An Act To Modify Savinqs Offset Payments and To Clarify Certain Other Provisions of the Diriqo Health Act Further amend the bill by striking out everything after the title and before the summary and inserting in its place the fOllowing: Emergency preamble. Whereas, acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and Whereas, this legislation needs to be enacted immediately to ensure the sustainability of Dirigo Health; and Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Maine Legislature, Session 122, LD 1577
Committee Amendment CA_B_S360 (Senate)
Amends: 24-A MRSA §6903, 24-A MRSA §6908, 24-A MRSA §6911, 24-A MRSA §6912, 24-A MRSA §6913, 24-A MRSA §69, 24-A MRSA §6914, 22 MRSA §3174-V, 22 MRSA §3174-D, 24-A MRSA §6906, 24-A MRSA §6971

COMMITTEE AMENDMENT ,8 to S. P. 555, L. D. 
Act To Modify the Calculation and Implementation 
Offset Payments under the Dirigo Health Act" 
1577, Bill, "An 
Date of Savings 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Modify Savinqs Offset Payments and To Clarify Certain 
Other Provisions of the Diriqo Health Act' 
Further amend the bill by striking out everything after the 
title and before the 
summary and inserting in its place the 
fOllowing: 
'Emergency preamble. Whereas, acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, this legislation needs to be enacted immediately to 
ensure the sustainability of Dirigo Health; and 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Page l-LR1479(3) 
COMMITTEE AMENDMENT 
~fO· 
~. 
COMMITTEE AMENDMENT ~ 
to S.P. 555, L.D. 1577 
Sec. A-I. 24-A MRSA §6903, sub-§4, as enacted by PL 2003, c. 
469, Pt. A, §8, is repealed. 
Sec. A-2. 24-A MRSA §6903, sub-§4-A is enacted to read: 
4-A. 
Dirigo Health Program. 
"Dirigo Health Program" means 
the program of services provided by Dirigo Health that includes 
comprehensive 
health 
benefits 
coverage, 
subsidies, 
wellness 
programs and quality improvement initiatives. 
Sec. A-3. 24-A MRSA §6908, sub-§4, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
4. 
Audit. 
Dirigo Health must be audited annually by the 
State Auditor. 
The board 
maYr--~-~~~-a45eEe~ie»r shall also 
arrange for an independent audit to be conducted annually. A copy 
of 
~Re ~ 
audit must be provided to the State Controller, to 
the 
superintendent, 
to the 
joint standing 
committee 
of 
the 
Legislature having jurisdiction over appropriations and financial 
affairs, 
to the joint standing committee of the Legislature 
having jurisdiction over insurance and financial services matters 
and to the joint standing committee of the Legislature having 
jurisdiction over health and human services matters. 
Sec. A-4. 24-A MRSA §6908, sub-§12 is enacted to read: 
12. Jurisdiction. 
The 
joint standing 
committee 
of 
the 
Legislature 
having 
jurisdiction 
over 
insurance 
matters 
has 
legislative 
oversight 
and 
jurisdiction, 
including 
financial 
oversight. over Dirigo Health. 
Sec. A-5. 24-A MRS A §6910, as corrected by RR 2003, c. 1, 
§22, is amended to read: 
§6910. Diriqo Hea1th Program 
1. 
Dirigo Hea1th Program. 
Dirigo Health shall arrange for 
the provision of health benefits coverage through the Dirigo 
Health IRs\u:a»ee Program not later than October 1, 2004. 
The 
Dirigo Health IRsli!'aRee Program must comply with all relevant 
requirements of this Title. 
Dirigo Health 
~RSQ!'aRee Program 
coverage may be offered by health insurance carriers that apply 
to the board and meet qualifications described in this section 
and any additional qualifications set by the board. 
2. 
Legislative approval of nonprofit health care plan or 
expansion of public plan. 
