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H0834......................................................by STATE AFFAIRS HEALTH INSURANCE - DEPARTMENT OF ADMINISTRATION - Amends existing law to revise the powers and duties of the Director of the Department of Administration relating to group insurance; to revise objectives and considerations; to provide for data collection and reports; to encourage cost containment; to provide that, after a specified date, all political subdivisions of the state shall contract with the Department of Administration for a plan of group insurance and arrangements with prepayment plans; to provide for governance of group insurance plans; to provide that the Director of the Department of Administration shall render certain services to political subdivisions of the state; and to provide for payments from political subdivisions of the state relating to group insurance. 03/10 House intro - 1st rdg - to printing 03/11 Rpt prt - to Bus
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-seventh Legislature Second Regular Session - 2004 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 834 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO INSURANCE; AMENDING SECTION 67-5761, IDAHO CODE, TO REVISE THE 3 POWERS AND DUTIES OF THE DIRECTOR OF THE DEPARTMENT OF ADMINISTRATION 4 RELATING TO GROUP INSURANCE; AMENDING SECTION 67-5762, IDAHO CODE, TO 5 REVISE OBJECTIVES AND CONSIDERATIONS, TO PROVIDE FOR DATA COLLECTION AND 6 REPORTS, TO ENCOURAGE COST CONTAINMENT AND TO MAKE TECHNICAL CHANGES; 7 AMENDING SECTION 67-5763, IDAHO CODE, TO REVISE DESCRIPTIVE LANGUAGE, TO 8 PROVIDE THAT AFTER A SPECIFIED DATE ALL POLITICAL SUBDIVISIONS OF THE 9 STATE SHALL CONTRACT WITH THE DEPARTMENT OF ADMINISTRATION FOR A PLAN OF 10 GROUP INSURANCE AND ARRANGEMENTS WITH PREPAYMENT PLANS, TO PROVIDE FOR 11 GOVERNANCE OF SUCH PLANS AND TO MAKE A TECHNICAL CORRECTION; AMENDING SEC- 12 TION 67-5767, IDAHO CODE, TO REVISE DESCRIPTIVE LANGUAGE, TO PROVIDE THAT 13 THE DIRECTOR SHALL RENDER CERTAIN SERVICES TO POLITICAL SUBDIVISIONS OF 14 THE STATE AND TO PROVIDE CORRECT TERMINOLOGY; AMENDING SECTION 67-5769, 15 IDAHO CODE, TO PROVIDE FOR PAYMENTS FROM POLITICAL SUBDIVISIONS OF THE 16 STATE RELATING TO GROUP INSURANCE AND TO MAKE TECHNICAL CORRECTIONS; AND 17 PROVIDING AN EFFECTIVE DATE. 18 Be It Enacted by the Legislature of the State of Idaho: 19 SECTION 1. That Section 67-5761, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 67-5761. POWERS AND DUTIES -- GROUP INSURANCE. (1) The director of the 22 department of administration shall have the authority to: 23 (a) Establish an advisory committee to be comprised of program partici- 24 pants. The advisory committee may include employee representatives. The 25 director shall consult with the advisory committee in the performance of 26 those duties as enumerated in subsection (2) of this section. 27 (b) Fix and promulgate rules for determining eligibility of personnel for 28 participation in any group plans. 29 (c) Determine the nature and extent of needs for group life insurance, 30 group annuities, group disability insurance, and group health care service 31 coverages with respect to personnel, including elected or appointed offi- 32 cers and employees, of all offices, departments, divisions, boards, com- 33 missions, institutions, agencies and operations of the government of the 34 state of Idaho and retired personnel, and all school districts, municipal- 35 ities, counties and other political subdivisions of the state, the pre- 36 miums or prepayments for which are payable in whole or in part from funds 37 of the state. "Disability" insurance includes all personal accident, 38 health, hospital, surgical, and medical coverages, and "health care ser- 39 vice" includes all services rendered for maintenance of good health and 40 diagnosis, relief, or treatment of any injury, ailment, or bodily condi- 41 tion. 42 (d) Determine the types, terms, conditions, and amounts of group insur- 43 ance, group annuities, or group coverage by health care service organiza- 2 1 tions, as the case may be, required by such needs. 2 (e) Negotiate and contract for, and have placed or continued in effect 3 all such insurance and coverages as may reasonably be obtainable from 4 insurers and health care service organizations, as the case may be, duly 5 authorized to transact such business in this state. The director may nego- 6 tiate deductibles to any group plan or coverage. Alternatively, the direc- 7 tor may self-insure any insurance or coverage and may contract with any 8 insurance company or third party administrator duly authorized to transact 9 business in this state or administer such plan. 10 (f) Prepare or otherwise obtain and make available to all personnel 11 affected thereby, printed information concerning all such group plans cur- 12 rently in effect, together with the rules governing eligibility, payment 13 of premium or prepayment where applicable, claims procedures, and other 14 matters designed to facilitate utilization and administration of such 15 plans. 