommended that the state begin transitioning completely away from the current fee-for-service payment model toward alternative models that promote better and more efficient health care. The commission recognized that the Office of the Health Insurance Commissioner announced in July that it would begin requiring such changes in new rate plans it approves, and the commission recommends that the state monitor and support the OHIC in that effort.
The commission also recommends that the state create a Provider Payment Reform Task Force within the executive branch that would study appropriate payment levels by payer, hospital, and inpatient/outpatient service type and monitoring payment reform efforts, among other task to ensure fairer pricing. Increasing transparency and public scrutiny in the rate setting process would also improve rate fairness.
Requiring individuals to designate a primary health care provider would also result in more efficient care that would reduce costs, the commission recommended. Having a primary health care provider who is familiar with the patient and who coordinates that patient’s health care services, has been shown to be an effective way to improve individuals’ health and prevent avoidable hospitalization. Additionally, the commission recommended promotion of the Hospital Safe Transitions program, which increases safety of patients transitioning out of hospital care and reduces unnecessary readmittance, and transitioning away from a policy of relying on emergency hospital visits for behavioral health care intervention toward less-expensive community-based options.
Permanently funding programs that increase statewide coordination of health care payments and health care planning were also recommended.
Senator Miller said he and other members of the commission expect to submit legislation to affect some of the changes recommended by the commission soon. The report is available at www.rilin.state.ri.us/SpecialReports/.
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Auto airbag anti-fraud law enacted, penalties set
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STATE HOUSE – Auto airbags are intended to protect drivers in a crash, but only if they are in good functioning condition.
Legislation passed by the General Assembly and now the law in Rhode Island is designed to protect vehicle owners by establishing a comprehensive set of airbag anti-fraud policies. The legislation enacted into law without the governor’s signature is based on model language developed by the National Conference of Insurance Legislators (NCOIL).
Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly) and Sen. Joshua Miller (D-Dist. 28, Cranston, Warwick) sponsored the identical House and Senate bills – (2010-H7301aa) and (2010-S2514aa). The law became effective in late June.
“In many cases, drivers have the mistaken belief that the airbag in their car is operational, when, in fact, there have been situations in which airbags that were deployed after an accident have not been replaced by the repair shop, despite representations to the insurer and the vehicle owner that an airbag was restored,” said Representative Kennedy. “There have been cases in the U.S. in which the airbag was never properly replaced, and even worse, the cavity was fraudulently refilled with insulation, Styrofoam pellets, plastic garbage bags or a cheap, black market airbag that does not fit the specific vehicle model.”
The new law sets specific disclosure and record-keeping requirements and imposes tough penalties for those who commit fraud involving motor vehicle airbags.
The purpose of the airbag fraud law is: 1) to target unscrupulous repair shops that utilize stolen or black market airbags; 2) to target those individuals who deal on the black market by stealing non-deployed airbags from motor vehicles by criminalizing this activity; 3) to target repair shops that fraudulently charge consumers and insurers for the replacement of airbags when the repair was unnecessary, as well as those repair shops that fraudulently charge consumers and insurers for new airbags when the shop actually utilized a cheap stolen airbag, and 4) to target those who replace an airbag with either the wrong airbag for the vehicle or who fill the airbag cavity with nothing more than junk and charge the consumer and the insurer for a legitimate airbag.
Those who violate the new law will be subject to penalties established under the state’s deceptive trade practices statutes, and will also be guilty of a felony punishable by a fine of between $1,000 and $2,000 and imprisonment of up to two years. Any person whose violation results in serious bodily injury or death can be imprisoned for up to 10 years and fined up to $100,000.
“The legislation does allow for the use of non-deployed airbags that have been salvaged from other similar vehicles and have been properly stored and installed in the proper vehicle. During the 2009 ‘Cash For Clunkers’ program, there were many reclaimed airbags and other automobile parts that were recovered for reuse in automobile repairs,” said Senator Miller.
Anyone who sells or installs a salvaged airbag must disclose that information to the vehicle purchaser or owner. A strict record-keeping process is required by the new law which establishes a paper trail that provides a degree of assurance to consumers, insurers and law enforcement that a legitimately purchased airbag was utilized in the repair.
The National Conference on Insurance Legislators, which Representative Kennedy previously served as president for a term, studied the issue of fraudulent airbags throughout 2009 and adopted the model act – on which the Rhode Island law is based – as a result of concerns raised by the Coalition Against Insurance Fraud.
