An Act To Provide Affordable Health Insurance to Small Businesses and Individuals and To Control Health Care Costs Reference to the Joint Select Committee on Health Care Reform suggested and ordered printed. !r/~ frJ· 7lldi:~
Maine Legislature, Session 121, LD 1611
Committee: Health Care Reform
Sponsors: O'NEIL, TREAT, COLWELL, DAVIS, MILLS, RICHARDSON, DAGGETT, GAGNON, MAYO, TURNER
Amends: 5 MRSA §285, 5 MRSA §1547, 5 MRSA §12004-I, 24-A MRSA §6952, 22 MRSA §3174-G, 22 MRSA §3174-D, 5 MRSA §12004, 2 MRSA §102, 22 MRSA §253, 22 MRSA §1709, 22 MRSA §328, 22 MRSA §335, 22 MRSA §338, 22 MRSA §1718, 22 MRSA §1890, 22 MRSA §8702, 22 MRSA §8703, 22 MRSA §8704, 22 MRSA §8707, 22 MRSA §8708, 22 MRSA §8711, 22 MRSA §8712, 24 MRSA §2327, 24 MRSA §2332-E, 24-A MRSA §2436, 24-A MRSA §2736-C, 24-A MRSA §2, 24-A MRSA §2839, 24-A MRSA §2839-B, 24-A MRSA §4207, 32 MRSA §2599, 32 MRSA §3299

Legislative Document 
No. 1611 
H.P. 1187 
House of Representatives, May 12, 2003 
An Act To Provide Affordable Health Insurance to Small Businesses 
and Individuals and To Control Health Care Costs 
Reference to the Joint Select Committee on Health Care Reform suggested and ordered 
printed. 
!r/~ 
frJ· 7lldi:~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative O'NEIL of Saco. (GOVERNOR'S BILL) 
Cosponsored by Senator TREAT of Kennebec and 
Representatives: Speaker COLWELL of Gardiner, DAVIS of Falmouth, MILLS of Cornville, 
RICHARDSON of Brunswick, Senators: President DAGGETT of Kennebec, GAGNON of 
Kennebec, MAYO of Sagadahoc, TURNER of Cumberland. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 5 MRS A §285, sub-§I, 111, as amended by PL 2001, c. 
667, Pt. E, §2, is further amended to read: 
I. 
Any 
licensed 
foster 
parent 
caring 
for 
a 
child or 
children in the foster parent's residence whose care is 
reimbursed through the Department of Human Services for the 
period during which the child or children are in that foster 
parent's care; aBe 
Sec. A-2. 5 MRSA §285, sub-§l, ~J, as enacted by PL 2001, c. 
667, Pt. E, §3, is amended to read: 
J. 
Legislative employees that are recipients of retirement 
allowances from the Maine State Retirement System based upon 
creditable service as teachers, as defined by section 17001, 
subsection 42T~ 
Sec. A-3. 5 MRSA §285, sub-§l, ~K is enacted to read: 
K. 
Any employee of Dirigo Health, as established in Title 
24-A, chapter 87. 
Sec. A-4. 5 MRSA §1547, sub-§3, as enacted by PL 1999, c. 731, 
Pt. RRR, §l, is amended to read: 
3. 
Component units. 
Component units of the State include, 
but are not limited to, the following organizations: 
the Loring 
Development Authority of Maine; the Finance Authority of Maine; 
the Maine Educational Loan Authority; the Maine Municipal Bond 
Bank; the Maine Health and Higher Education Facilities Authority; 
the Maine Governmental Facilities Authority; the Maine Maritime 
Academy; 
the Maine State Housing Authority; 
the University of 
Maine 
System; 
the 
Maine 
~eeABiea± Community 
College 
System; 
Dirigo Health: and the Maine State Retirement System. 
The State 
Controller may identify additional component units in accordance 
with standards established by a governmental accounting standards 
board. 
Sec. A-5. 5 MRS A §12004-G, sub-§14-n is enacted to read: 
14-D. 
Health Care 
Board of 
Directors 
of Dirigo 
Health 
$100 
24-A MRSA 
per diem 
§6907 
and expenses 
Sec. A-6. 5 MRSA §12004-I, sub-§31-A is enacted to read: 
Page l-LR2l37 (1) 
31-A. 
Health Care 
Maine 
Quality 
f'MJ.m! 
Advisory 
Council 
Expenses 
Qnly 
24-A MRSA 
§6952 
Sec. A-7. 22 MRSA §3174-G, sub-§l, as amended by PL 2001, c. 
450, Pt. A, §§1 and 2, is amended to read: 
1. 
Delivery 
the delivery of 
following persons: 
of services. 
The department shall provide for 
federally approved Medicaid services to 
the 
A. A qualified woman during her pregnancy and up to 60 days 
following delivery when the woman's family income is equal 
to or below 200% of the nonfarm income official poverty 
line; 
B. 
An infant under one year of age when the infant's family 
income is equal to or below 189% 200% of the nonfarm income 
official poverty line; 
C. 
A qualified elderly or disabled person when 
family income is equal to or below 100% of 
income official poverty line; 
the person's 
the nonfarm 
D. 
A child one year of age or older and under 19 years of 
age when the child's family income is equal to or below 199% 
200% of the nonfarm income official poverty line; 
E. 
The parent or caretaker relative of a child described in 
paragraph B or D when the child's family income is equal to 
or below 199% 200% of the nonfarm income official poverty 
line, subject to adjustment by the commissioner under this 
paragraph. 
Medicaid servicps provided under this paragraph 
must be provided within the limits of the program budget. 
Funds appropriated for services under this paragraph must 
include an annual inflationary adjustment equivalent to the 
rate of inflation in the Medicaid program. 
On a quarterly 
basis, the commissioner shall determine the fiscal status of 
program 
expenditures 
under 
this 
paragraph. 
If 
the 
commissioner determines that expenditures will exceed the 
funds available to provide Medicaid coverage pursuant to 
this paragraph, 
the 
commissioner 
must adjust the 
income 
eligibility limit for new applicants to the extent necessary 
to operate the program within the program budget. 
If, after 
an 
adjustment 
has 
occurred pursuant 
to 
this 
paragraph, 
expenditures fall below the program budget, the commissioner 
must 
raise 
the 
income 
eligibility limit 
to 
the 
extent 
necessary to provide services to as many eligible persons as 
possible 
within 
the 
fiscal 
constraints 
of 
the 
program 
budget, as long as the income limit does not exceed 1§9% 
20~ of the nonfarm income official poverty line; and 
F. 
A person 20 to 64 years of age who is not otherwise 
covered under paragraphs A to E when the person's family 
income is below or equal to 199% 125'l-o of the nonfarm income 
official poverty lineT-~~~B€B-~~--~-e9mmi&&i9~~-6Rall 
aQjas~-~£€-~~~~~~&~~~~y-leyel-~£-~~-w~~a-~Re 
~e~ai~emeB~s-e~-~Re-pa~a~~apR. 
f1}--~~,-eB-~~--lT-~~-aBQ-~~1~-~Re~ea~~e~T 
eHpeBQi~a~es--~e~--~~-~1~~~-~~~--iB--~Ri6 
pa~a~FapR-~~~~~-aB~ieipa~eG-~e-~~~-~~-~Re 
p~e~~am--~~---~--eemmissieRe~--~~---~b&&--~Re 
maHimam-~~~~~~it~-level-~~-~~-e~~eB~-~~-~e 
p~eyiQe-~~~~-~-a6-~-peF&9R&-W~~£--~-eelew 
16§%-~~-~£€--B9BfaFm-~~-eff4€4al--~¥e~~y-~~~-as 
pessiele-~~~~~-~~-t46€al--e9B&~~aiB~&-~~-~£~-MaiBe 
Weal~R-Aeee6s-~aRQ-Qese~ieeQ-iR-6ee~ieR-6e9T 
t6}--~~--~ae-maH4mam-~1~~i~~~~~-leyel-~£-~~~-aeeye 
199%-~--~Re-~~~-leyel-~~-~e-~~i~-pa~a~~apR 
aBQ----saese~aeB~ly----~Re----eemmi66ieRe~----~ea6eRaely 
aB~ieipa~es--~he-~&~-~~-~~-~~~-~~--eH€eeQ--~Re 
eaQ~e~-~--~he-~~~~~~-~&&~~-4R-~~~-pa~a~~apRT 
~Re-~~~~-££~~--leweF-~~-~~~-eli~ieili~y 
leyel-~e-~£€-~~~-~~~~~~~-&9¥e~~-~9-a6 
maBy-peFseBs-as-pessiele-wi~hiB-~he-pFe~~am-eaQ~e~T 
t6}---~ae-~~~--££~1~--~iye-~~-~~--~~--Qay6~ 
Be~iee-~--~he-~~-~~-iB-~~~-eli~ieili~y 
leyel--~~--~~--3e4R~---&~aBGi~--~it~~--~---~he 
be~isla~aFe-h~v~R~--~~~~~~~--app~p~~a~~B&-aBQ 
fiRaReial-~~~~~-aBG-~£~-~~-6~aRQ4R~-~it~~-ef 
~Re--b~i&~a~a~e-~~~--}ur~~i~~~-~~--heal~h--aBQ 
RamaB-SeFYiees-ma~~eF6T 
t4}---~he-~~Eme&~-~~-~~-~tt€~~£~--€eve£a~e--6 
meB~R6-af~e~-~~~£~£~-~~-~-~-wa~¥e~-9f-eeye~a~e 
~Fem-~~~~~&eG-~~a~e6-~~~-9f-R€~~~£-~-WamaR 
Se~Yiees-eF-eR-Qe~eee~-lT-6996T-wRieReye~-i6-1a~e~T 
For the purposes of this subsection, the "nonfarm income official 
poverty 
line" 
is that applicable 
to 
a 
family 
of 
the 
size 
involved, 
as defined by the federal Department of Health and 
Human Services and updated annually in the Federal Register under 
authority 
of 
United 
States 
Code, 
Section 
9902(2). 
For 
purposes of this subsection, "program budget" means the amounts 
available 
from 
both 
federal 
and 
state 
sources 
to 
provide 
federally approved Medicaid services. 
Sec. A-8. 22 MRSA §3174-DD is enacted to read: 
§3174-DD. 
Dirigo Health Plan 
The 
department 
may 
contract 
with 
one 
or 
more 
health 
insurance 
carriers 
to 
purchase 
Dirigo 
Health 
Insurance 
for 
MaineCare members 
who 
seek to enroll through their employers 
pursuant to Title 24-A, chapter 87. The insurance received by the 
MaineCare member must be the same as the insurance offered to 
other employees in the MaineCare member's group, except that only 
nominal cost-sharing. 
as permitted by 
United States Code, 
Section 1396(0) (2003) may be reguired of MaineCare members. 
The 
department shall continue to provide MaineCare members services 
covered by MaineCare that are not covered by the member's Dirigo 
Health Insurance. 
Sec. A-9. 24-A MRSA c. 87 is enacted to read: 
CHAPTER 87 
DIRIGQ HEALTH 
SUBCHAPTER I 
GENERAL PROVISIONS 
§6901. 
Short title 
This chapter may be known and cited as "the Dirigo Health 
§6902. 
Declaration of necessity 
Dirigo Health is established to arrange for the provision of 
comprehensive, 
affordable 
health 
care 
coverage 
to 
small 
employers, 
including 
the 
self-employed, 
their 
employees 
and 
dependents, as well as individuals on a voluntary basis. 
Dirigo 
Health is also 
responsible for monitoring and 
improving the 
quality of health care in this State. 
§6903. 
Dirigo Health 
Dirigo Health is established as a body corporate and politic 
and a public instrumentality of the State, and the exercise by 
Dirigo Health of the powers conferred by this chapter must be 
deemed and held to be the performance of essential governmental 
functions. 
§6904. 
Liberal construction of chapter 
This chapter. being necessary for the welfare of the State 
and its inhabitants. must be liberally construed. 
In the event 
of any conflict between this chapter and any other law. 
this 
chapter prevails. but the power and authority granted under this 
~ter must be considered to be in addition to and not in 
derogation of power and authority granted by any other law. 
§6905. 
