June 13, 2003

 
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121st Legislature Adjourns 1st Regular Session Just After 4 this Morning
Dirigo Health Plan Enacted; Fund for a Healthy Maine Bill Carried Over to Second Regular Session
Members of the 121st Maine Legislature finished their First Regular Session shortly after 4 a.m. on Saturday morning.  In a marathon final week, the Legislature completed all of their work except tax reform and finalizing the bond package.  The Appropriations Committee will continue to work on bonds and the Taxation Committee will attempt to reach consensus on a tax reform package to present to a special session of the Legislature likely to be scheduled during the week of 6/23/03.

Consensus Reached on Dirigo Health Plan
It was a hectic final week of work on the Governor's Dirigo Health Plan.  On Monday afternoon, the Joint Select Committee on Health Care Reform met to review a draft of L.D. 1611 that received a 9-5 'ought to pass' recommendation on the previous Friday.  The Committee's Republican minority raised 11 points for continued discussion. 

About 4 p.m. on Monday, the Committee adjourned to enable the Governor's staff and the Committee majority to see if a compromise could be reached on the 11 points raised by the minority.  Negotiations continued throughout the afternoon and into the evening, mostly behind closed doors.  Occasionally, the MMA or other stakeholders were asked to answer a question or respond to a proposal.  Finally, around 10 p.m. the Committee returned to a public session to announce that a compromise had been reached to bring about a unanimous 'ought to pass' recommendation to the full Legislature.

The concessions granted to achieve the unanimous report included greater legislative oversight of the implementation of the Dirigo Health Plan, a revised plan for establishment of a high risk pool, a study of the medical malpractice insurance market in Maine, and the inclusion of a 12.5% floor for non-hospital projects in the CON pool.

In a final work session, the Committee added an 'emergency preamble' to the bill, meaning that it would have to pass the House and Senate by a 2/3 rather than simple majority and that it would become effective immediately upon the Governor's signature.  In preliminary votes in the House on 6/12 and the Senate on 6/13, the bill failed to achieve 2/3 by votes of 95-46 and 20-14 respectively.  The Senate removed the emergency preamble and the bill ultimately passed by votes of 105-38 in the House and 25-8 in the Senate--by 2/3 in each chamber. [return to top]

View the Dirigo Health Plan Online or Download the Plan
Committee Amendment 'A' to L.D. 1611, An Act to Provide Affordable Health Insurance to Small Businesses and Individuals and to Control Health Care Costs

This is the final text of the bill--without the emergency preamble on the first page. [return to top]

View a Summary of the Final Compromise on the Dirigo Health Plan

MEMORANDUM

 

 

To:                   Members, Select Committee on Health Care Reform

 

From:               Colleen McCarthy Reid, Legislative Analyst

                        Lucia Nixon, Legislative Analyst

                        Jane Orbeton, Legislative Analyst

 

Date:                June 9, 2003

 

Re:                   Summary of Provisions of Unanimous Committee Amendment to LD 1611,

                        An Act to Provide Affordable Health Insurance to Small Businesses and

                        To Control Health Care Costs (reflects vote on 6/9)

____________________________________________________________________________________

 

Part A

         Establishes Dirigo Health, an independent executive agency, to arrange for the provision of health coverage to small employers, their employees and dependents and individuals on a voluntary basis:  

o        Governed by a board of 8 members, 5 voting members appointed by the Governor and 3 ex officio non-voting members: Commissioners of Professional and Financial Regulation and Administrative and Financial Affairs and the director of the Governorís Office of Health Policy and Finance.

o        Board determines the services and benefits of Dirigo Health Insurance, also the premiums, co-pays, deductibles and out-of-pocket maximums; report required to Legislature when benefits package determined (requires Dirigo Health Insurance to begin operations no later than October 1, 2004).

o        Board contracts with health carriers for the provision of coverage to eligible individuals and employees, meeting all insurance mandates and reimbursing health care providers at rates negotiated between the provider and the carrier.

o        Board required to establish minimum contribution levels by employers for coverage for employees and dependents---contribution level may not exceed 60% of cost of coverage

o        Eligible enrollees are defined as employees that work at least 20 hours per week.  Employees working fewer than 30 hours will not be counted in the participation rate formula.

o        Board may establish sliding scale subsidies for persons below 300% of poverty level who are not eligible for MaineCare.

o        Annual report to committees of the Legislature on operation of Dirigo Health and the small group and individual health insurance markets and the numbers of uninsured

o        If carriers do not offer and deliver Dirigo Health Insurance, board may propose legislation to establish a new nonprofit health plan or expand an existing public plan subject to legislative approval.

o        Board determines annually aggregate measurable cost savings, including reduction in bad debt and charity care, due to Dirigo health coverage and MaineCare expansion. 

o        Board establishes a savings offset amount, not to exceed 4 %, to be paid by health carriers, 3rd party administrators and employee benefit excess insurance carriers into a dedicated fund to fund premium subsidies and the Maine Quality Forum. 