If health insurance carriers do not 
apply to offer 
and deliver Dirigo 
Health 
IRSQFaRee 
Program 
coverage, the board may have Dirigo Health provide access to 
health insurance by proposing the establishment of a nonprofit 
COMMITTEE AMENDMENT 
;; 
~fO· 
... ~ 
COMMITTEE AMENDMENT ~ 
to S.P. 555, L.D. 1577 
health care plan organized 
under Title 
l3-B 
and 
authorized 
pursuant to Title 24, chapter 19 or by proposing the expansion of 
an existing public plan. If the board proposes the establishment 
of a nonprofit health care plan or the expansion of an existing 
public plan, the board shall submit its proposal, including, but 
not limited to, 
a funding mechanism to capitalize a nonprofit 
health care plan and any recommended legislation to the joint 
standing committee of the Legislature having jurisdiction over 
health insurance matters. Dirigo Health may not provide access to 
health insurance by establishing a nonprofit health care plan or 
through an existing public plan without specific legislative 
approval. 
3. 
carrier 
Carrier participation requirements. 
To 
qualify 
as 
a 
of D i r igo He al th 
~B6\:lt aBee 
""P-"r,-,o<..;g;Lr"-",,am=---,=c,,,o,-,v,-,e,,-,r~a';lg=e , 
a 
he al th 
insurance carrier must: 
A. 
Provide the comprehensive health services and benefits 
as determined by the board, 
including a standard benefit 
package that meets the requirements for mandated coverage 
for specific health services, 
specific diseases 
and for 
certain providers of health services under Title 24 and this 
Title and any supplemental benefits the board wishes to make 
available; and 
B. 
Ensure that: 
(1) 
Providers contracting with a carrier contracted to 
provide coverage to plan enrollees do not charge plan 
enrollees 
or 
3rd 
parties 
for 
covered health 
care 
services in excess of the amount allowed by the carrier 
the provider has contracted with, except for applicable 
copayments, deductibles or coinsurance or as provided 
in section 4204, subsection 6; 
(2) 
Providers contracting with a carrier contracted to 
provide coverage to plan enrollees do not refuse to 
provide services to a plan enrollee on the basis of 
health status, medical condition, 
previous insurance 
status, 
race, 
color, 
creed, 
age, 
national 
origin, 
citizenship 
status, 
gender, 
sexual 
orientation, 
disability or marital status. 
This subparagraph may 
not be 
construed to require 
a 
provider to furnish 
medical services that are not within the scope of that 
provider's license; and 
(3) 
Providers contracting with a carrier contracted to 
provide coverage to plan enrollees are reimbursed at 
the negotiated reimbursement rates between the carrier 
and its provider network. 
COMMITTEE AMENDMENT 
~~ 
. 
... 
COMMITTEE AMENDMENT B· to S.P. 555, L.D. 1577 
Health insurance carriers that seek to qualify to provide Dirigo 
Health lasl:u;:aaee Program coverage must also qualify as health 
plans in Medicaid. 
4. 
Contractinq authority. 
Dirigo Health has contracting 
authority 
and 
powers 
to 
administer 
Dirigo 
Health 
IasQFaaee 
Program coverage as set out in this subsection. 
A. 
Dirigo 
Health 
may 
contract 
with 
health 
insurance 
carriers licensed to sell health insurance in this State or 
other private or public ~hiFa-paF~y 3rd-party administrators 
to provide Dirigo Health IasQFaaee Program coverage. 
In 
addition: 
(1) 
Dirigo Health shall issue requests for proposals 
from health insurance carriers; 
(2) 
Dirigo Health may include quality improvement, 
disease 
prevention, 
disease 
management 
and 
cost-containment 
provisions 
in 
the 
contracts 
with 
participating health insurance carriers 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 
the 
Dirigo Health 
lasQFaaee 
Program, 
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 
laSQFaaee 
Program contract to provide Dirigo Health 
lasQFaaee 
Program 
benefits 
to 
plan 
enrollees 
not 
enrolled in MaineCare; 
(5) 
Dirigo 
Health 
may 
set 
administration and underwriting 
Health lasQFaaee Program; 
allowable 
rates 
for 
gains EaF the Dirigo 
(6) 
Dirigo Health may administer continuation benefits 
for eligible individuals from employers with 20 or more 
employees who have purchased health insurance coverage 
through 
Dirigo 
Health 
for 
the 
duration 
of 
their 
eligibility periods for continuation benefits pursuant 
to 
the 
federal 
Consolidated 
Omnibus 
Budget 
Reconciliation Act, Public Law 99-272, Title X, Private 
Health Insurance Coverage, Sections 10001 to 10003; aaa 
COMMITTEE AMENDMENT 
· 
~ro· 
~. ~ 
COMMITTEE AMENDMENT~" to S.P. 555, L.D. 1577 
(7) 
Dirigo 
Health 
may 
administer 
or 
contract 
to 
administer the United States Internal Revenue Code of 
1986, 
Section 125 plans for employers and employees 
participating 
in 
Dirigo 
Health, 
including 
medical 
expense 
reimbursement 
accounts 
and 
dependent 
care 
reimbursement accountsT; and 
(8) 
After December 
31, 
2006, 
Dirigo Health may not 
include in its contracts with carriers or 3rd-party 
administrators any experience modification program or 
other similar arrangement in which payments are made by 
Dirigo Health to the carrier or 3rd-party administrator 
to be set aside to cover unanticipated variance in 
claims experience. 