Tax exemptions 
The 
ownership of all property by Dirigo Health and the 
issuance of bonds and notes under this chapter are deemed to 
constitute essential public and governmental purposes. 
and the 
property and the bonds and notes so issued. their transfer and 
the income from those bonds and notes. including any profits made 
on the sale of the bonds or notes. are at all times exempt from 
taxation within the State. 
§6906. 
Definitio~ 
As 
used in this 
chapter. 
unless 
the 
context 
otherwise 
jndicates. the following terms have the following meanings. 
1. 
Board. 
"Board" means the Board of Directors of Dirigo 
Health. as established in section 6907. 
2. 
Dependent. 
"Dependent" 
means 
a 
spouse 
or 
unmarried 
child under 19 years of age who resides with a plan enrollee or a 
child 
who 
is 
a 
student 
under 
years 
of 
age 
and 
who 
is 
financially dependent upon a plan enrollee or a person of any age 
who is the child of a 
plan enrollee and who is disabled and 
dependent upon that plan enrollee. 
3. 
Dirigo Health 
Insurance. 
"Dirigo 
Health 
Insurance" 
means the health insurance product established by Dirigo Health 
that is offered by a private health insurance carrier or carriers. 
4. 
Eligible business. 
"Eligible business" means a business 
that employs at least 2 but not more than 50 eligible employees. 
the majority of whom are employed in the State. 
After one year of operation of Dirigo 
rule. 
define "eligible business" to 
private employers. 
Health. the board may. by 
include larger public or 
5. 
Eligible 
employee. 
"Eligible 
employee" 
means 
an 
employee of an eligible business who works at least 15 hours per 
week for that eligible business. 
6. 
Eligible individual. 
"Eligible individual" means: 
A. 
A self-employed individual who: 
(1) 
Works and resides in the State; and 
(2) 
Is organized as a sole proprietorship or in any 
other 
legally 
recognized 
manner 
in 
which 
a 
self-employed individual may organize, 
a 
substantial 
part of whose income derives from a trade or business 
through which the individual has 
attempted to earn 
taxable income; 
B. 
An unemployed individual who resides in this State; or 
C. 
An individual employed in an eligible business that does 
not offer health insurance. 
7. 
Employer. 
"Employer" means 
the owner or responsible 
agent of a business authorized to sign contracts on behalf of the 
business. 
8. 
Executive director. 
"Executive director" 
means 
the 
Executive Director of Dirigo Health. 
9. 
Healtb insurance carrier. 
"Health insurance carrier" 
means: 
A. 
An insurance company licensed in accordance with this 
Title to provide health insurance; 
B. 
A health maintenance organization licensed pursuant to 
chapter 56; 
C. 
A 
preferred 
provide~ 
arrangement 
administrator 
registered pursuant to chapter 32; or 
D. 
A nonprofit hospital or medical service organization or 
health plan licensed pursuant to Title 24. 
10. 
Healtb plan in Medicaid. 
"Health plan in Medicaid" 
means a health insurance carrier that meets the reguirements of 
Code 
of 
Federal Regulations, 
Part 
(2002) 
and has 
a 
contract 
with 
the 
Department 
of 
Human 
Services 
to 
provide 
MaineCare-covered services to individuals enrolled in MaineCare. 
11. 
Participating employer. "Participating employer" means 
£n eligible business whose employees are plan enrollees in Dirigo 
Health Insurance. 
12. 
Plan enrollee. 
"Plan enrollee" 
means 
an 
eligible 
individual or eligible employee 
who enrolls in Dirigo Health 
Insurance through Dirigo Health. 
"Plan enrollee" includes an 
eligible employee who is eligible to enroll in MaineCare. 
.l.1....... 
Provider. 
"Provider" means any person, organization, 
corporation or association that provides health care services and 
products and is authorized to provide those services and products 
under the laws of this State. 
14. 
Reinsurance 
or 
reinsurer. 
"Reinsurance" 
and 
"reinsurer" have the same meanings as in section 741. 
15. 
Resident. 
"Resident" means 
a 
person who is legally 
domiciled in this State and has been for at least 60 days and has 
a Maine driver's license, is registered to vote in this State or 
meets other criteria established by Dirigo Health. 
16. 
Subsidy. 
"Subsidy" means 
a 
subsidy as described in 
section 6918. 
17. 
Third-party administrator. 
"Third-party administrator" 
means any person who, on behalf of any person who establishes a 
health insurance plan covering residents, receives or collects 
charges, 
contributions or 
premiums 
for 
or settles claims 
on 
residents in connection with any type of health benefit provided 
in or as an alternative to insurance as defined by section 704, 
other than any person listed in section 1901, 
subsection 1, 
paragraphs A to O. 
18. 
Unemployed individual. 
"Unemployed individual" means 
an individual who does not work more than 15 hours a week for any 
single employer. 
§6907. 
Board of Directors of Dirigo Health 
1. 
Establishment; appointments. 
The Board of Directors of 
Dirigo Health is established and comprises 5 voting members and 3 
ex officio, nonvoting members. 
A. 
The 5 voting members of the board must be appointed by 
the 
Governor, 
subject 
to 
review 
by 
the 
joint 
standing 
committee of the Legislature having jurisdiction over health 
insurance matters and confirmation by the Senate. 
B. 
Ex officio, nonvoting members of the board must include: 
(1) 
The 
Commissioner of Professional 
and Financial 
Regulation or the commissioner's designee; 
(2) 
The director of the Governor's Office of Health 
Policy and Finance or the director of 
a 
successor 
agency; and 
The Commissioner of Administratiye and Financial 
Services or the commissioner's designee. 
2. 
Qualifications of voting members. 
Voting members of the 
board: 
A. 
Must have knowledge and experience in one or more of the 
following areas: 
(1) 
Health care purchasing; 
(2) 
Health insurance; 
(3) 
MaineCare; 
(4) 
Health policy and law; 
(5) 
State management and budget; or 
(6) 
Health care financing; and 
B. 
May not be: 
(1) 
A 
representative 
or 
employee 
of 
an 
insurance 
carrier; 
(2) 
A representative or employee of a health care 
provider; or 
(3) 
Affiliated 
with 
d 
health 
or 
health-related 
organization regulated by State Government. 
3. 
Terms of office. 
Voting members serve 3-year terms. 
Voting members may serve up to 
consecutive terms. 
Of the 
ini tial appointees, one serves an initial term of one year, 
serve initial terms of 2 years and 2 serve initial terms of 3 
years. 
The Governor shall fill any vacancy for an unexpired term 
in accordance with subsections 1 and 2. 
Members reaching the end 
of their terms may serve until replacements are named. 
4. 
Chair. 
The Governor shall appoint one of the voting 
members as the chair of the board. 
5. 
Quorum. 
Three voting members of the board constitute a 
quorum. 
6. 
Affirmative vote. 
An affirmative vote of 3 members is 
required for any action taken by the board. 
7. 
Compensation. 
A member of the board must be compensated 
according 
to 
the 
prov~s~ons of 
Title 
5, 
section 
12004-G, 
subsection 14-D: a member must receive compensation whenever that 
member fulfills any board duties in accordance with board bylaws. 
8. 
Meetings. 
The board shall meet at least 4 times a year 
at regular intervals. 
It may also meet at other times at the 
call of the chair or the executive director. 
§6908. 
Limitation on liability 
A member of the board or an employee of Dirigo Health is not 
subject to any personal liability for having acted within the 
course and scope of membership or employment to carry out any 
power or duty under this chapter. 
Dirigo Health shall indemnify 
any member of the board and any employee of Dirigo Health against 
~penses actually and necessarily incurred by that member 
or 
employee 
in 
connection 
with 
the 
defense 
of 
any 
action 
or 
proceeding in which that member ~r employee is made a party by 
reason of past or present authority with Dirigo Health. 
§6909. 
Prohibited interests of officers. directors and employees 
Officers, directors or employees of Dirigo Health or their 
spouses or dependent children may not receive any direct personal 
benefit from the activities of Dirigo Health in assisting any 
private entity, except that they may participate in Dirigo Health 
Insurance on the same terms as others may under this chapter. 
This section does not prohibit corporations or other entities 
with which officers or directors are associated by reason of 
ownership 
or 
employment 
from 
participating in activities 
of 
Dirigo Health or receiving services offered by Dirigo Health as 
long as the ownership or employment is made known to the board 
and, if applicable, the officers or directors abstain from voting 
on matters relating to that participation. 
§6910. 
Donations to State 
The 
State, 
through 
the 
Governor, 
may 
accept 
donations, 
bequests, devises, grants or other interests of any nature on 
behalf of Dirigo Health and transfer those funds, property or 
other interests to Dirigo Health. 
§69l1. 
Confidential records 
Except 
as 
provided in subsections 
and 
2, 
information 
obtained by Dirigo Health under this chapter is a public record 
as provided by Title 1, chapter 13, subchapter 1. 
1. 
Financial 
information. 
Any 
personally 
identifiable 
financial 
information, 
supporting data or tax 
return of 
any 
person 
obtained 
by 
Dirigo 
Health 
under 
this 
chapter 
is 
confidential and not open to public inspection. 
2. 
Health 
information. 
Health 
information obtained 
by 
Dirigo Health under this chapter that is covered by the federal 
Health Insurance Portability and Accountability Act of 
1996, 
Public Law 104-191, 
Stat. 
1936 or information covered by 
chapter 24 or Title 22, section 1711-C is confidential and not 
open to public inspection. 
§69l2. 
Powers and duties of Dirigo Health 
1. 
Powers. 
Subject to any limitations contained in this 
chapter or in any other law, Dirigo Health may: 
A. 
Take any legal actions necessary or proper to recover or 
collect assessments due Dirigo Health or that are necessary 
for the proper administration of Dirigo Health: 
B. 
Make 
and alter 
bylaws, 
not 
inconsistent with this 
chapter 
or 
with 
the 
laws 
of 
this 
State, 
for 
the 
administration and regulation of the activities of Dirigo 
Health: 
C. 
Borrow money or otherwise obtain credit in its own name; 
D. 
Have and exercise all powers necessary or convenient to 
effect the purposes for which Dirigo Health is organized, or 
to 
further 
the 
activities 
in 
which 
Dirigo 
Health 
may 
lawfully be engaged, including the establishment of Dirigo 
Health Insurance: 
E. 
Engage 
in legislative liaison activities, 
including 
gathering information regarding legislation, analyzing the 
effect of legislation, 
communicating with Legislators and 
attending 
and 
g~v~ng testimony at legislative 
sessions, 
public hearings or committee hearings: 
F. 
Take any legal actions necessary to avoid the payment of 
improper 
claims 
against 
Dirigo 
Health 
or 
the 
coverage 
provided by or through Dirigo Health, to recover any amounts 
erroneously or improperly paid by Dirigo Health, to recover 
any amounts paid by Dirigo Health as a result of mistake of 
fact or law and to recover other amounts due Dirigo Health; 
G. 
Enter into contracts with g:ualified 3rd parties both 
private and public for any service necessary to carry out 
the purposes of this chapter; 
H. 
Conduct studies and analyses related to the provision of 
health care, health care costs and g:uality, 
and matters 
Dirigo Health considers appropriate; 
I. 
Establish and administer a revolving loan fund to assist 
providers in the purchase of hardware and software necessary 
to 
implement the 
prov~s~ons of section 2436, 
subsection 
2-A. 
Dirigo Health shall solicit matching contributions to 
the fund from each health insurer licensed to do business in 
this State; 
J. 
Apply for and receive funds or grants from public and 
private sources; and 
K. 
In accordance with the limitations and restrictions of 
this chapter, 
cause 
any of its powers or duties to be 
carried out by one or more nonprofit organizations exempt 
from taxation under the United States Internal Revenue Code 
and organized, created or operated under the laws of this 
State. 
2. 
Duties. 
Dirigo Health shall: 
A. 
Establish administrative and accounting procedures for 
the operation of Dirigo Health; 
B. 
Collect the recovery payments provided in section 6920; 
C. 
Develop the specifications for Dir igo Health Insurance 
in accordance with the provisions in section 6916; 
D. 
Develop 
and 
implement 
a 
program 
to 
publicize 
the 
existence of Dirigo Health and Dirigo Health Insurance, the 
eligibility reg:uirements and the enrollment procedures for 
Dirigo Health Insurance and to maintain public awareness of 
Dirigo Health and Dirigo Health Insurance; 
E. 