o        Board will develop methodology for determining assessment for third-party administrators and submit that legislation by 2/1/05

o        Establishes within Dirigo Health a high risk pool for persons whose care costs over $100,000 per year and for those with certain named diagnoses; requires Dirigo Health to develop disease management protocols for persons in the high risk pool.

o        Requires report comparing Dirigo Health experience to the states with high risk pools.  If after 3 years, Dirigo Health underperforms as to average premium rates and average rates of uninsured compared to states with high risk pools, Dirigo Health is charged with submitting legislation to create a high risk pool on 1/1/08

         Establishes Maine Quality Forum to collect and disseminate research, adopt quality and performance measures, coordinate quality data, issue quality reports in conjunction with the Maine Health Data Organization, conduct consumer education and technology assessment reviews, encourage the adoption of electronic technology, make recommendations for the State Health Plan and issue an annual report

         Establishes the Maine Quality Forum Advisory Council to assist the Dirigo Health board, advise the forum, make recommendations for the State Health Plan and serve as a liaison to other health care quality organization  

         Expands MaineCare coverage for children and adults and provides coverage for expansion enrollees who enroll individually and through an employer group.  Expansion of MaineCare not effective until Dirigo Health becomes operational.

         Requires monthly reporting of the noncategorical adult MaineCare expansion

         Legislative authorization for Maine Small Business Health Coverage Plan and Maine Consumer Choice Health Plan is retained

 

 

Part B

         Directs the Governor to issue a biennial State Health Plan, issue a statewide health expenditure budget report and establish the capital investment fund, an annual limit for resources allocated under the certificate of need program.  Within the capital investment fund, 12.5% will be designated for non-hospital projects for a period of 3 years. 

         Specifies that a certificate of need or public financing that affects health care costs may not be provided unless it meets the goals and budgets in the State Health Plan.

         Establishes the Advisory Council on Health Systems Development to advise the Governor on the development of the State Health Plan by collecting and coordinating data, synthesizing research and conducting at least 2 public hearings.

 

Part C

         Applies certificate of need (CON) requirements to:

o        The portions of an ambulatory surgical facility used by patients or to support ambulatory surgical care; and

o        New technology costing over $1,200,000 in the office of a private practitioner

o        Automatically adjusts the CON thresholds to the Consumer Price Index, medical index

         Expands the bases on which the Commissioner of Human Services makes CON decisions, adding consistency with the State Health Plan, reference to quality outcomes, reference to inappropriate increases in service utilization and the limits of the capital investment fund

         Allows the Commissioner of Human Services to receive reports from a panel of experts on CON applications and requires assessments from the Bureau of Health and the Superintendent of Insurance.

         Requires hospitals to prepare a list of average prices and to make the lists available to the public.

         Requires health care practitioners to notify patients in writing of charges for commonly offered health care services and to assist the patient in calculating the amount of the patientís co-pay 

         Requires the Maine Health Data Organization to adopt rules to collect data on health care quality based on the quality measures adopted by the Maine Quality Forum

         Requires the Maine Health Data organization to issue reports on health care services, costs, and quality

 

Part D

         Requires health care practitioners to submit claims in electronic format using standardized claim forms and allows carriers to reject claims not submitted electronically, subject to exceptions and waivers for offices of health care practitioners with fewer than 10 staff.  Becomes effective 10/16/03.

 

Part E

         Requires Superintendent of Insurance to adopt rules for the filing of annual report supplements by health insurers and health maintenance organizations

         Requires small group health plans to submit rate filings to the Superintendent of Insurance and imposes hearing and rate review on those filings unless carrier opts to guarantee 78% loss ratio or refund excess premiums

         Requires individual and small group health insurance rates to reflect savings payment offsets and any recovery of those offsets in premium rates

         Requires large group health carriers to file annually certification that rating practices and methods meet actuarial principles and that savings offset payments and recovery offsets have been properly included in the filing 

         Allows managed care health plans to apply to Superintendent of Insurance for permission to offer plans with financial incentive provisions to encourage the use of designated providers of specialty and hospital care if plan does not exceed the Rule 850 travel standards by 100 percent and meets quality criteria; provision is repealed on 7/1/07 and report required to IFS Committee on 1/1/06; Superintendent of Insurance required to adopt major substantive rules to establish quality criteria.