16 (g) Administer all such group plans on behalf of the insured, including 17 but not limited to: 18 (i) Enrollment and reporting to the insurer or health care service 19 organization of individuals eligible for coverage and covered under 20 particular policies or contracts, and termination of such enrollment 21 upon termination of eligibility; 22 (ii) Collection or payment of premiums or prepayments for such cov- 23 erage, policies and contracts and accounting for the same; 24 (iii) Establishment of reasonable procedures for handling claims 25 arising under such coverage, policies and contracts, and rendering 26 assistance to claimants, as may be required in the presentation and 27 consideration of claims; 28 (iv) Effectuation of changes in such coverage, policies and con- 29 tracts and renewal or termination thereof; 30 (v) Making and settlement of claims. 31 (2) Nothing herein shall be deemed to prohibit any such coverage, policy 32 or contract providing coverage also for dependents of personnel under terms 33 and conditions formulated and negotiated by the director. The director shall 34 formulate and negotiate a plan of health care service coverage which includes 35 retired personnel and dependents eligible for a retirement benefit through the 36 Idaho public employee retirement system which benefit equals or exceeds the 37 retiree medical insurance premium in effect for that retiree at the date of 38 retirement. Coverage for retired personnel shall parallel the coverage pro- 39 vided to active state employees to the extent necessary, and shall include a 40 medicare credit for retirees who are covered by medicare. Any increased cost 41 on the health care plan for active employees as a result of such coverage 42 costs shall be paid for by the state and by active state employees in equal 43 shares. Retired personnel shall be responsible for paying their own premiums 44 for any plan of health care service insurance coverage provided pursuant to 45 this section. No coverage, policy or contract which provides coverage or bene- 46 fits for personnel, dependents of personnel, or retired personnel shall create 47 any vested right or benefit for the retired personnel in retiree group insur- 48 ance coverages. 49 SECTION 2. That Section 67-5762, Idaho Code, be, and the same is hereby 50 amended to read as follows: 51 67-5762. OBJECTIVES AND CONSIDERATIONS -- DATA COLLECTION -- REPORTS -- 52 COST CONTAINMENT. (1) It shall be the director of the department of 53 administration's objective to procure and maintain on behalf of officers and 3 1 employees the most adequate group coverages reasonably obtainable for the 2 money available for required premiums and prepayments. 3 (2) In the selection of insurers and health care service organizations to 4 provide such coverages, the director shall: 5 (a) G give consideration to factors, other than lowest apparent premium or 6 prepayment, such as risk retention, reserves, extent to which the insurer 7 or organization will facilitate administration, and to its reputation and 8 record for promptness and fairness in the treatment of claims, as well as 9 to its financial dependability; and 10 (b) Require that such coverage include provisions for quality improve- 11 ment, disease prevention, disease management, patient education and cost 12 containment. 13 (3) In cooperation with the department of health and welfare and the 14 department of insurance, the department shall develop and implement policies 15 and procedures for the collection, processing, storage and analysis of clini- 16 cal, financial, quality and restructuring data for the following purposes: 17 (a) To use, build and improve upon and coordinate existing data sources 18 and measurement efforts through the integration of data systems and stan- 19 dardization concepts; 20 (b) To coordinate the development of a linked public and private sector 21 information system; 22 (c) To emphasize data that is useful, relevant and not duplicative of 23 existing data; 24 (d) To minimize the burden on those providing data; and 25 (e) To preserve the reliability, accuracy and integrity of collected data 26 while ensuring that the data is available in the public domain. 