Arrange the provision of Dirigo Health Insurance benefit 
coverage 
to eligible 
individuals 
and eligible 
employees 
through contracts with one or more g:ualified bidders; and 
F. 
Establish 
and 
operate 
the 
Maine 
Quality 
Forum 
in 
accordance with the provisions of section 6951. 
3. 
Audit. 
Dirigo Health must be audited by the State 
Auditor at least every 3 years. 
A copy of the audit must be 
provided 
to 
the 
superintendent 
and 
to 
the 
joint 
standing 
committees of the Legislature having jurisdiction over health 
insurance matters and health and human services matters. 
4. 
Rulemaking. 
Dirigo Health may adopt. amend and repeal 
rules as necessary for the proper administration and enforcement 
of this chapter, pursuant to the Maine Administrative Procedure 
Act. 
Unless otherwise specified, rules adopted pursuant to this 
chapter are 
routine technical 
rules 
as 
defined in Title 5, 
chapter 375, subchapter 2-A. 
5. 
Technical assistance from state agencies. 
Agencies of 
State Government shall provide technical assistance and expertise 
to Dirigo Health. 
6. 
Coordination with federaL state and local health care 
systems. 
Dirigo Health shall institute a system to coordinate 
the activities of Dirigo Health with the health care programs of 
the Federal Government and state and municipal governments. 
7. 
Advisory committees. 
Dirigo Health may appoint advisory 
committees to advise and assist Dirigo Health. 
Members of an 
advisory 
committee 
serve 
without 
compensation 
but 
may 
be 
reimbursed by Dirigo Health for 
necessary expenses while 
on 
official business of the committee. 
§69l3. 
Specific powers and duties of board 
1. 
Powers of board. 
The board may reguest and the governor 
if reguested shall provide staffing assistance for Dirigo Health 
in the initial phases its operation. 
2. 
Duties of board. 
The board of directors shall: 
A. 
Appoint the executive director and fix the executive 
director's duties and compensation: 
B. 
Provide 
general 
oversight 
and 
superv~s~on of 
the 
activities of Dirigo Health and its executive director; 
C. 
Determine the comprehensive services and benefits to be 
included in Dirigo Health Insurance pursuant to Title 22, 
section 3l74-DD; and 
D. 
Beginning September It 2004, 
and annually thereafter, 
report to the Governor and the joint standing committee of 
the Legislature having jurisdiction over health insurance 
matters and the joint standing committee of the Legislature 
Page l2-LR2137(1) 
having 
jurisdiction over 
human 
services 
matters 
on 
the 
impact of Dirigo Health on the small group and individual 
health insurance markets in this State. 
The board shall 
also 
report 
on 
membership 
in 
Dirigo 
Health, 
the 
administrative expenses of Dirigo Health, 
the extent of 
coverage, 
the effect on premiums, 
the number of covered 
lives, the number of Dirigo Health Insurance policies issued 
or renewed and Dirigo Health Insurance premiums earned and 
claims incurred by health insurance carriers offering Dirigo 
Health Insurance. 
§6914. 
Executive director 
The executive director shall: 
1. 
Serve as liaison. 
Serve as the liaison between the 
board of directors and Dirigo Health and serve as secretary and 
treasurer to the board; 
2. 
Manage programs and services. 
Manage Dirigo Health's 
programs 
and 
services, 
including 
the 
Maine 
Quality 
Forum 
established under section 6951; 
3. 
Employ or contract for personnel or service. 
Employ or 
contract 
on 
behalf 
of 
Dirigo 
Health 
for 
professional 
and 
nonprofessional personnel or service; 
4. 
Approve accounts. 
Approve all accounts for salaries, 
per diems, allowable expenses of Dirigo Health or of any employee 
or consultant and expenses incidental to the operation of Dirigo 
Health: and 
5. 
Perform other duties. 
Perform other duties prescribed 
by the board to carry out the functions of this chapter. 
§6915. 
Status of employees 
1. 
State civil service exemption. 
Employees 
of Dirigo 
Health are unclassified major policy-influencing employees under 
the state civil service provisions of Title 5, Part 2 and chapter 
372. 
2. 
State 
retirement 
and 
employee 
health 
insurance. 
Employees of Dirigo Health are deemed state employees for the 
purposes of the state retirement provisions of Title 5, Part 20 
and the state employee health insurance program under Title 5, 
chapter 13, subchapter 2. 
§6916. 
Dirigo Health Insurance 
1. 
Dirigo Health Insurance. 
DirigQ Health shall arrange 
fQr 
the prQvisiQn Qf health benefits cQverage through DirigQ 
Health Insurance. 
DirigQ Health Insurance must comply with all 
relevant requirements Qf this Title. 
DirigQ Health Insurance may 
be offered by health insurance carriers that apply tQ the bQard 
and 
meet 
qualificatiQns 
described 
in this 
sec.tion 
and 
any 
additional qualifications set by the board. 
If health insurance 
carriers 
do 
not 
apply 
to 
Qffer 
and 
deliver 
DirigQ 
Health 
Insurance, the bQard shall have DirigQ Health prQvide access tQ 
health insurance by establishing a 
nQnprQfit health plan Qr 
thrQugh an existing public plan. 
TQ qualify as a carrier Qf 
DirigQ Health Insurance, a health insurance carrier must: 
A. 
PrQvide the cQmprehensive health services and benefits 
as determined by the bQard, 
including a standard benefit 
package and any supplemental benefits the bQard wishes tQ 
make available; and 
B. 
Ensure that: 
(1) 
PrQviders participating in DirigQ Health Insurance 
do nQt charge plan enrollees Qr 3rd parties fQr cQvered 
health care services in excess Qf the amQunt reimbursed 
to that provider by Dirigo Health Insurance; and 
(2) Providers participating in Dirigo Health Insurance 
do not refuse to provide services to a plan enrollee on 
the basis Qf health status, medical conditiQn, previous 
insurance status, 
race, 
cQlor, 
creed, 
age, 
natiQnal 
Qrigin, citizenship status, gender, sexual QrientatiQn, 
disability or marital status. 
Health insurance carriers that seek tQ qualify tQ prQvide DirigQ 
Health Insurance must alsQ qualify as health plans in MaineCare. 
2. 
Contracting authority. 
Dirigo Health has cQntracting 
authority and powers tQ administer DirigQ Health Insurance as set 
out in this subsection. 
A. 
Dirigo 
Health 
may 
CQntract 
with 
health 
insurance 
carriers licensed to sell health insurance in this State or 
other private Qr public 3rd-party administrators to provide 
Dirigo Health Insurance. 
In addition: 
(1) 
Dirigo Health shall issue requests fQr proPQsals 
from health insurance carriers; 
(2) 
Dirigo Health may include quality control, disease 
management 
and 
cost-containment 
prov~S~Qns 
in 
the 
contracts with participating health insurance carriers 
Page l4-LR2137(1) 
or 
may 
arrange 
for 
the provision of 
such services 
through contracts with other entities; 
(3) 
Dirigo Health shall require participating health 
insurance carriers to offer a benefit plan identical to 
Dirigo Health Insurance, 
for which no Dirigo Health 
subsidies are available, 
in the general small group 
market; 
(4) 
Dirigo Health shall make payments to participating 
health 
insurance 
carriers 
under 
a 
Dirigo 
Health 
Insurance contract to provide Dirigo Health Insurance 
benefits to plan enrollees not enrolled in MaineCare; 
and 
( 5) 
Dirigo 
Health 
may 
set 
allowable 
rates 
for 
administration and underwriting gains for contracting 
health insurance carriers. 
B. 
Dirigo Health shall contract with eligible businesses 
seeking assistance 
from 
Dirigo 
Health 
in arranging 
for 
health benefits 
coverage 
by Dirigo Health Insurance 
for 
their employees and dependents as set out in this paragraph. 
(1) 
Dirigo Health may establish contract and other 
reporting 
forms 
and 
procedures 
necessary 
for 
the 
efficient administration of contracts. 
(2) 
Dirigo 
Health 
shall 
collect 
payments 
from 
participating employers and plan enrollees to cover the 
cost of: 
(a) 
Dirigo 
Health 
Insurance 
for 
enrolled 
employees and dependents; 
(b) 
Dirigo Health's quality assurance, 
disease 
management and cost-containment programs; 
(c) 
Dirigo Health's administrative services; and 
(d) 
Other health promotion costs. 
(3) 
Dirigo Health shall establish the minimum required 
contribution levels, not to exceed 60°-0, to be paid by 
employers toward the aggregate payment in subparagraph 
(2) and establish an equivalent minimum amount to be 
paid 
by 
employers 
for 
plan 
enrollees 
and 
their 
dependents who are enrolled in MaineCare. 
Page l5-LR2l37(1) 
(4) 
Dirigo 
Health 
shall 
require 
participating 
employers 
to 
certify that at 
least 
75% 
of 
their 
employees are enrolled in Dirigo Health Insurance, are 
enrolled in the MaineCare program or receive health 
care benefits through another creditable health plan. 
(5) 
Dirigo Health shall reduce the payment amounts for 
plan enrollees eligible for 
a 
subsidy under section 
6918 
accordingly. 
Dirigo 
Health 
shall 
return 
any 
payments 
made 
by 
plan 
enrollees 
also 
enrolled 
in 
MaineCare to those enrollees. 
(6) 
Dirigo 
Health 
shall 
require 
participating 
employers to pass on any subsidy in section 6918 to the 
plan enrollee qualifying for the subsidy, 
up to the 
amount of payments made by the plan enrollee. 
(7) 
Dirigo Health may establish other criteria for 
participation. 
(8) 
Dirigo 
Health 
may 
limit 
the 
number 
of 
participating employers. 
C. 
Dirigo 
Health 
may 
permit 
eligible 
individuals 
to 
purchase Dirigo Health Insurance for themselves and their 
dependents as set out in this paragraph. 
(1) 
Dirigo Health may establish contract 
~orting forms 
and 
procedures 
necessary 
efficient administration of contracts. 
and other 
for 
the 
(2) 
Dirigo Health may collect payments from eligible 
individuals participating in Dirigo Health Insurance to 
cover the cost of: 
( a) 
Enrollment in Dirigo Health Insurance for 
dependents; 
(b) 
Dirigo Health's quality assurance, 
disease 
management and cost-containment programs; 
(c) 
Dirigo Health's administrative services; and 
(d) 
Other health promotion costs. 
(3) 
Dirigo Health shall reduce the payment amounts for 
individuals eligible for a subsidy under section 6918 
accordingly. 
(4) 
Dirigo 
Health 
may 
require 
that 
eligible 
individuals 
certify that 
all 
their 
dependents 
are 
enrolled in Dirigo Health Insurance or are covered by 
another creditable plan. 
(5) 
Dirigo Health may require an eligible individual 
who is currently employed by an. eligible employer that 
does not offer health insurance to certify that the 
current 
employer 
did 
not 
provide 
access 
to 
an 
employer-sponsored benefits plan in the l2-month period 
immediately 
preceding 
the 
eligible 
individual's 
application. 
(6) 
Dirigo 
Health 
may 
limit 
the 
number 
of 
plan 
enrollees. 
(7) 
Dirigo Health may establish other criteria for 
participation. 
3. 
Enrollment in Dirigo Health Insurance. 
Dirigo Health 
shall 
perform, 
at 
a 
m1n1mum, 
the 
following 
functions 
to 
facilitate enrollment in Dirigo Health Insurance. 
A. 
Dirigo Health shall publicize the availability of Dirigo 
Health Insurance to businesses, 
self-employed individuals 
and others eligible to enroll in Dirigo Health Insurance. 
B. 
Dirigo Health shall screen all eligible individuals and 
employees for eligibility for subsidies under section 6918 
and eligibility for MaineCare. 
To facilitate the screening 
and referral process, Dirigo Health shall provide a single 
application 
form 
for 
Dirigo 
Health 
and 
MaineCare. 
The 
application materials must inform applicants of subsidies 
available 
through 
Dirigo 
Health 
and 
of 
the 
additional 
coverage available through MaineCare. 
