Division of Health Care Finance and Policy

Directs the Division of Health Care Finance and Policy (DHCFP) to analyze the impact of existing mandated insurance benefits on public health and overall health care costs and issue a report to the legislature at least once every 4 years. DHCFP must consult with the Department of Public Health and UMass Medical School to ensure that all mandated benefits continue to meet clinical standards of care. DHCFP may file legislation to amend or repeal existing mandates.

Adds new definition of “Health Status Adjusted Total Medical Expense” within the Division of Health Care Finance and Policy (DHCFP) statute. This definition relates to health care payer reporting requirements. The Division of Insurance (DOI) and DHCFP will determine uniform methodologies for calculating and reporting insurer medical loss ratios, health status adjusted total medical expenses, hospital costs and expenses, and relative prices paid by insurers to providers. These agencies will collect and publicly report this information.

Adds new definition of “Relative Prices” within the Division of Health Care Finance and Policy (DHCFP) statute.
 
This definition relates to provider reimbursement rates. The Division of Insurance (DOI) and DHCFP will determine uniform methodologies for calculating and reporting insurer medical loss ratios, health status adjusted total medical expenses, hospital costs and expenses, and relative prices paid by insurers to providers. DOI and DHCFP will collect and publicly report this information.

Adds to existing Division of Health Care Finance and Policy (DHCFP) payer data submission requirements by including health status adjusted total medical expenses (TME) by provider group, relative prices paid to every health care provider in the payer’s network by type of provider, and hospital inpatient and outpatient costs. Payers must report each of the three new data categories according to a uniform methodology determined by DHCFP.  Hospitals must report to DHCFP inpatient and outpatient costs, including direct and indirect costs, according to a uniform methodology. 

Requires that Health Insurance Responsibility Disclosure (HIRD) forms, which employers with 11 or more full time equivalent employees are required to submit to the Division of Health Care Finance and Policy (DHCFP) to verify that they provide section 125 plans and to verify that employees who declined employer sponsored insurance have alternative coverage, be shared with the Department of Revenue, the Commonwealth Health Insurance Connector Authority and the Health Care Access Bureau within the Division of Insurance for enforcement purposes.

Any individually identifiable information will not be public record.

Instructs the Division of Insurance (DOI), in consultation with the Division of Health Care Finance and Policy, to establish regulations directing health insurance carriers to calculate and report medical loss ratios of health benefit plans. The regulations must provide definitions for carriers to distinguish between medical claims expenditures and administrative cost expenditures. Before adopting final regulations, DOI must consult with designated stakeholders.

Instructs the Division of Health Care Finance and Policy (DHCFP), in consultation with the Division of Insurance, to establish regulations directing health insurance carriers to calculate and report health status adjusted total medical expenses for provider groups determined by zip code. In the regulations, DHCFP must specify a uniform method for calculating total medical expenses among each provider group, determine which non-claim related payments must be included in the calculations, account for health status and number of patients within each group, and specify reporting requirements.

Instructs the Division of Health Care Finance and Policy (DHCFP), in consultation with the Division of Insurance, to establish regulations directing health insurance carriers to calculate and report relative prices paid to health care facilities and providers. In the regulations, DHCFP must specify a method to account for a uniform mix of products and services and all non-claims related payments to providers.

Instructs the Division of Health Care Finance and Policy (DHCFP), in consultation with the Division of Insurance, to establish regulations directing hospitals to calculate and report all costs, including inpatient and outpatient costs and direct and indirect costs. Calculations must include costs and cost trends for labor, debt-related expenses, advertising and marketing, insurance, health information technology, management, research, academic costs, contributions, and all business operation costs. Before adopting final regulations, DHCFP must consult with designated stakeholders.

Directs the Secretary of Health and Human Services to organize a working group consisting of many state agencies and health care community stakeholders to identify ways to streamline health care administration requirements and reduce reporting requirements through the use of a single all-payer database.

The group must issue a report to the legislature by April 1, 2011 identifying steps each agency will take to collectively simplify administrative and reporting requirements.

Directs relevant policymaking agencies to consider the special needs of children and pediatric patients when developing and utilizing data standards, quality measurement systems, wellness initiatives, or making comparisons of costs and prices. Policymakers may require that comparative data and reports related to pediatric patients and providers be segregated from adult patients and providers.

Requires that the Division of Health Care Finance and Policy (DHCFP) encourage providers and payers to adopt a payment system on a bundled payment, rather than fee-for-service, basis to reduce costs and improve quality and coordination of health care services. DHCFP must assist providers and payers to adopt such a payment system by making technical support available to them. DHCFP must also examine existing and proposed bundled payment models and publish results of research, study the effects of federal programs that promote bundled payment systems, and identify financial resources that may become available to providers while they implement bundled payment systems. The statute encourages DHCFP to implement pilot bundled payment programs before April 1, 2011 for at least 2 acute conditions or procedures where health benefit payers will reimburse health care providers for inpatient services, as well as certain pre- and post-inpatient stay, on a bundled payment basis. DHCFP is also encouraged to implement additional pilot bundled payment programs for at least 2 chronic conditions by July 1, 2011. DHCFP must file reports with the legislature detailing the efforts it undertakes to support providers and payers to implement bundled payment programs and the progress it makes toward implement the encouraged pilot programs.