HOUSE PASSES SMALL BUSINESS HEALTH CARE BILL-July 23, 2010
LAWRENCE- State Representative David Torrisi (D-North Andover), Representative Barry Finegold (D-Andover), and Representative Marcos Devers (D-Lawrence) joined colleagues in the House of Representatives yesterday in passing legislation designed to control health care costs for small businesses in Massachusetts.
The legislation requires health insurance carriers to submit rate filings to the Department of Insurance (DOI) at least ninety days before the effective date with sufficient detail so that the DOI may approve of the rates, or disapprove if the rates are found excessive or unreasonable in relation to the benefits provided. The rate will be presumptively disapproved if a carrier submits a rate filing requesting an increase over 150 percent of the prior calendar year’s percentage increase in the consumer price index for medical care services. The bill authorizes the Division of Health Care Finance and Policy (DHCFP) to review contracts for medical services between insurers and hospitals, physician group practices, and imaging service providers to determine if payment increases are appropriate. Furthermore, the bill allows the Commissioner of Insurance to address instances of rate fluctuation by annually smoothing rate adjustments to prevent drastic increases in rates for individuals and employers.
The bill also establishes a Disproportionate Share Hospital Trust Fund to aid hospitals that serve a significant number of patients who are uninsured or insured through Medicaid. The legislation authorizes the DHCFP to assess fifty percent of the savings in provider rates of reimbursement for deposit in the Trust Fund. The remaining fifty percent of the savings in provider rates of reimbursement will be incorporated in premium savings to employers.
“Lawrence General Hospital serves a significant number of patients on Medicare and Medicaid, and consistently low reimbursement rates for quality care puts the hospital at an economic disadvantage. This bill will improve the financial strength of the institution, allowing for the continuation of superior service,” stated Representative Torrisi.
“Among other things, this legislation will ensure that Lawrence General Hospital will be able to secure lower insurance rates equal to those of larger hospitals,” said Representative Barry Finegold (D-Andover). “This will make it possible for LGH to provide their excellent standard of health care at a lower cost to our community.”
“I applaud the House and our local legislative leadership for advancing more fair and equitable rates for high quality, high value providers like Lawrence General Hospital, and for setting aside some of the savings for providers like us,” stated Dianne J. Anderson, President and Chief Executive Officer of Lawrence General Hospital.
Additionally, the bill allows small businesses and non-profits with less than 50 employees to pool together for the purpose of purchasing health insurance for employees. Such an initiative will provide relief to small businesses by increasing competition amongst insurers and ultimately lowering the cost of coverage.
“Passage of this bill will benefit the mom-and-pops and other hard-working institutions in our community that drive our state’s economy, and that have been crippled by the high cost of insurance premiums,” said Torrisi.
The legislation also adds small business representation to the Health Care Quality and Cost Council, which is required to develop annual cost containment goals to promote affordable, high quality, patient-centered health care across the state.
Finally, in order to cut costs to consumers, the legislation allows patients access to prescription drug discounts.
The Senate passed a version of the bill in May. The two versions must now be reconciled by a conference committee before the end of the legislative session on July 31.
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