Act No. 128

(S.88)

Health; system; design; insurance; prescription drugs

This act has several major components:

· A health care system design options and implementation plan with associated goals and principles (Secs. 1, 2, 3, 6, 7, and 8)

o A consultant is to be hired to produce three or more design options, including one single-payer option and one public-insurance option. The components for each option are described in detail in Sec. 6 of the act.

o The health care reform commission (HCRC) is to make a recommendation to the joint fiscal committee (JFC) on the consultant choice and JFC is to hire the consultant. The HCRC will monitor the study and act as a resource to the consultant.

o The consultant will produce a draft report by January 1, 2011, for public input and finalize the report by February 1, 2011.

o The report will include a comparison between the options and the current state of health care in Vermont, plus the new federal reform options.

· Delegation of time-limited authority to state agencies on implementing immediate federal health care reform initiatives, such as applying for grants and certain waivers from Medicare and Medicaid (Sec. 9, 10, and 17)

· Expansions to the Blueprint for Health to make it a statewide program (Secs. 11-13, 15, 16, and 19)

o The act revises the description of the Blueprint for Health program, including providing guidance on what a medical home is and how it interacts with a community care team.

o The act requires participation by hospitals and insurers and provides for enforcement mechanisms and appeal processes.

· A payment reform pilot project (Sec. 14)

o The department of Vermont health access will hire a director to create payment reform pilot projects.

o The director will provide a strategic plan to the committees of jurisdiction by February 1, 2011.

· Immediate cost-containment provisions relating to hospital budgets and health insurance rates (Secs. 20-30)

o The department of banking, insurance, securities, and health care administration (BISHCA) will limit hospital rate increases to an amount below this year's increase and will limit net patient revenue to an increase of 4.5 percent for 2011 and 4.0 percent for 2012. BISHCA may exempt certain revenue and expenses from the calculation.

o BISHCA's authority relating to corporations affiliated with a hospital is clarified.

o Hospitals must report administrative costs in more detail as part of the budgeting process and must identify a new project in the capital plan at least two years before requesting a certificate of need for that project.

o BISHCA will be more aggressive in reducing health insurance rate increases and may request more detailed reporting from insurers as part of the rate-filing process.

o The minimum loss ratios required under the new federal Health Care Reform Act will be extended to insurers subcontracting to cover mental health conditions.

· A primary care workforce study by the department of Vermont health access with a report due to the HCRC on November 15, 2010 (Sec. 31)

· Two new health insurance provisions requiring coverage for anesthesia for certain dental procedures (Sec. 34) and up to one three-month supply per year of tobacco cessation products (Sec. 35)

· Revisions to Vermont's law regarding disclosure by manufacturers of prescribed products and a gift ban (Secs. 32 and 33) to include a confidential disclosure of free samples to the attorney general's office if data similar to those reported to the federal government are not available to the state for research purposes and to allow small gifts of food and other items at conferences.

· A menu-labeling provision similar to a provision in the federal Health Care Reform Act.

In addition, the act adds two new public members to the commission on health care reform (Secs. 4 and 5) and designates October as health care career awareness month (Sec. 31a).

Date Signed by the Governor:  Governor did not sign the bill and allowed the bill to become law without his signature

Effective Date: Varies.

(a) Secs. 1 (findings), 2 (principles), 3 (goals), 4 (health care reform commission membership), 5 (appointments), 6 (design options), 7 (grants), 8 (public good), 9 (federal health care reform; BISHCA), 10 (federal health care reform; AHS), 11 (intent), 17 (demonstration waivers), 20 through 24 (hospital budgets), 25 (CON prospective need), 29 (rules; insurers), 31 (primary care study), 32 and 33 (pharmaceutical expenditures), and 38 (obesity report) take effect on passage (May 27, 2010, the date on which the governor allowed the bill to become law without his signature).

(b) Secs. 12 and 13 (Blueprint for Health), 14 (payment reform pilots), 15 (8 V.S.A. § 4088h), 16 (hospital certification), 19 (Blueprint Expansion), 26 through 28 (insurer rate review), 31a (health care career awareness month), 36 and 37 (citation corrections), 39 (position), and 40 (appropriations) take effect on July 1, 2010.

(c) Sec. 30 (8 V.S.A. § 4089b; loss ratio) takes effect on January 1, 2011, and applies to all health insurance plans on and after January 1, 2011, on such date as a health insurer offers, issues, or renews the health insurance plan, but in no event later than January 1, 2012.

(d) Secs. 34 and 35 take effect on October 1, 2010, and apply to all health insurance plans on and after October 1, 2010, on such date as a health insurer offers, issues, or renews the health insurance plan, but in no event later than October 1, 2011.

(e) Secs. 38a (statutory revision) and 38b (menu labeling) take effect on January 1, 2011.