Massachusetts Governor Deval Patrick has just submitted to the state legislature a bill with several provisions the Governor says are "tools for easing the burden of health care costs on small businesses."

Under existing authority, the Governor has directed the Commissioner of Insurance to immediately file an emergency regulation requiring carriers offering small group health insurance plans to file all changes to small group product base rates and to small group rating factors at least 30 days before the proposed effective date. The commissioner can disapprove any change to the small group rating factors that are discriminatory or not actuarially sound. The legislation provides that any increases significantly higher than the current level of medical cost inflation will be presumptively disapproved. The carrier must then communicate to all employers and individuals covered under any small group product that the proposed increase has been presumptively disapproved, and is subject to a hearing at the division of insurance.

"This is aggressive, but we have to give small businesses some economic breathing room until we can implement the kind of payment reform that will curtail costs across the health care system," the Governor stated in his commentary on the bill. "Controlling health care costs is a shared responsibility, and we have to look at the market conduct of both carriers and providers. That is why we will also file legislation to implement an oversight plan to screen provider rate increases. It is essential that there be full transparency and accountability in what consumers pay for health care and what providers charge insurance companies."

Another provision would hold that any contract for payment of hospital, physician group practice, or imaging services between a provider and a carrier must submitted to the Division of Health Care, Finance and Policy for review at least 30 days before the proposed effective date of the contract. The Division then would review the contracts to determine whether provider payments under the contract would increase by more than the twelve-month change of the Consumer Price Index for Medical Care Services as of December 31 of the preceding year. The Division may schedule a public hearing on any proposed or existing contract.

Any contract under which provider payments increase by an amount in excess of the applicable Consumer Price Index for Medical Care Services would be presumptively disapproved. The Division may conduct a hearing on any contract that is presumptively disapproved and will approve or disapprove the contract based on its findings following the hearing. The Division also can create regulations to monitor providers and enforce financial penalties against them if they shift costs to other health care payers as a result of the requirements in the legislation.

The legislature itself would have a moratorium on all new mandated health benefit legislation until July 1, 2012, which would help stabilize premium rates for small businesses.

Read More:
Links: The bill: http://www.mass.gov/?pageID=gov3terminal&L=3&L0=Home&L1=Legislation+%26+Executive+Orders&L2=Legislation&sid=Agov3&b=terminalcontent&f=legislation_legis_021010jobs&csid=Agov3

Governor Patrick's remarks: http://www.mass.gov/?pageID=gov3terminal&L=3&L0=Home&L1=Media+Center&L2=Speeches&sid=Agov3&b=terminalcontent&f=text_2010-02-10_jobs&csid=Agov3

Press release: http://www.mass.gov/?pageID=gov3pressrelease&L=1&L0=Home&sid=Agov3&b=pressrelease&f=021010_jobs&csid=Agov3

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