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New law takes aim at construction diesel emissions
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STATE HOUSE – The state will lead the way in reducing diesel emissions from construction projects and school buses to protect Rhode Islanders’ health under a new law sponsored by Sen. Joshua Miller and Rep. Raymond J. Sullivan Jr.
The legislation (2010-S 2440Aaa, 2010-H 7850A) aims to reduce pollution in Rhode Island by requiring heavy-duty diesel equipment being used for state projects to be retrofitted with emissions controls, and by implementing anti-idling standards and the use of ultra-low sulfur diesel.
“Diesel emissions are a serious risk to Rhode Islanders’ health that we have to address. Our state is among the worst five states for health risks posed by diesel pollution, and we have the eighth-highest childhood asthma rate. The technology to reduce emissions is expensive, but this new law represents a cooperative effort between the state and the construction industry to get it onto the equipment used for state construction, and to implement good construction practices that reduce citizens’ exposure to fumes,” said Senator Miller (D-Dist. 28, Cranston, Warwick).
Said Representative Sullivan (D-Dist. 29, Coventry, West Greenwich), “Construction is responsible for a surprising amount of the diesel pollution in our air – about 40 percent. There are ways we can cut down on that pollution, and some of those solutions are just simple changes in practices. Just turning off engines instead of idling makes a huge difference in eliminating unnecessary waste, and keeping engines as far away as possible from homes, schools, nursing homes and hospitals will cut down on health risks that they cause.”
The law requires that state-funded contracts for public works include provisions requiring contractors to reduce diesel emissions by setting up a staging zone away from places like schools, hospitals and homes, when possible, for diesel vehicles; limiting engine idling to less than 5 minutes, except for equipment like cement trucks that require the motor to run in order to function; and using ultra-low sulfur diesel fuel for off-road and non-road heavy-duty diesel engines, including generators.
Beginning in 2013, the law will require emissions controls on most heavy-duty diesel equipment used on state public works projects costing over $5 million. Those projects will be required to designate at least 1 percent of their total budgets for the retrofitting of heavy-duty diesel-powered equipment used on them.
The Department of Transportation will test the new standards and practices on one or more construction projects started by September of this year. The DOT will submit a report to the General Assembly on that pilot project.
Under the law, the Department of Environmental Management will establish a listing of the retrofit technology available for various types of heavy-duty diesel equipment to assist state contractors, who would be allowed to choose the equipment that would most efficiently decrease emissions on each project at the lowest possible cost.
The DEM will also gather stakeholders in the construction industry and environmental and health organizations to determine how to handle equipment that was built before 1993, since retrofitting that equipment is more difficult and expensive.
Additionally, the legislation institutes a program for retrofitting school buses to reduce their diesel emissions, taking advantage of federal funds available to reimburse school bus contractors for the emission reduction equipment. The program prioritizes the retrofitting of buses used in urban areas, and requires retrofit equipment to reach the best emissions reductions standards available for the bus on which it is installed.
The legislation was developed by a study commission that met this winter to identify the most effective and efficient ways to reduce pollution for the heavy diesel equipment that is commonly used in public works projects. The commission, which was led by Senator Miller, conducted an in-depth review of the health, environmental and economic implications of implementing a diesel emissions reduction requirement for state construction projects. The commission included environmental and health advocates, representatives of state contractors and construction workers as well as lawmakers.
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New law regulates discount buying clubs
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STATE HOUSE – Legislation passed by the General Assembly -- to clearly define discount buying clubs and provide certain contract requirements and a three-day right of rescission for those who become members – has become law.
Approved by the legislature were bills, (2010-H7597A) and (2010-S2621A) -- introduced by Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly) and Sen. Joshua Miller (D-Dist. 28, Cranston, Warwick). The bills became law on June 12 without the governor’s signature and take immediate effect.
The new law based on the Kennedy/Miller bills will add a new chapter to state law to regulate discount buying clubs. The law will place requirements on direct buying club contracts by providing a three-day right to rescind and to require that all contracts between the club and the consumer be in writing, signed and dated by all contracting parties. The contract must also provide the categories of goods and services available, the procedures by which the customers can order goods, the price setting mechanism of the club and the seller’s warranty obligations.
The new law will prohibit certain acts by a buying club, including deceptively stating that joining the club is a one-time offer or the opportunity to join is limited; discouragement or refusal to allow a customer to inspect catalogues and price sheets during regular business hours; not allowing a customer to compare prices and failing to honor a request by a customer to cancel orders under certain circumstances.