It must 
allow 
an 
applicant to choose on the application form to apply or not 
to apply for MaineCare or for a subsidy. 
It must allow an 
applicant 
to 
provide 
household 
financial 
information 
necessary 
to 
determine 
eligibility 
for 
MaineCare 
or 
a 
subsidy. 
Except when the applicant has declined to apply 
for MaineCare or a subsidy, an application must be treated 
as an application for Dirigo Health, for a subsidy and for 
MaineCare. 
MaineCare must make the final determination of 
eligibility for MaineCare. 
4. 
Quality 
improvement, 
disease 
management 
and 
cost 
containment. 
Dirigo Health shall promote quality improvement, 
disease management and cost-containment programs as part of its 
administration of Dirigo Health Insurance. 
Page l7-LR2l37(1} 
§69l7. 
Coordination with MaineCaie 
The 
Department 
of 
Human 
Services 
is 
the 
state 
agency 
responsible for the financing and administration of MaineCare. 
It shall 
pay 
for 
MaineCare 
benefits 
for 
MaineCare-eligible 
individuals, 
including 
those 
enrolled 
in 
heal th 
plans 
in 
MaineCare 
that 
are 
providing 
coverage 
under 
Dirigo 
Health 
Insurance. 
§69l8. 
Subsidies 
Dirigo Health may establish sliding scale subsidies for the 
purchase 
of Dirigo 
Health 
Insurance 
paid 
by 
individuals 
or 
employees whose income is under 300% of the federal poverty level 
and who are not eligible for MaineCare. 
Dirigo Health may also 
establish 
sliding-scale 
subsidies 
for 
the 
purchase 
of 
employer sponsored 
health 
coverage 
paid 
by 
employees 
of 
businesses with more than 50 employees, whose income is under 
300°'b of the federal poverty level and who are not eligible for 
MaineCare. 
1. 
Administration. 
Dirigo Health shall, by rule, establish 
procedures to administer this section. 
2. 
Individuals eligible for subsidy. 
Individuals eligible 
for a subsidy must: 
A. 
Have an income under 300% of the federal poverty level, 
be a 
resident of the State, be ineligible for MaineCare 
~verage and be enrolled in Dirigo Health Insurance: or 
B. 
Be enrolled in a health plan of an employer with more 
than 50 employees. 
The health plan may not be self-funded 
pnd must meet 
any other criteria established by Dirigo 
Health. 
The individual must meet other eligibility criteria 
established by Dirigo Health. 
3. 
Limitation of subsidies. 
Dirigo Health may limit the 
availability of subsidies to reflect limitations of available 
funds. 
4. 
Limitation on amount subsidized. 
Dirigo Health may 
limit the amount subsidized of the payment made by individual 
plan enrollees under section 6916, subsection 2, paragraph C to 
40% of the payment to more closely parallel the subsidy received 
by employees. 
In. no case may the subsidy granted to eligible 
individuals in accordance with subsection 2, paragraph A exceed 
the maximum subsidy level available to other eligible individuals. 
5. 
Rotification of subsidy. 
Dirigo Health shall notify 
applicants in writing of their eligibility and approved level of 
subsidy. 
§6919. 
Intragovernmental transfer 
Starting July L 
2004, Dirigo Health shall transfer to a 
special dedicated, nonlapsing revenue account administered by the 
agency of State Government that administers MaineCare for the 
purpose of providing a state match for federal Medicaid dollars. 
Dirigo Health shall annually set the amount of contribution. 
The 
transfer may not include money collected as a recovery in section 
6920. 
§6920. 
Recovery against insurers 
1. 
Recovery. 
For 
the 
purpose 
of 
providing 
the 
funds 
necessary to carry out the powers and duties of Dirigo Health, 
the board shall assess, starting April 1, 2004, health insurance 
carriers, reinsurance carriers and 3rd-party administrators, not 
including carriers and 3rd-party administrators with respect to 
Medicare 
supplemental insurance, 
long-term care insurance 
and 
disease-specific insurance, at such a time and for such amounts 
as the board finds necessary. 
Recovery payments must be made 
guarterly and are due not less than 30 days after written notice 
to the member insurers and must accrue interest at 12% per annum 
on and after the due date. 
2. 
Maximum 
recovery 
payments. 
Each 
health 
insurance 
carrier must be assessed an amount not to exceed 4.1 q,o of annual 
health insurance premiums of persons insured or reinsured by the 
insurer. 
An insurer may not be assessed on pOlicies or contracts 
insuring federal or state employees. 
3. 
Dete~ination of recovery payment. 
The board shall make 
reasonable efforts to ensure that premium revenue associated with 
each covered person is counted only once with respect to any 
recovery payment. 
For that purpose, the board shall reguire each 
health 
insurance 
carrier 
that 
obtains 
excess 
or 
stop 
loss 
insurance to include in its gross premium revenue that revenue 
associated with all individuals whose coverage is insured, in 
whole or in part, through excess or stop loss coverage. 
The 
board shall allow a health insurance carrier to exclude from its 
gross 
premium 
revenue 
that 
revenue 
associated 
with 
covered 
persons who have been counted by the primary insurer or by the 
primary reinsurer or primary excess or stop loss insurer for the 
purpose 
of 
determining 
its 
recovery 
payment 
under 
this 
subsection. 
The board may verify each insurer's recovery payment 
based on annual statements and other reports determined to be 
necessary by the board. 
The board may use any reasonable method 
of estimating the number of covered persons of an insurer if the 
specific number is unknown. 
4. 
Failure to pay recovery payment. 
The superintendent may 
suspend or revoke, after notice and hearing, the certificate of 
author i ty to transact insurance in this State of any insurer or 
reinsurer 
that 
fails 
to 
pay 
a 
recovery 
payment. 
As 
an 
alternative, the superintendent may levy a penalty on any insurer 
or reinsurer that fails to pay a recovery payment when due. 
In 
addition, the superintendent may use any power granted to the 
superintendent by this Title to collect any unpaid 
recovery 
payments. 
5. 
Excess 
payments. 
Dirigo 
Health 
may 
return 
unused 
payments in accordance with a formula established by the board. 
SUBCHAPTER 2 
MAINE OUALITY FORUM 
§695l. 
Maine Quality Forum 
The Maine Quality Forum, referred to in this subchapter as 
"the forum," is established within Dirigo Health. 
The forum is 
governed by 
the board with advice 
from 
an advisory council 
pursuant to section 6952. 
The forum must be funded, at least in 
part, 
through 
the 
recovery 
against 
insurers 
established 
in 
section 6920 and may seek and receive grants and contracts to 
advance its work. 
§6952. 
Advisory council appointment; composition 
The Maine Quality Forum Advisory Council, 
referred to in 
this subchapter as "the advisory council," is a IS-member body 
established by Title 5, section 12004-1, subsection 3l-A. 
The 
Governor shall appoint the following members with the approval of 
the 
joint 
standing 
committee 
of 
the 
Legislature 
having 
jurisdiction over health affairs: 
1. 
Providers. 
Five 
members 
representing 
providers, 
including one allopathic physician, 
one osteopathic physician, 
one registered nurse, 
one representative of hospitals and one 
mental health provider; 
2. 
Consumers. 
Four 
members 
representing 
consumers, 
including 
one 
employee 
who 
receives 
health 
care 
through 
a 
commercially insured product, 
one 
representative of organized 
labor, one representative of a consumer health advocacy group and 
one representative of the uninsured or MaineCare recipients; 
3. 
Employers. 
Four 
members 
representing 
employers, 
including one 
representative 
from 
the 
state 
employee 
health 
insurance program, one representative of a large private employer 
with 
more 
than 
L 000 
full-time 
equivalent 
employees, 
one 
medium-sized employer with 50 to L 000 full-time employees and 
one 
representative 
of 
a 
small 
business 
with 
or 
fewer 
employees: and 
4. 
Health plans. 
Two members representing health plans, 
including one representative of a private health plan and one 
representative from MaineCare. 
Prior to making appointments to the forum, 
the Governor 
shall seek nominations from a statewide medical association, a 
statewide 
osteopathic 
association, 
a 
statewide 
hospital 
association, a statewide nurses association, a statewide health 
purchasing 
collaborative, 
a 
statewide 
health 
management 
coalition, organized labor, a statewide organization representing 
consumers 
advocating 
for 
affordable 
health care, 
a 
national 
association 
of 
retired 
persons, 
a 
statewide 
citizen 
action 
organization, a statewide organization advocating equal justice, 
a statewide organization representing local chambers of commerce, 
a 
statewide 
organization 
representing 
businesses 
for 
social 
responsibility, a statewide small business alliance, a national 
federation of independent businesses, a statewide association of 
health plans and others as appropriate. 
§6953. 
Term 
Members of the advisory council serve 5-year terms and may 
serve no more than 2 consecutive terms. 
The terms of the initial 
members appointed to the advisory council must be staggered. 
§6954. 
Compensation 
Members 
of 
the 
advisory 
council 
are 
entitled 
to 
compensation according to Title 5, chapter 379. 
§6955. 
Quorum 
42A quorum is a majority of the members 
of the advisory 
council. 
§6956. 
Chair and officers 
The 
advisory 
council 
shall 
annually 
choose 
one 
of its 
members to serve as chair for a one-year term. 
The advisory 
council may select other officers and designate their duties. 
§6957. 
Meetings 
The advisory council shall meet at least 4 times a year at 
regular interyals. 
It may also meet at other times at the call 
~he chair or the executive director. 
§6958. 
Qperation 
The forum shall conduct its work in an open, transparent 
manner 
and 
make 
an 
annual 
report 
to 
the 
public 
and 
recommendations for inclusion in the State Health Plan under 
Title 2, chapter 5. 
§6959. 
Forum duties 
The forum shall, at a minimum: 
1. 
Disseminate research. 
Collect and disseminate research 
regarding evidence-based medicine and patient safety to promote 
the rapid deployment of best practices; 
2. 
Provider 
performance. 
Adopt 
a 
set of 
measures 
to 
compare health care provider performance, working collaboratively 
with other organizations, including representatives of providers, 
to collect health care data, analyze performance and disseminate 
comparative 
performance 
information 
in 
formats 
useable 
to 
consumers, providers, purchasers and policy makers; 
3. 
Consumer 
education. 
Conduct 
consumer 
education 
campaigns to assist health care consumers make informed decisions 
and engage in healthy lifestyles; and 
4. 
Technology assessments. 
Conduct technology assessment 
reviews to guide the diffusion of new technologies in this State 
and to make recommendations to the State Health Plan under Title 
2, chapter 5 and the certificate of need program under Title 22. 
§6960. 
Staff support and other assistance 
Dirigo 
Health 
shall 
provide 
staff 
support 
and 
other 
assistance needed to carry out the forum's duties. 
Dirigo Health 
is authorized to contract with the Maine 
Health Information 
Center, the Maine Health Data Organization and other entities to 
assist the forum in the performance of its responsibilities. 
Sec. A-tO. Effective date. 
That section of 
amends 
the Maine Revised Statutes, Title 22, 
subsection 1 takes effect July 1, 2004. 
this Part that 
section 3l74-G, 
PARTB 
Sec. B·1. 2 MRSA c. 5 is enacted to read: 
CHAPTER 5 
STATE HEALTH PLAN 
SIDI. 
State Health Plan 
1. 
Governor. 
The Governor or the Governor's designee shall: 
A. 
Issue the biennial State Health Plan, referred to in 
this chapter as "the plan." 
The first plan must be issued 
by May 2004; 
B. 
Make 
an 
annual 
report to 
the public 
assessing 
the 
progress toward meeting goals of the plan and provide any 
needed updates to the plan; 
c. 
Issue yearly a state health expenditure budget report. 
That 
expenditure 
report 
must 
serve 
as 
the 
basis 
for 
establishing priorities within the plan; and 
D. 
Set 
a 
cap, 
called the capital investment fund, 
for 
resources allocated annually under the certificate of need 
program under Title 22. 
The first capital investment fund 
limit must be established by May 2004 for state fiscal year 
2004-05. 
2. 
Plan. 
The plan must: 
A. 
Establish a capital investment fund limit for each year 
of the biennial plan; 
B. 
Identify and prioritize capital investment needs of the 
health care system in this State; 
c. 
