Act No. 171 (H.559). Health; health insurance; health benefit exchange; Green Mountain Care board; certificate of need; medical malpractice; prescription drugs; Blueprint for Health; Medicaid; Medicaid waiver

An act relating to health care reform implementation

Vermont Health Benefit Exchange

This act requires all individual and small group health insurance plans to be sold through the Vermont Health Benefit Exchange (Exchange) and defines a qualified employer for purposes of the Exchange as an employer with 50 or fewer employees for 2014 and 2015, an employer with 100 or fewer employees for 2016, and an employer of any size from 2017 on. An employer that expands beyond 50 or 100 employees may continue to purchase insurance through the Exchange as long as it continues to make Exchange coverage available to its employees. The act requires health plans offered through the Exchange to include at least the bronze level of coverage and requires the Exchange to clearly indicate to prospective purchasers of a bronze plan, and of other plans as appropriate, that the plan has the potential for significant out-of-pocket costs in addition to the premium.

The act requires the Green Mountain Care (GMC) board to approve a full range of cost-sharing structures in the Exchange for each actuarial value and to allow insurers to offer wellness rewards and discounts. It directs the Exchange to establish procedures allowing health insurance agents and brokers to be appropriately compensated for facilitating the enrollment of individuals and employers in Exchange plans and for assisting qualified individuals with applying for premium tax credits and cost-sharing subsidies. The act also requires Exchange navigators to provide information about Sec. 125 cafeteria plans and to help employers set them up.

The act allows small employers to enroll in plans through the Exchange as early as October 1, 2013 and no later than the renewal date of a plan that took effect before January 1, 2014. It allows individuals to enroll in plans through the Exchange between October 1, 2013 and March 31, 2014, pursuant to federal regulations. It permits the commissioner of financial regulation to allow small group and association plans to extend beyond their renewal date in order to ensure a smooth transition to the Exchange. The act also authorizes the department of financial regulation (DFR) and the GMC board to continue to approve rates and forms for nongroup and small group market plans, or to extend coverage under existing plans, if the Exchange is not operational by January 1, 2014 and enrollment cannot be accomplished in any other way. Similarly, the act authorizes the department of Vermont health access (DVHA) to continue coverage under the Vermont health access plan (VHAP) and the employer-sponsored insurance assistance program (ESIA) if the Exchange is not operational by January 1, 2014 and enrollment cannot be accomplished in any other way.

Additional insurance provisions

The act merges the individual and small group health insurance markets into one market beginning in 2014, with plans available for individuals and for employers with up to 50 employees in 2014 and up to 100 employees beginning in 2016. It preserves existing individual and small group market provisions for health insurance plans that are grandfathered under the federal Patient Protection and Affordable Care Act (ACA) unless or until a plan loses its grandfathered status. The act amends the health insurance rate review process to require the commissioner of DFR to make a recommendation to the GMC board on a rate request within 30 days instead of 10 days; to require the GMC board to approve, modify, or disapprove the rate request within 30 days; and to require DFR to apply the GMC board's decision within five business days.

The act prohibits the inclusion of agents' and brokers' fees in insurance rates in the individual and small group markets beginning in 2014 and allows the Exchange to create a mechanism for paying agents and brokers outside insurance rates. It requires disclosure of agents' and brokers' fees in the large group market beginning July 1, 2012 and disclosure of their fees in the individual and small group markets from July 1, 2012 until the date the insurer no longer pays any such fees. The act prohibits any insurer from including a discretionary clause in a contract for health insurance, life insurance, or disability income protection coverage, and renders any such provision null and void as of July 1, 2012.

Beginning March 1, 2014, when prior authorization is required for prescription drugs, medical procedures, and medical tests, the act requires health plans to accept both the national standard transaction information for electronic authorization and uniform prior authorization forms developed by DFR. By September 1, 2013, the act requires DFR to develop the uniform prior authorization forms, based on specified criteria, with one form for medical procedures and tests and as many forms as the department thinks appropriate for prescription drugs.