The bill sponsors said that while most clubs of this sort charge a membership and annual fee to allow customers to purchase goods on-site at reduced prices, others have created a new concept in buying that warrants careful consumer deliberation. One such club requires potential customers to pay $5,000 to become a member, yet once inside the door of the establishment there are no goods for sale but rather catalogues from which to make purchases. Once signed up and paid, individuals who are displeased with the arrangement are not allowed to opt out of the agreement.
The bills were introduced on behalf of the Attorney General of Rhode Island. Florida, Connecticut, Georgia, Idaho and North Carolina have also enacted legislation to allow for a buyer’s right to cancel contracts of this nature.
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State House Room 20
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New law targets insurance fraud
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STATE HOUSE -- Legislation passed by the General Assembly to help prevent insurance fraud has become law. Its sponsors say it will help to bring down the enormous cost of fraudulent insurance payouts that drive up premium prices.
Passed by the legislature were (2010-H7605A), introduced in the House of Representatives by Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly), and (2010-S2401A), sponsored in the Senate by Sen. Joshua Miller (D-Dist. 28, Cranston, Warwick). The bills became law on June 12 without the governor’s signature and take effect on January 1, 2011.
The legislation adopts a model insurance fraud prevention act recommended by the National Association of Insurance Commissioners and already in place in 30 states. It will require insurers to have fraud warnings on claims and applications forms.
The Insurance Information Institute estimates that 10 percent of property and casualty insurance industry losses and loss adjustment expenses are due to fraud, which costs about $30 billion a year nationally. Requiring insurers to have an anti-fraud plan to properly regulate the industry and to take enforcement action against its licensees will help protect the public from the consequences of fraud, explained the sponsors of the bills, who said it will strengthen insurance regulation without requiring additional resources.
The Department of Business Regulation listed the bill as one of its priority pieces of legislation for this session.
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State House Room 20
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Miller, Handy meeting with National Grid on shutoff solutions
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STATE HOUSE – As the 2010 legislative session draws to a close today, Sen. Joshua Miller and Rep. Arthur Handy said they are committed to continuing their work to prevent utility shutoffs for Rhode Islanders struggling to pay their utility bills.
“Last week Representative Handy and I met with Mike Ryan, National Grid’s president of Rhode Island Distribution, to discuss what could be done to help those struggling to pay their energy bills in lieu of passing specific legislation,” said Senator Miller (D-Dist. 28, Cranston, Warwick), who is chairman of the Senate Corporations Committee. “The meeting went very well, with Mr. Ryan offering to work with Senate and House leadership on innovative ways to assist those who are having trouble keeping their energy bills current. His willingness to hold these crucial conversations, combined with legislation permitting energy decoupling that was just signed into law, makes me confident that National Grid will be more equipped than ever to ensure residents in need aren’t left in the dark during these difficult economic times.”
This session Representative Handy and Senator Miller sponsored the Home Energy Rate Affordability Act, which would help end the cycle of utility shutoffs for struggling Rhode Islanders though a combination of discounts, subsidies and debt forgiveness in exchange for customers’ sustained effort to pay what they can afford.
They also supported successful legislation to establish a mechanism for the decoupling of National Grid’s electricity and gas revenues from sales in order to improve the electric and gas distribution system. Currently, National Grid’s profit is based on the amount of power it supplies, disincentivizing the company from encouraging conservation. Decoupling is seen by advocates as a means to encourage effective conservation programs.
The two legislators are planning meetings with National Grid this summer to discuss alternatives to the shutoff policies currently in place to more effectively help customers who have been shut off become current on their utility bills.
“We hope that these meetings will result in implementation of some of the meaningful reforms we’ve been advocating to help prevent Rhode Islanders from getting stuck in the cycle of utility shutoffs. Some of the advancements we’d like to see could be made cooperatively with National Grid, without the need for legislation, and I’m excited about helping to make them a reality,” said Representative Handy (D-Dist. 18, Cranston), who serves as chairman of the House Environment and Natural Resources Committee.
Said Ryan, National Grid’s president of Rhode Island Distribution, “I am committed and looking forward to working with Senator Miller and Representative Handy to find solutions to the difficult problem of utility shutoffs and nonpayment in the coming months.”
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, Publicist
State House Room 20
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