Assess 
the quality and availability of health care 
services across the State; 
D. 
Establish and address health care cost, quality and 
access goals for the State; 
E. 
Address strategies to: 
(1) 
Ensure access to affordable, sustainable health 
~ 
(2) 
Maintain 
a 
rational, 
affordable 
system 
of 
preventive 
health 
and 
health 
care 
services 
and 
facilities; 
(3) 
Stimulate 
an 
adeguate, 
gualified workforce 
to 
operate the system at the highest guality standards; 
(4) 
Establish priorities annually among the goals; 
(5) 
Develop 
specific 
benchmarks 
and 
indicators 
to 
measure 
and 
to 
assess 
the 
availability, 
guality, 
effectiveness and efficiency of the health care system 
in this State and report on progress toward meeting 
those benchmarks; and 
(6) 
Set forth specific goals and strategies to address 
the major cost drivers in the health care system and 
the major threats to public health and safety. 
These 
should include both medical care 
and public health 
goals. 
Specifically, these should include, but are not 
limited to, strategies to reduce the high rates of lung 
disease, diabetes, 
cancer and heart disease in this 
State; 
F. 
Explicitly identify levers to stimulate change such as 
purchasing 
strategies, 
consumer 
information, 
pay 
for 
performance and state licensing and rules; and 
G. 
Be developed to assist purchasers and providers to make 
resource decisions that improve 
the public's health and 
build an affordable, guality health care system. 
§102. 
Advisory Counci1 on Bea1th Systems Deve10pment 
1. 
Appointment; 
composition. 
The 
Advisory 
Council 
on 
Health 
Systems 
Development, 
established by Title 
5, 
section 
12004-1, subsection 31-B and referred to in this section as "the 
counciL" consists of the following 11 members appointed by the 
GovernQr with approval of the joint standing committee of the 
Legislature having jurisdiction over health matters: 
A. 
Two experts in health care delivery; 
B. 
One expert in long-term care; 
C. 
One expert in mental health; 
D. 
One expert in public health care financing; 
E. 
One expert in private heglth !:;;gre fingncing; 
F. 
One expert in health care quality; 
G. 
One expert in public health; 
H. 
Two consumer representatives; and 
I. 
One representative of the Department of Human Services, 
Bureau of Health program that works collaboratively with 
other organizations to improve the health of the citizens of 
this State. 
Prior to appointment, the Governor shall solicit nominations from 
the public. 
2. 
Term. 
Members serve 5-year terms and may serve no more 
than 
consecutive terms. 
The 
terms of the initial members 
appointed to the council must be staggered. 
3. 
Compensation. 
Members of the council are entitled to 
compensation according to Title 5, chapter 379. 
4. 
Quorum. 
A quorum is a majority of the members of the 
council. 
5. 
Chair. 
The council shall annually choose one of its 
members to serve as chair for a one-year term. 
6. 
Meetings. 
The council shall meet at least 4 times a 
year at regular intervals. It may also meet at other times at the 
call of the chair or the Governor or the Governor's designee. 
7. 
Duties. 
The council shall assist the Governor or the 
Governor's designee in developing the plan by: 
A. 
Synthesizing current research and studies available in 
this State and collecting and coordinating existing data; 
B. 
Advising on the development of the plan: and 
C. 
Holding at least one public hearing on the plan. 
8. 
Staff support. 
The 
Governor's office shall provide 
staff support to the council. 
The Department of Human Services, 
Bureau of Health 
and other agencies 
of State 
Government 
as 
necessary 
and 
appropriate 
shall 
provide 
additional 
staff 
support. 
The Maine Health Data Organization, the Maine Health 
Information Center and the Department of Human Services, Bureau 
of Health or its successor shall cooperate with the council. 
The 
work 
of 
the 
Maine Quality Forum established in Title 
24-A, 
section 6951 and the health performance council administered by 
the 
Maine 
Development 
Foundation 
must 
also 
inform 
the 
plan 
developed by the council. 
§103. 
Data 
The council shall solicit data and information from both the 
public and private sectors to help inform the council's work. 
1. 
Bureau of Health to forward data. 
The Department of 
»uman Services, Bureau of Health, in consultation with the Maine 
Center for Public Health Practice established pursuant to Title 
22, section 3-D, the program in the Bureau of Health that works 
collaboratively to improve the health of the citizens of this 
State and a statewide public health association, shall forward to 
the council each year data documenting key public health needs, 
organized by region of the State. 
2. 
Public purchasers to present report. 
Public purchasers 
using ~tate or municipal funds to purchase health care services 
or health insurance shall, beginning January 1, 2004, present to 
the 
council 
a 
consolidated 
state 
health expenditure 
report 
outlining all funds expended in the most recently completed state 
fiscal year for hospital inpatient and outpatient care, physician 
services, 
prescription drugs, 
long-term 
care, 
mental 
health, 
other services and administration, organized by agency. 
3. 
Council to develop document. 
The co unci L 
through a 
health management coalition in this State and other groups, shall 
encourage private purchasers established under Titles 13, 13-B 
and 13-C to develop a 
document similar to that described in 
sUbsection 2 for the council's consideration. 
§104. 
Uses of plan 
1. 
Guide decisions. 
The State in awarding certificates of 
need 
and 
the 
Maine 
Health 
and 
Higher 
Education 
Facilities 
Authority in its health care lending shall use the plan as a 
guide in making their decisions. 
2. 
Certificate of need. 
A certificate of need or public 
financing that affects health care costs may not be provided 
unless it meets goals and budgets explicitly outlined in the plan. 
Sec. B·2. 5 MRSA §12004.I, sub·§31·B is enacted to read: 
31-B. 
Health Care 
Advisory 
Council on 
Health 
Systems 
Expenses 
Only 
MRSA 
§102 
Development 
Sec. B-3. 22 MRSA §253, as amended by PL 2001, c. 354, §3, is 
repealed. 
Sec. B-4. 22 MRSA §1709, as enacted by PL 1965, c. 231, §3, 
is repealed. 
PART C 
Sec. C-l. 5 MRSA §12004-I, sub-§38, as amended by PL 1997, c. 
689, Pt. A, §1 and affected by Pt. C, §2, is repealed. 
Sec. C-2. 22 MRSA §328, sub-§3-A is enacted to read: 
3-A. 
Capital investment fund. 
"Capital investment fund" 
means that fund described in Title 2, section 101, subsection 1, 
paragraph D. 
Sec. C-3. 22 MRSA §328, sub-§8, as enacted by PL 2001, c. 664, 
§2, is amended to read: 
8. 
Health care facility. 
"Health care facility" means 
a 
hospi tal, psychiatric hospital, nursing facility, kidney disease 
treatment center including a freestanding hemodialysis facili ty, 
rehabilitation 
facility, 
ambulatory 
surgical 
facility, 
independent 
radiological 
service 
center, 
independent 
cardiac 
catheterization center e~L cancer treatment center or office of a 
private physician or physicians, whether in individual or group 
practice. 
"Health care facility" does not include the office of 
a---pF-1:'rat;.~--phy&i-o-i-an--~--f'by-6.,i€.,ia~-6--e~ 
a 
dentist or dentists, 
whether in individual or group practice. 
Sec. C-4. 22 MRSA §328, sub-§27 is enacted to read: 
27. 
State Health Plan. 
"State Health Plan" means the plan 
developed in accordance with Title 2, chapter 5. 
Sec. C-5. 22 MRSA §335, sub-§l, as enacted by PL 2001, c. 664, 
§2, is repealed and the following enacted in its place: 
1. 
Basis for decision. 
Based solely on a 
review of the 
record maintained under 
subsection 
6, 
the 
commissioner 
shall 
approve 
an 
application 
for 
a 
certificate 
of 
need 
if 
the 
commissioner determines that: 
A. 
The project meets the conditions set forth in subsection 
l.L 
B. The project is consistent with the State Health Plan: 
C. 
The 
project ensures 
the realization of high-quality 
outcomes and does not negatively affect the quality of care 
delivered by existing service providers: 
D. 
The project does not result in inappropriate increases 
in service utilization, 
according 
to 
the 
principles 
of 
evidence-based medicine: and 
E. 
The project can be funded within the capital investment 
fund. 
Sec. C-6. 22 MRSA §335, sub-§l-A is enacted to read: 
I-A. 
Review 
applications in 2 
year, one for large 
cycle. 
The 
commissioner 
shall 
competitive review cycles each state 
projects and one for small projects. 
review 
fiscal 
Sec. C-7. 22 MRSA §335, sub-§5, as enacted by PL 2001, c. 664, 
§2, is amended to read: 
5. 
Record. 
The record created by the department in the 
course of its review of an application must contain the following: 
A. 
The application and all other materials submitted by the 
applicant 
for 
the 
purpose 
of 
BeiH~--ffiaae 
making 
those 
documents part of the record; 
B. 
All information generated by or for the department in 
the course of gathering material to assist the commissioner 
in 
determining 
whether 
the 
conditions 
for 
granting 
an 
application for a certificate of need have or have not been 
met. 
This information may include, without limitation, the 
report 
of 
consultants, 
including 
reports 
by 
panels 
of 
experts assembled by the department to advise it on the 
application, memoranda of meetings or conversations with any 
person interested in commenting on the application, letters, 
memoranda and documents from other interested agencies of 
State Government and memoranda describing officially noticed 
facts: 
C. 
Stenographic 
hearing held 
by 
department at the 
the application; 
or electronic recordings of 
any public 
the 
commissioner 
or 
the 
staff of 
the 
direction of the commissioner regarding 
D. 
Stenographic 
or 
electronic 
informational meeting held by 
section 337, subsection 5; 
recording 
of 
the department 
any 
public 
pursuant to 
E. 
Any documents submitted by any person for the purpose of 
eeiB~--maee making 
those 
documents 
part 
of 
the 
record 
regarding any application for a certificate of need or for 
the purpose of influencing the outcome of any analyses or 
decisions regarding an application for certificate of need, 
except documents that have been submitted anonymously. Such 
source-identified documents automatically become part of the 
record upon receipt by the department; aBe 
F. 
Preliminary and final analyses of the record prepared by 
the staffT~ 
G. 
Written assessments by the Director of the Bureau of 
Health and the Superintendent of Insurance assessing the 
impact of the application on the health care system or cost 
of health insurance in the State. 
Sec. C-S. 22 MRSA §335, sub-§7, 1f1fC and D, as enacted by PL 
2001, c. 664, §2, are amended to read: 
C. 
There is a public need for 
demonstrated by certain factors, 
to: 
the proposed services as 
including, but not limited 
(1) 
Whether, and the extent to which, the project will 
substantially 
address 
specific 
health 
problems 
as 
measured by health needs in the area to be served by 
the project; 
(2) 
Whether the project will have a positive impact on 
the health status indicators of the population to be 
served; 
(3) 
Whether the services affected by the project will 
be accessible to all residents of the area proposed to 
be served; and 
(4) 
Whether 
the 
project will 
provide 
demonstrable 
improvements in quality and outcome measures applicable 
to the services proposed in the project; aBe 
D. 
The proposed services are consistent with 
and economic development of health facilities 
resources for the State as demonstrated by: 
the orderly 
and health 
(1) 
The impact of the project on total health care 
expenditures after taking into account, to the extent 
practical, both the costs and benefits of the project 
and the competing demands in the local service area and 
statewide for available resources for health care; 
(2) 
The availability of state 
increase in state costs associated 
the project's services; and 
funds 
to 
cover 
any 
with utilization of 
(3) 
The 
accessible 
methods of 
likelihood 
that 
more 
effective, 
more 
or less costly alternative technologies or 
service delivery may become availableT~ 
Sec. C-9. 22 MRSA §335, sub-§7"E is enacted to read: 
E. 
The project meets the criteria set forth in subsection 1. 
Sec. C-I0. 22 MRSA §338, sub-§l, "A and B, as enacted by PL 
2001, c. 664, §2, are amended to read: 
A. 
New 
medical 
technologies 
and 
the 
impact 
of 
technologies 
on 
the health care delivery system 
State; aBa 
those 
in the 
B. 
Unmet need for health care services in the StateT~ 
Sec. C-l1. 22 MRSA §338, sub-§I,'C is enacted to read: 
C. 