 

Part F

         Requests voluntary cooperation of health care practitioners, hospitals and health carriers to limit financial growth for a period of 1 year

         Requires the Governorís Office of Health Policy and Finance and the Maine Hospital Association to agree on a timetable, format and methodology for reporting on hospital charges, cost efficiency and consolidated operating margins

         Requires the Department of Human Services to conduct a comprehensive study of MaineCare reimbursement rates and to report by January 15, 2004

         Provides $500,000 in General Fund money to increase the physician incentive payment program within the MaineCare program

 

Part G

         Directs the Governor to engage in negotiations to increase access to federally sponsored health services for veterans and to increase Medicare reimbursement rates for health care providers

         Creates the Task Force on Veteransí Health Services to assess the needs of veterans for health care services and the availability, accessibility and quality of those services 

         Requires a study of non-economic damages in medical malpractice cases

  [return to top]

Constitutional Amendment on the Fund for a Healthy Maine Carried Over
Late this week it became apparent that L.D. 1612, Resolution, Proposing an Amendment to the Constitution of Maine to Preserve the Fund for a Healthy Maine would have difficulty achieving the 2/3 majority necessary to put the question on the ballot this coming November.  The Joint Select Committee on Health Care Reform split 10-4 on a vote to recommend passage of the amendment.  Two Republican members would support the amendment if it included a provision allowing the Legislature to override the constitutional protection by a 2/3 vote and two other Republican members voted "ought not to pass."

On Thursday, 6/12, L.D. 1612 passed by a vote of 86-48 in the House, but failed to achieve 2/3.  Proponents of the bill met with the Governor's staff and Legislature's leadership throughout the morning on Friday, 6/13 to assess whether there were sufficient votes in the House and Senate to pass the bill this session.  When it became clear that the votes just were not there, both chambers voted to commit the bill to the Health Care Reform Committee where it will be carried over to the Second Regular Session next year.

While some members of each party have always had concerns about binding the Legislature's hands in this way, regardless of the merits of the FHM, L.D. 1612 could not achieve 2/3 of each chamber because of the political dynamic at the end of this session.  [return to top]

Legislature Approves Maine Rx Plus
The recent Supreme Court decision on MaineRx was seen as a green light by the Department of Human Services and the Legislature to bring the program into existence.  A new bill, L.D. 1634, An Act to Improve the MaineRx Program, makes some changes to the original program, renaming it Maine Rx Plus.  The bill was the subject of much debate on the floor, primarily because it had no hearing or work session but was hustled quickly to the floor with only a short briefing to the Health and Human Services Committee by Peter Walsh, Acting Commission of the Department.  There was an unsuccessful effort by Republicans to get the bill sent back to the committee and carried over until next session.

The new program would limit eligibility to individuals at 350% of poverty (which is $42,200 for a couple).  If you are above that benchmark but spend a disproportionate amount of your salary out of pocket on prescription drugs or general medical expenses, you are eligible for a discount.  The drugs they hope to be discounted include those on the MaineCare Preferred Drug List.  They expect 275,000 people in Maine to be eligible.  The program is expected to be implemented by January 1, 2004.  The average discount will be roughly 15% of retail. [return to top]

Nicotine in Bottled Water
Senator John Martin (D-Aroostook)  introduced a bill at the 11th hour to ban the sale of bottled water laced with nicotine, after seeing an ad for this product in the Sports page of the newspaper.  The bill, L.D. 1631, An Act to Prevent the Sale of Water laced with Nicotine in Maine, was carried over to be dealt with in the second session.  The Health and Human Services Committee met briefly to discuss the bill and agreed that it was an issue that warranted in-depth attention.  The water is apparently not being marketed as a way to wean yourself off cigarettes, rather it is being used much as Jolt or other stimulant drinks are promoted.  Senator Martin, in a series of meetings scheduled with the president of the manufacturer, is hoping to convince the company not to market in Maine until the Legislature addresses the issue.  So far, heís been unsuccessful. [return to top]

LifeFlight Bond Cleared for Landing
All indications as we go to press are that the bond to fund improvements to LifeFlight will be passed by the Legislature.  The bond question would then appear on the ballot this fall asking voters to support roughly $4 million in capitol improvements such as landing pads and weather-related technology.  This money would be matched by private funds. [return to top]

Conference call and Meeting Information
There will be no further meetings or conference calls scheduled at this time.  [return to top]

Legislative links

  • Maine Legislature's main page
  • Joint Standing Committee list
  • Legislative action - audio links
  • AMA's Washington, D.C. website
  • [return to top]

    To Contact Your State Legislator in Augusta
    For Members of the House:

    The Honorable John/Jane Doe

    State House Station 2

    Augusta, Maine 04333-0002

    1-800-423-2900/207-287-1400 (to leave a message)

    For Senators:

    The Honorable John/Jane Doe

    State House Station 3

    Augusta, Maine 04333-0003

    1-800-423-6900/207-287-1540 (to leave a message)

    As the session is coming to a close, you may contact Charyl Smith at the MMA office at 207-622-3374 to receive home contact information for your legislator.  You may also see the Legislative link section of this publication to get the information off the Maine State website. [return to top]

    To Contact Governor Baldacci
    The Honorable John E. Baldacci

    State House Station 1, Augusta, Maine 04333-0001, 287-3531

    governor@maine.gov [return to top]

    For more information or to contact us directly, please visit www.mainemed.com l ©2003, Maine Medical Association