27 (4) The department shall produce clearly labeled and easy-to-understand 28 reports as set forth in paragraphs (a) through (d) of this subsection. Unless 29 otherwise specified, the department shall distribute the reports on a publicly 30 accessible site on the internet or via mail or e-mail, through the creation of 31 a list of interested parties. The department shall publish a notice of the 32 availability of these reports at least once per year in the three (3) daily 33 newspapers of the greatest general circulation published in the state. The 34 department shall make reports available to members of the public upon request. 35 (a) Quality. At a minimum, the department shall develop and produce 36 annual quality reports. 37 (b) Price. At a minimum, the department shall develop and produce annual 38 reports on prices charged for the twenty (20) most common services, 39 excluding emergency services, provided by health care facilities and 40 health care practitioners. For health care facilities, the reports shall 41 include, but are not limited to, the average price charged per service per 42 facility and the total number of services per facility. 43 (c) Comparison report. At a minimum, the department shall develop and 44 produce an annual report that compares the twenty (20) most common 45 diagnosis-related groups and the twenty (20) most common outpatient proce- 46 dures for all hospitals in the state and the twenty (20) most common pro- 47 cedures for nonhospital health care facilities in the state to similar 48 data for medical care rendered in other states, when such data are avail- 49 able. 50 (d) Physician services. The department shall provide an annual report of 51 the ten (10) services and procedures most often provided by osteopathic 52 and allopathic physicians in the private office setting in this state. The 53 department shall distribute this report to all physician practices in the 54 state. The first report shall be produced by July 1, 2005. 55 (5) Cost containment. 4 1 (a) Each health care practitioner in this state offering services pursu- 2 ant to a plan as set forth in this chapter may voluntarily limit the 3 growth of net revenue of the practitioner's practice to three percent (3%) 4 for the fiscal year beginning July 1, 2006, and ending June 30, 2007. 5 (b) Each hospital offering services pursuant to a plan as set forth in 6 this chapter may voluntarily restrain cost increases, measured as expenses 7 per case mix adjusted discharge, to no more than three and five-tenths 8 percent (3.5%) for the fiscal year beginning July 1, 2006, and ending June 9 30, 2007. Each hospital is asked to voluntarily hold hospital consolidated 10 operating margins to no more than three percent (3%) for the fiscal year 11 beginning July 1, 2006, and ending June 30, 2007. 12 (c) Each health insurance carrier in this state offering a plan as set 13 forth in this chapter may voluntarily limit the pricing of products it 14 sells in this state to the level that supports no more than three percent 15 (3%) underwriting gain less federal taxes for the fiscal year. 16 SECTION 3. That Section 67-5763, Idaho Code, be, and the same is hereby 17 amended to read as follows: 18 67-5763. GOVERNMENTAL BODY AUTHORIZED TO MAKE CONTRACTS FORGROUP INSUR- 19 ANCE FOR OFFICERS AND EMPLOYEESGOVERNMENTAL BODIES -- GOVERNANCE. Any(1) On 20 and after July 1, 2006, every school district, municipality, county, orand 21 the state of Idaho, orand every other political subdivision of the state of 22 Idaho, is hereby authorized to make contractsshall contract with the depart- 23 ment of administration for a plan of group insurance and arrangements with 24 prepayment plans, insuring and covering life, health, hospitalization, medical 25 and surgical service and expense, accident insurance, contracts of annuities 26 and pensions, or any one (1) or more of such forms of insurance, annuities, 27 pensions, or prepayment plans of coverage for the benefit of its elected or 28 appointed officers and employees including life, hospitalization, medical and 29 surgical expense insurance or prepayment plan coverage for dependents of such 30 officers and employees. 31 (2) The governance of such a group insurance plan shall be determined by 32 the director of the department of administration and representatives from the 33 school districts, municipalities, counties and other political subdivisions of 34 the state, provided that plan enrollees and experts in health care delivery 35 and cost containment may be consulted in such determinations. 