The quality of health care. 
Sec. C-12. 22 MRSA §1718 is enacted to read: 
§1718. 
Consumer information 
The department shall adopt rules that are routine technical 
rules 
as 
defined 
in Title 
5, 
chapter 
375, 
subchapter 
2-A 
establishing reasonable guidelines for policies to be adopted and 
implemented by hospitals with respect to the provision of notice 
to the public of the average charges and average payment accepted 
from payors other than Medicare and MaineCare for the most common 
inpatient procedures and services offered and the most common 
outpatient procedures and services offered, average daily room 
and board charges and average payment accepted for medical or 
surgical beds and the average charges and payment accepted for 
basic emergency department visits. 
Sec. C-13. 22 MRSA §1890 is enacted to read: 
§1890. 
Plan for Hospitals for Maine's Future. 
1. 
Plan. 
The Governor annually shall issue the Plan for 
Hospitals for Maine's Future, referred to in this section as "the 
121an." 
The 121an must include a report describing the manner in 
which statewide hospital expenditures will be allocated in the 
coming state fiscal year. 
The Governor shall issue the first 
such report no later than March 1, 2004. 
2. 
Purpose. 
The purpose of the plan is to promote the 
effective, 
efficient 
and 
rational 
expenditure 
of 
limited 
financial 
resources 
in 
a 
manner 
that 
preserves 
access 
to 
critical, 
primary 
and 
preventive 
services 
for 
rural 
and 
vulnerable 
residents 
of 
this 
State. 
To 
achieve 
this 
goal, 
otherwise 
competing entities 
must 
collaborate 
to 
develop 
a 
coordinated plan to restructure the hospital system of this State 
to provide the highest guality care in the most efficient manner. 
The plan must inform the certificate of need 12rocess and the 
develo12ment of the State Health Plan in Title 2, section 101. 
3. 
Statewide hospital expenditures. 
The level of statewide 
hospital eX12enditures to be allocated by the plan must egual that 
12ortion 
of 
personal health care 
expenditures 
in this 
State 
attributable to inpatient and outpatient hospital care in the 
most 
recent 
l2-month 
period 
for 
which 
auditable 
data 
are 
available, adj usted forward to the plan year by the Consumer 
Price Index for each intervening time period. 
For purposes of 
developing the first plan, 
1999 hospital expenditures must be 
used as a basis for calculating the target level of statewide 
hospital expenditures. 
The expenditure level for the most recent 
year for which audited hospital data are available must be used, 
adjusted forward to state fiscal year 2005 by the appropriate 
values for 
the Hospital Cost 
Index developed by the federal 
Centers 
for 
Medicare 
and 
Medicaid 
Services. 
This 
adjusted 
expenditure level is egual to the amount to be allocated under 
the plan. 
4. 
Working group. 
The Governor shall annually convene a 
working 
group 
to 
develop 
a 
proposed plan pursuant 
to 
this 
subsection. 
A. 
The 
working 
group 
comprises 
representatives 
of 
a 
statewide 
hospital 
association, 
a 
statewide 
medical 
association, 
a 
statewide 
osteopathic 
association 
and 
representatives of the Governor's Office of Health Policy 
and Finance or its successor. 
The Governor shall designate 
~e chair of the working group. 
The State Government shall 
actively participate in the development of 
the 
proposed 
plan. 
The Governor shall convene the first working group no 
later than November 1, 2003. 
B. 
The 
members 
of 
the 
working 
group 
shall 
develop 
a 
proposed plan for the hospital system in this State that 
satisfies the following criteria: 
(1) 
The 
proposed 
plan 
promotes 
the 
realization of 
high-quality outcomes 
for patient care 
and enhanced 
patient safety; 
(2) The proposed plan promotes the efficient use of the 
hospital resources of this State in delivering care to 
the 
residents 
of 
this 
State, 
ensuring 
that 
rural 
residents of this State have 
appropriate access to 
critical 
care 
services 
as 
well 
as 
primary 
and 
preventive 
care, 
within 
a 
reasonable 
geographic 
distance; and 
(3) The proposed plan promotes cost-effectiveness. 
C. 
The working group shall present the Governor with a 
final 
proposal 
for 
design modifications 
to 
the hospital 
system in this State no later than February L 
2004. 
5. 
Intent to displace competition. 
It is the intent of the 
Legislature that, 
to the extent necessary for the purpose of 
permitting collaboration to formulate a proposed plan allocating 
costs and services, such collaboration must displace competition 
in 
affected 
health 
care 
markets; 
and 
further, 
that 
such 
collaboration and the resulting plan are subject to the active 
supervision of the Governor and the Attorney GeneraL or their 
designees. 
6. 
Evaluation 
of 
proposed 
plan. 
The 
Governor 
shall 
evaluate the plan proposed by the working group pursuant to 
subsection 4 in accordance with the evaluation criteria set forth 
in this subsection. 
A. 
In evaluating the proposed plan, 
the Governor shall 
assess the extent to which the proposed plan offers one or 
more of the following benefits: 
(1) 
Enhancement of the guality of hospital or related 
care provided to the citizens of this State; 
(2) 
Preservation 
of 
critical 
care, 
primary 
and 
preventive 
health 
care 
services 
in 
geographical 
proximity to the communities traditionally served by 
those facilities; 
(3) 
Gains in the cost-efficiency of services provided 
by hospitals in this State; 
(4) 
Improvements 
in 
the 
utilization 
of 
hospital 
resources and equipment; 
(5) 
Avoidance of duplication of hospital resources; and 
(6) 
Continuation 
or 
establishment 
of 
needed 
educational programs for health care professionals and 
providers. 
B. 
In evaluating the proposed plan, 
the Governor shall 
assess the extent to which the proposed plan presents one or 
more of the following disadvantages: 
(1) 
The extent of any likely adverse impact on the 
ability of health maintenance organizations, preferred 
provider 
organizations, 
managed 
health 
care 
service 
agents or other health care payors to negotiate optimal 
payment 
and 
service 
arrangements 
with 
hospitals, 
physicians, allied health care professionals or other 
health care providers; 
(2) 
The extent of any reduction in competition among 
hospi tals, 
physicians, 
allied 
health 
professionals, 
other health care providers or other persons furnishing 
goods or services to, or in competition with, hospitals 
that is likely to result directly or indirectly from 
the proposed plan; 
(3) 
The 
extent 
of 
any 
likely 
adverse 
impact 
on 
patients or clients in the quality, availability and 
price of health care services; 
(4) 
The availability of arrangements that are less 
restrictive 
to 
competition 
and 
achieve 
the 
same 
benefits or a more favorable balance of benefits over 
disadvantages 
attributable 
to 
any 
reduction 
in 
competition likely to result from the proposed plan; and 
(5) 
The extent of any likely adverse impact on the 
access of persons in in-state educational programs for 
health 
professions 
to 
existing 
or 
future 
clinical 
training programs. 
C. 
The Governor shall consult with the Attorney General 
regarding 
the 
evaluation of 
any potential 
reduction 
in 
competition resulting from the proposed plan. 
7. 
Administrative procedures. 
Prior to approval of the 
proposed plan, 
the Governor or the Governor's designee shall 
conduct an adjUdicatory proceeding in conformity with the Maine 
Administrative Procedure Act. 
8. 
Implementation. 
If, after evaluating the proposed plan 
and consulting with the Attorney General pursuant to subsection 
6, the Governor determines that the proposed plan satisfies the 
criteria set forth in subsection 
and, 
further, 
that 
the 
benefits posed by the proposed plan outweigh the disadvantages, 
the proposed plan must 
be 
approved for 
implementation. 
The 
approved plan does not require additional review under the Maine 
Certificate of Need Act of 2002. 
Sec. C-14. 22 MRS A §2061, sub-§2, as amended by PL 1993, c. 
390, §24, is further amended to read: 
2. 
Review. 
Each project for a health care facility has 
been reviewed and approved to the extent required by the agency 
of the State that serves as the Designated Planning Agency of the 
State or by the Department of Human Services in accordance with 
the provisions of the Maine Certificate of Need Act of 1918 2002, 
as amended, 
e~T-~R-~he-€a£e-~-~~~~~~~-~&~~~a~r-aa&-BeeR 
~eviewea-aRa-a~~ve~-by-~~~~~~~~ar&-~iBaBee-bemmissieB 
Ee-ERe-eHEeRE-Ee~~iEea-By-eRapEeE-1Q1 and meets the intent of the 
State Health Plan in Title 2, chapter 5 for controlling health 
care and health insurance costs in the State; 
Sec. C-IS. 22 MRSA §8702, sub-§4, as amended by PL 2001, c. 
596, Pt. B, §21 and affected by §25, is further amended to read: 
4. 
Health care facility. 
"Health care facility" means a 
public 
or 
private, 
proprietary 
or 
not-for-profit 
entity 
or 
institution providing health services, including, but not limited 
to, a radiological facility licensed under chapter 160, a health 
care facility licensed under chapter 
or certified under 
chapter 
405-D, 
an independent radiological service center, 
a 
federally qualified health center 
e~L rural health clinic or 
rehabilitation agency certified or otherwise approved by the 
Division of Licensing and Certification within the Department of 
Human 
Services, 
a 
home 
health care 
provider 
licensed 
under 
chapter 419, a residential care facility licensed under chapter 
1664, a hospice provider licensed under chapter 1681, 
a-eemm~Rity 
~eRaBi~itat~eB-~~~-lieeBsea-~--~~~~-~Q-A7-~~--1Q1 Q 
retail store drug outlet licensed under Title 32, chapter 117, a 
state institution as defined under Title 34-B, chapter 1 and a 
mental health facility licensed under Title 34-B, chapter 1. 
Sec. C-16. 22 MRSA §8702, sub-§4-A is enacted to read: 
4-A. 
Health care practitioner. 
"Health care practitioner" 
means a person licensed by this State to provide or otherwise 
lawfully providing health care or a partnership or corporation 
made 
up 
of 
such persons or 
an officer, 
employee, 
agent or 
contractor of such a person acting in the course and scope of 
employmen~ency or 
contracJ~_Ielated to or supportive of the 
provision of health care to individuals. 
Sec. C-17. 22 MRSA §8702, sub-§8, as enacted by PL 1995, c. 
653, Pt. A, §2 and affected by §7, is amended to read: 
8. 
Payor. 
administrator. 
"Payor" means 
a 
3rd-party payor or 3rd-party 
Sec. C-18. 22 MRSA §8702, sub-§9-A is enacted to read: 
9-A. 
Ouality data. 
"Quality data" means data submitted by 
heal th care providers from which health care service indicators 
may be developed and reported to the public. 
Sec. C-19. 22 MRSA §8702, sub-§l1, as amended by PL 2001, c. 
677, §2, is further amended to read: 
11. 
Third-party payor. 
"Third-party payor" means a health 
insurer, 
nonprofit hospital, 
medical services organization or 
managed care organization licensed in the State or the plan 
established in chapter 854. 
~Third-party payor~ does not include 
carriers licensed to issue limited benefit health policies or 
accident, specified disease, vision, disability, long-term careT 
~ nursing home care e~-Meeiea~e-s~pp±emeBE policies. 
Sec. C-20. 22 MRSA §8703, sub-§ 1, as amended by PL 2001, c. 
457, §4, is further amended to read: 
1. 
Objective. 
The 
p~~pese purposes of the organization is 
~ to create and maintain a 
useful, objective, reliable and 
comprehensive health information database that is used to improve 
the health of Maine citizens and, 
either independently or in 
conjunction 
with 
another 
state 
entity, 
to 
issue 
periodic 
reports. 
This 
database 
must 
be 
publicly 
accessible 
while 
protecting patient confidentiality and respecting providers of 
care. 
The organization shall collect, process aBeL analyze and 
£.~ clinical aBeL financial and quality data as defined in 
this chapter. 
Sec. C-21. 22 MRSA §8704, sub-§I, 1[A, as amended by PL 2001, 
c. 457, §7, is further amended to read: 
A. 