Green Mountain Care Board

The act creates a billback provision to allocate expenses among hospitals and health insurers for certain GMC board regulatory activities and requires DFR and the GMC board to recommend by February 1, 2013 how best to allocate these expenses in the future. It grants to the chair of the GMC board enforcement authority similar to that of the commissioner of DFR. The act transfers authority from DFR to the GMC board over certificates of need, hospital budget reviews, and the unified health care budget. It also transfers authority from DVHA to the GMC board for payment reform pilot projects and delays the dates on which the projects will begin from one by January 1, 2012 and two or more by July 1, 2012 to one by July 1, 2012 and two or more by October 1, 2012. The act allows the GMC board to use DFR's hospital budget review rules until the earlier of March 1, 2013 or the board's adoption of its own rules. It requires the GMC board to adopt rules by January 1, 2013 regarding insurance rate reviews, hospital budget reviews, and certificates of need.

Mental health and substance abuse treatment services

The act requires DFR to develop quality indicators to evaluate and ensure health insurer compliance with mental health parity laws. It requires the departments of health and of mental health to evaluate and ensure that health care professionals and facilities provide high-quality mental health and substance abuse treatment services. Beginning January 1, 2014, the act prohibits health insurance co-payments for primary mental health care and services from exceeding co-payments for care and services from a primary care provider and co-payments for specialty mental health care and services from exceeding co-payments for care and services from a specialist. The act requires DFR to recommend by January 15, 2013 guidelines for distinguishing between primary and specialty mental health services and to adopt these guidelines by rule by October 1, 2013. The act also directs the department of mental health to establish an office of the mental health care ombudsman in the state's designated protection and advocacy agency and specifies that the agency is not required to undertake any additional duties beyond those required under federal law.

Medical malpractice

The act requires a party filing a claim to recover damages for a personal injury or wrongful death occurring on or after February 1, 2013 to file a certificate of merit along with the complaint. The certificate of merit certifies that the plaintiff or the plaintiff's attorney has consulted with a qualified health care provider, and that the health care provider has described the applicable standard of care and has indicated that there is a reasonable likelihood that the plaintiff will be able to show the defendant failed to meet the standard of care and so caused the plaintiff's injury. The act also allows a potential medical malpractice plaintiff to request that each potential defendant participate in pre-suit mediation and details the mediation process. The provisions relating to pre-suit mediation take effect February 1, 2013 and sunset two years later on February 1, 2015. The act directs the secretary of administration or designee to report by September 1, 2014 regarding the impact of using the certificate of merit and pre-suit mediation. Beginning in 2013, the act also requires hospital community reports to include data from all Vermont hospitals of reportable adverse events, along with analysis and explanation.

Blueprint for Health

The act expands the list of officials with whom the director of the Blueprint for Health must collaborate to include the commissioners of mental health and of disabilities, aging, and independent living and the chair of the GMC board. It adds to the Blueprint executive committee a licensed mental health professional with clinical experience in Vermont and a representative from the Vermont council of developmental and mental health services. The act expresses legislative intent that access to and payments for community health teams should begin at least six months before a medical practice is scheduled to be scored for Blueprint recognition, that the Blueprint director increase payments to medical homes because of new qualification requirements, and that all health plans, including the multistate plans required under the ACA, should participate in the Blueprint for Health.

Prescription drugs

The act prohibits health insurers and pharmacy benefit managers from imposing an annual limit on prescription drug benefits. It requires health plans to limit annual out-of-pocket expenses for prescription drugs, including specialty drugs, to no more for self-only and family coverage than the minimum dollar amounts in effect for self-only and family coverage under a high deductible health plan (HDHP). For prescription drugs offered in conjunction with an HDHP, the act prohibits the plan from covering prescription drugs until the expenditures applicable to the HDHP's deductible have met the amount of the minimum annual deductibles in effect for self-only and family coverage under federal law, at which time coverage for prescription drug benefits will begin and the out-of-pocket limits will apply.

The act adds combination products to the definition of a prescribed product for purposes of Vermont's prescribed product manufacturer gift ban and disclosure laws but expressly excludes prescription eyeglasses, sunglasses, and other eyewear. It exempts samples of medical foods and infant formula from the gift ban and allows free combination products, medical food, and infant formula to be given to free clinics in addition to the items they may already receive. It gives the attorney general's office the same authority to investigate violations of the gift ban and disclosure requirements as under the Consumer Protection Act.