36 SECTION 4. That Section 67-5767, Idaho Code, be, and the same is hereby 37 amended to read as follows: 38 67-5767. DIRECTOR MAYSHALL PROVIDE SERVICE TO SCHOOL DISTRICTS AND OTHER 39 POLITICAL SUBDIVISIONS. (1) Under terms and procedures mutually agreed upon by 40 contract, the director of the department of administration mayshall render 41 the same services with respect to personnel of any school district or other 42 political subdivision of the state of Idaho. The cost of any group insurance, 43 group annuity or health care service coverage so provided and of administra- 44 tion thereof shall be borne by the school district or political subdivision. 45 (2) Governmental entity for the purpose of this section means any organi- 46 zation composed of units of government of Idaho or organizations funded only 47 by government or government employee contributions or organizations who dis- 48 charge governmental responsibilities that would otherwise be performed by gov- 49 ernment. All government entities are deemed to be political subdivisions for 50 the purpose of this actchapter. 5 1 SECTION 5. That Section 67-5769, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 67-5769. INTER-DEPARTMENTAL TRANSACTIONS -- ADMINISTRATIVE CONTRIBUTION 4 -- AMOUNTS -- LIMITS -- REFUNDS -- APPROPRIATION. (1) The director of the 5 department of administration shall charge each office, department, division, 6 board, commission, institution, agency, andoperation, school district, munic- 7 ipality, county and other political subdivision of the state, personnel of 8 which is currently covered under one (1) or more group plans administered by 9 the director, and receive payment in advance for its properly apportioned 10 share of the cost thereof. To the amount otherwise so found due for payment of 11 premiums and prepayments for coverages, the director shall add a separately 12 stated administrative contribution of such percentage, rate, or proportionate 13 amount as may reasonably be required to pay the costs of maintaining the 14 office of group insurance, including personnel costs, operating expenditures, 15 and expenditures for capital outlay items. The director shall allocate the 16 apportioned share of the reasonable costs of administering this actchapter to 17 each participating state unit in the same proportion that the amount of 18 employees of the unit, excluding temporary or part time, bears to the total 19 number of employees, excluding temporary or part time, of all combined units 20 covered by this actchapter. 21 (2) As to a particular office, department, division, board, commission, 22 institution, agency, oroperation, school district, municipality, county or 23 other political subdivision of this state, such charges and payments shall not 24 exceed the sum of (a) appropriated funds currently available for the purpose, 25 and (b) amounts currently deducted from the salaries and other compensation of 26 covered personnel specifically for the insurance or coverage. On or before the 27 first day of August of each year, the director shall furnish each department 28 with an estimate of the cost of insurance or coverage for the upcoming fiscal 29 year. 30 (3) Refunds on premiums or prepayments, profit sharing, experience sav- 31 ings and refunds and other contract returns received by the director on 32 account of group policies and group contracts shall be retained by the direc- 33 tor and used for application upon future premiums and prepayments as equitably 34 apportioned by the director. 35 (4) Moneys received by the director under this section shall be deposited 36 to the credit of the group insurance account in the agency asset fund, and are 37 hereby continually appropriated for the uses for which charged and received, 38 or as stated in subsection (3) of this section. Pending such use, such surplus 39 moneys shall be invested by the state treasurer in the same manner as provided 40 for under section 67-1210, Idaho Code, with respect to other idle moneys in 41 the state treasury. All interest or other yield on such investments shall be 42 credited to the respective group insurance account. 43 SECTION 6. This act shall be in full force and effect on and after July 44 1, 2006.
STATEMENT OF PURPOSE RS 14237 This legislation will combine state employee, school districts, municipalities and counties into one health plan. It also establishes the governance of this health plan, requires that the health plan coverage addresses quality improvement, disease prevention, disease management, patient education and cost containment. It will also provide for data collection and analysis. Reporting of the quality, price and health services provided to plan members will also be required. FISCAL IMPACT The cost of the additional members will be born by the respective governmental entities. There may be additional cost for data collection and analysis. Contact Name: Representative Henbest Phone: 332-1000 Name: Representative Jaquet phone: 332-1000 STATEMENT OF PURPOSE/FISCAL NOTE H 834