The board shall develop and implement data collection 
policies 
and 
procedures 
for 
the 
collection, 
processing, 
storage 
and 
analysis 
of 
clinical, 
financial 
and 
restructur ing data in accordance with this subsection for 
the following purposes: 
(I) 
To use, build and improve 
upon and coordinate 
existing data sources and measurement efforts through 
the integration of data systems and standardization of 
concepts; 
( 2) 
To coordinate the development of a linked public 
and private sector information system; 
( 3 ) 
To emphasize data that is useful, relevant and 
not duplicative of existing data; 
(4) 
To minimize the burden on those providing data; 
(5) 
To 
preserve 
the 
reliability, 
accuracy 
integrity of collected data while ensuring that 
data is available in the public domain; ana 
is 
and 
the 
f9+---~-~~~-iR~e£ma~ieR--~Fem-~~~~-wh~-weFe 
Fe~~~Fea--Ee--~~±e--aaEa--w~ER--ERe--Ma~ne--Hea±ER--GaFe 
~~nanee--~~~~----~~--e£~aRi~a~ieR--~--ee±±eet 
~n~eFmaE~en--~£em--~~~~--~~~~-~~--w~a--a 
±~R*ea---~~~~~~---&y&&effi---~e£---~~---e±eeEFeR~e 
EFaRsm~ss~eRT--~l~~~~--aRa--~~~--e~--~~--~s 
FeaseRaB±y-aya~±aB±e-Ee-~Fey~aeFST 
(7) 
To develop annually, either independently or in 
conjunction 
with 
another 
state 
entity, 
meaningful, 
easy-to-understand 
reports 
of 
quality 
data 
for 
distribution on a publicly accessible Internet site or, 
through the creation of a list of interested parties or 
through a specific request by a member of the public, 
via mail or electronic mail; 
(8) 
To periodically produce, either independently or 
in conjunction with another state entity, 
at least 
annually, the reports described in section 8712 on a 
publicly 
accessible 
Internet 
site 
or, 
through 
the 
creation of a list of interested parties or through a 
specific request by a member of the public, via mail or 
electronic mail; and 
(9) 
To publish at least once per year in the major 
in-state newspapers 
the availability of the quality 
data and price reports described in section 8712. 
Sec. C-22. 22 MRSA §8704, sub-§7, as amended by PL 2001, c. 
457, §g, is further amended to read: 
7. 
Annual report. 
The board shall prepare and submit an 
annual report on the operation of the organization and the Maine 
Health Data Processing Center, including any activity contracted 
for 
by 
the organization, 
and 
on health care 
trends 
to 
the 
Governor 
and the joint standing committee of the Legislature 
having jurisdiction over health and human services matters no 
later than February 1st of each year. 
The report must include an 
annual 
accounting 
of 
all 
revenue 
received 
and 
expenditures 
incurred in the previous year and all revenue and expenditures 
planned for the next year. 
The report must include a list of 
persons or entities that requested data from the organization in 
the preceding year with a brief summary of the stated purpose of 
the request. 
Sec. C-23. 22 MRSA §8707, sub-§2, as enacted by PL 1995, c. 
653, Pt. A, §2 and affected by §7, is amended to read: 
2. 
Notice and conwnent period. 
The rules must establish 
criteria for 
determining 
whether 
information is 
confidential 
clinical data, confidential commercial ~ 
or privileged medical 
information and adopt procedures to give affected health care 
providers, 
facilities 
and 
payors 
notice 
and 
opportunity 
to 
comment in response to requests for information that may 
be 
considered confidential or privileged. 
Sec. C-24. 22 MRSA §8708, sub-§6-B is enacted to read: 
B. 
Quality data. 
Pursuant to rules adopted by the board 
for form, medium, content and period for filing, providers shall 
file with the organization quality data. 
Quality data must 
include data that help consumers make informed choices regarding 
their health care services. 
In developing the rules, the board 
shall collaborate with other agencies, professional associations 
and entities working in the field of health care data. 
Sec. C-2S. 22 MRSA §8711, sub-§3 is enacted to read: 
3. 
Most connonly performed services and procedures. 
The 
organization shall develop an annual report of the 10 services 
and procedures most often provided by osteopathic and allopathic 
physicians in the private office setting in this State. 
The 
organization shall make this report available to all physician 
practices in the State. 
The first report must be produced and 
published by July 1, 2004. 
Sec. C-26. 22 MRSA §8712 is enacted to read: 
§8112. 
Reports for consumer use 
1. 
Price reports. 
The organization, with direction from 
the board, shall develop clearly labeled and easy to understand 
price reports for consumer use. At a minimum, the organization 
shall develop these 
reports 
on 
the 
most 
common 
services 
provided by health care facilities and health care practitioners, 
excluding emergency services. The board shall specify the data 
elements to be included in the price reports, including, but not 
limited to, average paid price per service per facility and total 
number of services per facility, organized 
by payor type such as 
Medicare, 
Medicaid, 
aggregated commercial insurers, 
aggregated 
3rd-party administrators and self-payor uninsured. 
2. 
Comparison 
report 
of 
diagnosis-related 
groups 
and 
outpatient procedures. 
At 
a 
minimum, 
the organization shall 
develop 
a 
report 
that 
com~s 
the 
most 
common 
diagnosis-related 
groups 
and 
the 
most 
common 
outpatient 
procedures for all hospitals and the 15 most common procedures 
for nonhospital health care facilities in the State to similar 
data for medical care rendered in other states, when such data 
are available. 
PARTD 
Sec. D-l. 24 MRS A §2321, sub-§4, ,B, as enacted by PL 1997, c. 
344, §6, is amended to read: 
B. 
The nonprofit hospital and medical service organization 
must 
demonstrate 
in 
accordance 
with 
generally 
accepted 
actuarial 
principles 
and 
practices 
consistently 
applied 
that, 
as of a date no more than 210 days prior to the 
filing, the ratios of benefits incurred to premiums earned 
for said products average no less than 
89% 87.5'+0 for the 
previous 12-month period. 
Sec. D-2. 24 MRSA §2327, as amended by PL 1985, c. 648, §2, 
is further amended to read: 
§2321. 
Group rates 
No group health care contract may be issued by a nonprofit 
hospi tal or medical service organization in this State until a 
copy of the group manual rates to be used in calculating the 
rates 
for 
these 
contracts 
has 
been 
filed 
for 
informational 
purposes with the superintendent. Notwithstanding this section, 
rates 
for 
group 
Medicare 
supplement, 
nursing 
home 
care 
or 
long-term care contracts must be filed in accordance with section 
2321 and rates for small group health plans as defined by Title 
24-A, 
section 
2808-B must 
be 
filed in accordance with that 
section. 
Sec. D-3. 24 MRSA §2332-E, as enacted by PL 1993, c. 477, Pt. 
D, §5 and affected by Pt. F, §1, is amended to read: 
§2332-E. 
Standardized claim forms 
GR-e~-~~~-~--~r-l~~~r-a±± All nonprofit hospital or 
medical service organizations and nonprofit health care plans 
providing payment or reimbursement for diagnosis or treatment of 
a 
condition 
or 
a 
complaint 
by 
a 
licensed 
physician 
or 
chiropractor must accept the current standardized claim form for 
professional 
services 
approved 
by 
the 
Federal 
Government 
in 
electronic 
format. 
GR--e~--~~~--~---~r--l~~~r--a±± All 
nonprofit hospital or medical service organizations and nonprofit 
health 
care 
plans 
providing 
payment 
or 
reimbursement 
for 
diagnosis or 
treatment of 
a 
condition or 
a 
complaint 
by 
a 
licensed hospital must accept the current standardized claim form 
for professional or facility services, as applicable L approved by 
the Federal Government and submitted electronically. 
A nonprofit 
hospital or medical service organization or nonprofit health care 
P.J,..gn may not be required to accept a claim submitted on a form 
other than the applicable form specified in this section and may 
not 
be 
required 
to 
accept 
a 
claim 
that 
is 
not 
submitted 
electronically. 
Sec. D·4. 24·A MRSA §423·D is enacted to read: 
§423-D. 
Annual report 
The superintendent shall adopt routine technical rules as 
defined 
in Title 
5, 
chapter 
375, 
subchapter 
A 
regarding 
specifications 
for 
an 
annual 
report 
to 
be 
filed 
by 
each 
authorized insurer on or before March 1st of each year, or within 
any reasonable extension of time that the superintendent for good 
cause may 
have granted on or before March 1st. 
The 
annual 
reports must provide the public with generaL understandable and 
comparable financial information relative to the operations of 
authorized insurers. 
Such information must include, but is not 
limited to, medical claims expense, administrative expense and 
underwriting gain for each line segment of the market in this 
State in which the insurer participates. 
The 
superintendent 
shall develop standardized definitions of each reported measure. 
Sec. D·5. 24·A MRSA §1952, as enacted by PL 1995, c. 673, 
Pt. A, §3, is amended to read: 
§1952. 
Licensure 
A person or entity may not market, sell, offer or arrange 
for a package of one or more health benefit plans underwritten by 
or 
more 
carriers 
without 
first 
being 
licensed 
by 
the 
superintendent. 
The 
superintendent 
shall 
specify 
by 
rule 
standards and procedures for the issuance and renewal of licenses 
for 
private 
purchasing 
alliances. 
A 
rule 
may 
require 
an 
application fee of not more than $400 and an annual license fee 
of not more than $100. 
A license may not be issued until the 
rulemaking required by this chapter has been undertaken and all 
required rules are in effect. 
Dirigo Health, as established in 
chapter 87, is exempt from the licensure requirements of this 
section as an instrumentality of the State. 
Sec. D-6. 24-A MRSA §2436, sub-§2-A, as enacted by PL 2001, c. 
569, §l, is amended to read: 
2-A. 
For purposes of this section, 
ali "undisputed claim" 
means a timely claim for payment of covered health care expenses 
under a policy or certificate providing health care coverage that 
is submitted to an insurer eli in the insurer's standard e;j,ai:R1 
EeFR1 
electronic data format using the most current published 
procedural 
codes with all the required fields completed with 
correct and complete information in accordance with the insurer's 
published claims filing requirements. 
This 
subsection applies 
only to a policy or certificate of a health plan as defined in 
section 4301-A, subsection 7. 
read: 
Sec. D-7. 24-A MRSA §2736-C, sub-§2, ~B-l is enacted to read: 
B-1. 
In no instance may a rate reflect the cost to the 
individual health carrier of the recovery amount applied in 
accordance with section 6920. 
Sec. D-S. 24-A MRSA §2S0S-B, sub-§§2-A to 2-C are enacted to 
A. 
Rate filings. 
A carrier offering small group health 
plans shall file with the 
superintendent every rate, 
rating 
formula and classification of risks and every modification of any 
formula or classification that it proposes to use. 
Every filing 
must state the effective date of the filing. 
Every filing must 
be made not less than 60 days in advance of the stated effective 
date, 
unless 
the 
day 
requirement 
is 
waived 
by 
the 
superintendent. 
B. 
Rate 
review and hearings. 
Except 
as 
provided in 
subsection 2-C, rate filings are subject to this subsection. 
A. 
The 
effective 
date 
may 
be 
suspended 
by 
the 
superintendent for a period of time not to exceed 30 ~ 
In the case of a filing that meets the criteria in paragraph 
E, the superintendent may suspend the effective date for a 
longer period not to exceed 
days 
from 
the date the 
carrier satisfactorily responds to any reasonable discovery 
reguests. 
B. 
The superintendent shall disapprove any premium rates 
filed by any carrier, whether initial or revised, 
for 
a 
small group health plan unless it is anticipated that the 
aggregate benefits estimated to be paid under all the small 
group health plans maintained in force by the carrier for 
the period for which coverage is to be provided will return 
to policyholders at least 
75% of the aggregate premiums 
collected for those policies, as determined in accordance 
with accepted actuarial principles and practices and on the 
basis of incurred claims experience and earned premiums. 
C. 
When a filing is not accompanied by the information upon 
which 
the 
carrier 
supports 
such 
filing, 
or 
the 
superintendent 
does 
not 
have 
sufficient 
information 
to 
determine whether such filing meets the reguirements that 
rates 
not 
be 
excessive, 
inadeguate 
or 
unfairly 
discriminatory, the superintendent shall reguire the carrier 
~o furnish 
the 
informati~~on which it supports 
the 
filing. 