Waivers and updates

The act allows the agency of human services (AHS) to seek federal waivers to serve individuals who are eligible for both Medicare and Medicaid. It allows AHS to seek a new or renewed federal waiver or waivers to implement Medicaid, Choices for Care, and the State Children's Health Insurance Program (SCHIP) under terms and conditions similar to the Global Commitment to Health, including maintaining and expanding the public managed care entity model, obtaining federal matching funds for state Exchange subsidies, and ensuring a streamlined transition between Medicaid and the Exchange. The act also expands the authority of the secretary of AHS to apply to the Secretary of the U.S. Department of Health and Human Services to allow Medicare and Medicaid participation in payment reform activities in addition to the Blueprint for Health.

The act requires the secretary of AHS or designee to provide a waiver update to the committees of jurisdiction by January 30, 2013, with monthly information and updates during the summer and fall of 2012 to the health care oversight committee (HCOC) or to a telephone call of interested stakeholders. It also requires updates at each Medicaid and Exchange advisory committee meeting. The secretary or designee must present a transition plan for individuals enrolled in VHAP, ESIA, and the Catamount Health assistance program to the committees of jurisdiction by January 15, 2013.

The act expresses legislative intent that the transition from Catamount Health and VHAP to the Exchange with subsidies should minimize the financial exposure of low income Vermonters and of the state and ensure sufficient compensation for providers. It expresses intent that the administration not implement a Basic Health Program without legislative approval and that the general assembly continue to oversee the transition after the 2012 legislative session adjourns and during the 2013 legislative session. It also requires DVHA, in consultation with the Medicaid and Exchange advisory committee, to evaluate options for affordable coverage for individuals with incomes in excess of 133 percent of the federal poverty level.

The act allows the committees of jurisdiction to meet when the general assembly is not in session during 2012 to receive updates on health care reform, including waivers, transition planning, health information technology, and Exchange implementation. If AHS receives the results of the federal government's review of Vermont's Exchange implementation plan when the general assembly is not in session, the act requires the administration to present the results to the HCOC and a joint meeting of the committees of jurisdiction; if AHS receives the results when the general assembly is in session, the administration will present the results to the standing committees. By February 1, 2013, the act requires the administration to present to the standing committees the Exchange certification application that AHS submits to the federal government.

Additional provisions

The act requires DFR, in collaboration with the health care ombudsman (HCO) and AHS, to report to the general assembly by January 15, 2013 with recommendations on how best to represent the public interest before the GMC board, recommendations on whether and how to coordinate and/or consolidate the consumer protection activities of DFR, HCO, and AHS, and information about the HCO's current and projected funding needs and recommended funding mechanisms. It amends the preconditions that must be met for Green Mountain Care implementation and requires the joint fiscal office to review the GMC board's determination that the preconditions have been met within 90 days after the GMC board makes its determination.

The act requires the secretary of administration or designee to report to the committees of jurisdiction by January 15, 2013 on strategies for maximizing the number of Vermonters eligible to receive federal premium tax credits and cost-sharing subsidies and for maximizing the amounts they will receive. It allows the Medicaid and Exchange advisory committee to exceed 22 members and adds members representing health insurance agents and brokers. The act specifies that insurers are not required to apply guaranteed issue for nongroup and small group plans offered under current market rules after January 1, 2014, and expresses legislative intent not to impair collective bargaining agreements entered into before January 1, 2013 and in effect on January 1, 2014. It specifies that the act does not prohibit DVHA from allowing Medicare Supplemental policies to be offered on the Exchange web portal in the future after it seeks input from stakeholders. The act also renames the health access oversight committee to be the health care oversight committee, revises its membership, and expands its charge to be oversight of all health care and human services programs when the general assembly is not in session, including mental health, substance abuse, and health care reform.

The act prohibits coaches from allowing a youth athlete to return to a school athletic team practice or game if the coach has reason to believe that the athlete has a concussion or other head injury and prohibits coaches from allowing youth athletes to train or compete again until they have been examined by and received permission from a qualified health care provider.

The act repeals a number of health care-related laws, including VHAP and ESIA, the small group and nongroup health insurance market statutes, and the I-SaveRx program.

Multiple effective dates, beginning May 16, 2012

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