A filing and 
supporting information are public 
records 
except 
as 
provided 
by 
Title 
1, 
section 
402, 
subsection 3 and become part of the official record of any 
hearing held pursuant to paragraph D. 
D. 
If at any time the superintendent has reason to believe 
that a filing does not meet the reguirements that rates not 
M 
excessive, inadeguate or unfairly discriminatory or that 
the filing violates any of the provisions of chapter 23, the 
superintendent shall cause a hearing to be held. 
Hearings 
held under 
this section must 
conform 
to 
the 
procedural 
reguirements set forth in Title 5, chapter 375, subchapter 
4. 
The 
superintendent shall issue an order or decision 
within 30 days after the close of the hearing or of any 
rehearing or reargument or within such other period as the 
superintendent for good cause may require, but not to exceed 
an 
additional 
days. 
In the order 
or decision, 
the 
superintendent shall either approve or disapprove the rate 
filing. 
If the superintendent disapproves the rate filing, 
the superintendent shall establish the date on which the 
filing is 
no 
longer 
effective, 
specify 
the 
filing 
the 
superintendent would approve and authorize the insurer to 
submit a 
new fi 1 ing in accordance with the terms of the 
order or decision. 
E. 
Any filing of rates, rating formulas and modifications 
that satisfies the criteria set forth in this paragraph is 
subject to the provisions of paragraph F: 
(1) 
The rate increase for any group or subgroup does 
not exceed the index of inflation multiplied by 1. 5, 
excluding any approved rate differential based on age. 
For 
the 
purposes 
of 
this 
subsection, 
"index 
of 
inflation" means the rate of increase in medical costs 
for 
a 
section of the United States selected by the 
superintendent that includes this State for the most 
recent l2-month period immediately preceding the date 
of the filing for which data are available; and 
(2) 
The 
carrier 
demonstrates 
in 
accordance 
with 
generally accepted actuarial principles and practices 
consistently applied that, as of a date no more than 
days prior to the filing, the ratio of benefits 
incurred to premiums earned averages no less than 87.5% 
for the previous l2-month period. 
F. 
Any rate hearing conducted with respect to filings that 
meet 
the 
criteria 
in 
paragraph 
E 
is 
subject 
to 
this 
paragraph. 
(1) 
Any person reguesting a hearing shall provide the 
superintendent with a written statement detailing the 
circumstances that justify a hearing, notwithstanding 
the satisfaction of the criteria in paragraph E. 
(2) 
If the superintendent decides to hold a hearing, 
the 
superintendent 
shall 
issue 
a 
written 
statement 
detailing the circumstances that justify a 
hearing, 
notwithstanding the satisfaction of the criteria in 
paragraph E. 
(3) 
In any hearing conducted under this subsection, 
the bureau and any party asserting that the rates are 
excessive have 
the burden of establishing that the 
rates are excessive. 
The burden of proving that rates 
are adeguate and not unfairly discriminatory remains 
with the carrier. 
2-C. 
Optional guaranteed loss ratio. 
At 
the carrier's 
option, rate filings for a credible block of small group health 
plans may be filed in accordance with this subsection instead of 
subsection 2-B. 
Rates filed in accordance with this subsection 
are filed for informational purposes. 
A. 
A block of small group health plans is deemed credible 
if the antiCipated number of member months for which the 
rates will be in effect is at least L 000 or if it meets 
credibility 
standards 
adopted 
by 
the 
superintendent 
by 
rule. 
The rate filing must state the anticipated number of 
member months for which the rates will be in effect and the 
basis for the estimate. 
If the superintendent determines 
that the number of member months is likely to be less than 
1,000 
and 
the 
block 
does 
not 
satisfy 
any 
alternative 
credibility standards adopted by rule, the filing is subject 
to subsection 2-B. 
B. 
Within 7 months after the end of the period for which 
rates are in effect. the carrier shall file a report witl1 
the superintendent showing aggregate earned premiums 
and 
incurred claims for the period the rates were in effect. 
Incurred claims must include claims paid to a date 6 months 
after the end of the period for which rates were in effect 
and an estimate of unpaid claims. 
The report must state how 
the unpaid claims estimate was determined. 
c. 
If 
incurred 
claims 
were 
less 
than 
80% 
of 
earned 
premiums, 
the carrier shall refund 
a 
percentage of 
the 
premium to an entity or person that paid the premium. 
The 
percentage must be the same for all gr~ and subgroups and 
must 
be 
calculated as 
the ratio of excess 
premiums 
to 
aggregate 
earned 
premiums. 
Excess 
premiums 
must 
be 
calculated by dividing the aggregate incurred claims by 0.8 
and subtracting the result from aggregate earned premiums. 
The total of all refunds must equal the excess premiums. 
D. 
The superintendent may require further support for the 
unpaid 
claims 
estimate 
and 
may 
require 
refunds 
to 
be 
recalculated if the estimate is found to be unreasonably 
large. 
E. 
The 
superintendent 
may 
adopt 
rules 
setting 
forth 
appropriate 
methodologies 
regarding 
reports, 
refunds 
and 
credibility standards pursuant to this subsection. 
Rules 
adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. D-9. 24-A MRSA §2839, as amended by PL 1985, c. 648, 
§ll, is further amended to read: 
§2839. 
Rates filed 
No policy of group health insurance may be delivered in this 
State until a 
copy of the group manual rates to be used in 
calculating the premium for these policies has been filed for 
informational purposes with the superintendent. Notwithstanding 
this section, rates for group Medicare supplement, nursing home 
care or 
long-term care insurance contracts must be filed in 
accordance with section 2736 and rates for small group health 
plans as defined by section 2808-B must be filed in accordance 
with that section. 
Sec. D-IO. 24-A MRSA §2839-B is enacted to read: 
~839-B. Large group rates 
1. 
Application. 
This 
section 
applies 
to 
group 
health 
i.uQsurance offered in the large group market as defined in section 
2850-B, 
except 
insurance 
covering 
only 
accidental 
~nJury, 
specified disease, hospital indemnity, dental, vision, disability 
income, 
long-term care, 
Medicare 
supplement or other limited 
benefit health insurance. 
2. 
Annual filing. 
Every carrier offering group health 
insurance specified in subsection 1 shall annually file with the 
superintendent on or before April 30th a certification signed by 
a member in good standing of the American Academy of Actuaries or 
a successor organization that the carrier' s rating methods and 
practices are in accordance 
wi~n generally accepted actuarial 
principles 
and 
with 
the 
applicable 
actuarial 
standards 
of 
practice as promulgated by an actuarial standards board. 
The 
filing must also certify that the carrier has not reflected cost 
to the group health carrier of the recovery amount applied in 
accordance with section 6920. 
The filing also must state the 
number of policyholders and dependents, as of the close of the 
~~ceding calendar year, enrolled in large group health insurance 
plans offered by the carrier. A filing and supporting information 
are----P..lli;>lic records except as provided by Title 1, section 402, 
subsection 3. 
3. 
Documentation. 
Every carrier shall maintain at its 
principal place of business a complete and detailed description 
of its rating practices, including information and documentation 
that demonstrates that its rating methods and practices are in 
accordance with generally accepted actuarial principles and with 
the applicable actuarial standards of practice as promulgated by 
an actuarial standards board. 
Sec. D-l1. 24-A MRSA §4207, sub-§5, as repealed and replaced 
by PL 1993, c. 645, Pt. A, §6, is amended to read: 
5. 
A schedule or an amendment to a schedule of charge for 
enrollee health coverage for health care services may not be used 
by any health maintenance organization unless it complies with 
section 2736, 2808-B or 2839, whichever is applicable. 
Sec. D-12. Effective date. 
That section 
amends 
the Maine Revised Statutes, Title 
subsection 2-A takes effect January 1, 2005. 
of this Part 
24-A, 
section 
that 
2436, 
PARTE 
Sec. E·1. 32 MRSA §2599·C is enacted to read: 
§2599-C. 
Consumer information 
Each osteopathic physician in private practice shall post a 
~able public notice of the average charges and average payment 
accepted from payors other than Medicare and MaineCare for the 
most 
common 
services 
and 
procedures 
provided 
in physicians' 
offices in this State, as specified by the Maine Health Data 
Organization in accordance with Title 22, section 8711. 
This 
notice must be posted in a public area of the physician's office. 
Sec. E·2. 32 MRSA §3299·B is enacted to read: 
§3299-B. 
Consumer information. 
A physician in private practice shall post a readable public 
notice of the average charges and average payment accepted from 
payors other than Medicare and MaineCare for the most common 
services and procedures provided in physicians' offices in this 
State, as specified by the Maine Health Data Organization in 
accordance with Title 22, 
section 8711. 
This notice must be 
posted in a public area of the physician's office. 
PARTF 
Sec. F·l. Voluntary limits to control growth of insurance and health 
care costs. 
1. 
Purpose. 
The 
cost of health care 
and health care 
coverage in this State is growing at a rate that is unaffordable 
or unsustainable for many residents of the State. There is a 
pressing need to mitigate the rate of increases in these costs in 
order to avert increases in loss of health care coverage and to 
protect access to health care services. 
The purpose of this 
section 
is 
to 
encourage 
health 
care 
providers 
and 
health 
insurance carriers to voluntarily restrain the rate of increases 
in costs. 
2. 
context 
Definitions. 
As 
used 
in 
otherwise 
indicates, 
the 
following meanings. 
this 
section, 
unless 
following 
terms 
have 
the 
the 
A. 
"Health 
care 
provider" 
means 
any 
person, 
entity or 
facility providing health care services in this State. 
B. 
"Health insurance provider" means any nonprofit health 
or medical services organization as defined in the Maine 
Revised 
Statutes, 
Title 
24, 
any 
person 
engaged 
in 
the 
provision of health insurance and any person engaged in the 
provision of reinsurance for health insurers. 
3. 
Voluntary limits on costs. 
The following constraints 
are called for: 
A. 
Each health care provider in this State is asked to 
voluntarily restrain increases in the charges imposed and 
the average payments assessed or accepted by that health 
care provider for the health care services provided by that 
health care provider to no more than 3% for a period of one 
year following the effective date of this section; and 
B. Each health care insurer licensed in this State is asked 
to voluntarily limit the pricing of products sold in this 
State 
to 
that 
level 
that 
supports 
no 
more 
than 
a 
3% 
underwriting gain for a period of one year following the 
effective date of this section. 
4. 
Compliance. 
The State shall monitor compliance with the 
voluntary effort described in sUbsection 3. If r 
on a statewide 
basis, 
average 
charges 
or 
average 
payments 
for 
health 
care 
providers and average underwriting gain for insurance providers 
exceed 3% for the one-year period following the effective date of 
this 
section, 
the 
Governor's office shall develop plans 
for 
implementation of provider rate-setting systems, global budgeting 
systems and more stringent insurance rate regulation. 
PART G 
Sec. G-l. Medicare and veterans' health care. The Governor shall 
engage in active negotiations with the Federal Government to 
increase 
access 
veterans in this 
reimbursement for 
Part 
A 
of 
to 
federally 
sponsored 
health 
State and to increase the rates 
the State's health care providers. 
SUMMARY 
services 
for 
of Medicare 
the 
bill 
establishes 
Dirigo 
Health 
as 
an 
independent 
agency 
of 
State 
Government. 
It seeks 
to 
make 
affordable health insurance available to small businesses and 
individuals, 
provide 
additional 
assistance 
to 
employees 
and 
individuals with earnings 
below 
300°'0 
of 
the 
federal 
poverty 
guidelines and establishes the Maine Quality Forum to improve the 
quality of care in this State. 
Part B requires the 
Health Plan and establishes 
development of the plan. 
Governor 
to issue 
a 
biennial State 
an advisory council to assist in the 
Part C ties the administration of the certificate of need 
process to the State Health Plan and the capital investment 
fund. 
It 
further 
seeks 
to 
strengthen 
the 
public 
database 
administered by the Maine Health Data Organization. 
Part D requires insurers in the small group market to submit 
to the Superintendent of Insurance the same rate information that 
insurers in other markets are required to provide. 
Part E requires certain health care providers to provide 
consumer information. 
Part F establishes voluntary constraints on health care cost 
increases. 
Part G requires the Governor to work to 
care for veterans and to 
improve Medicare 
Maine providers. 
improve access to 
reimbursements 
for