B. 
Dirigo Health shall contract with eligible businesses 
seeking assistance 
from 
Dirigo Health in arranging 
for 
health benefits coverage by the Dirigo Health 
±BsHFaBee 
Program for their employees and dependents as set out in 
this paragraph. 
(1) 
Dirigo Health may establish contract 
reporting 
forms 
and 
procedures 
necessary 
efficient administration of contracts. 
and other 
for 
the 
(2) 
Dirigo 
Health 
shall 
collect 
payments 
from 
participating employers and plan enrollees to cover the 
cost of: 
(a) 
The 
Dirigo 
Health 
±BSHFaBee 
enrolled employees and dependents in 
amounts determined by the board; 
Program 
for 
contribution 
(b) 
Dirigo Health's quality 
prevention, 
disease 
assurance, 
management 
disease 
and 
cost-containment programs; 
(c) 
Dirigo Health's administrative services; and 
(d) 
Other health promotion costs. 
(3) 
Dirigo Health shall establish the m~n~mum required 
contribution levels, not to exceed 60%, to be paid by 
employers toward the aggregate payment in subparagraph 
(2) and establish an equivalent minimum amount to be 
paid 
by 
employers 
or 
plan 
enrollees 
and 
their 
dependents who are enrolled in MaineCare. 
The minimum 
required contribution level to be paid by employers 
must be prorated for employees that work less than the 
number of hours of a full-time equivalent employee as 
COMMITTEE AMENDMENT 
~~. 
~~ " 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
determined 
by 
the 
employer. 
Dir igo 
Health 
may 
establish a separate minimum contribution level to be 
paid by employers toward coverage for dependents of the 
employers' enrolled employees. 
(4) 
Dirigo 
Health 
shall 
require 
participating 
employers 
to 
certify that at 
least 
75% 
of 
their 
employees that work 30 hours or more per week and who 
do not have other creditable coverage are enrolled in 
the 
Dirigo 
Health 
±BSQ~aBee Program 
and 
that 
the 
employer 
group 
otherwise 
meets 
the 
minimum 
participation requirements specified by section 2808-B, 
subsection 4, paragraph A. 
(5) 
Dirigo Health shall reduce the payment amounts for 
plan enrollees eligible for a 
subsidy under section 
6912 
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 6912 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 
±BSQ~aBee 
Program 
coverage 
for 
themselves and their dependents as set out in this paragraph. 
(1) 
Dirigo Health may establish contract 
reporting 
forms 
and 
procedures 
necessary 
efficient administration of contracts. 
and other 
for 
the 
(2) 
Dirigo Health may collect payments from eligible 
individua~s 
participating 
in 
the 
Dirigo 
Health 
±BSQ~aBee Program to cover the cost of: 
(a) 
Enrollment in the Dirigo Health 
±BSQ~aBee 
Program for eligible individuals and dependents; 
(b) 
Dirigo Health's quality 
prevention, 
disease 
cost-containment programs; 
assurance, 
management 
disease 
and 
COMMITTEE AMENDMENT 
.~~".. 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
(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 6912 
accordingly. 
(4) 
Dirigo 
Health 
may 
require 
that 
eligible 
individuals 
certify 
that all 
their 
dependents 
are 
enrolled in the Dirigo Health ±asaFaaee Program 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. 
5. 
Enrollment in Diriqo Health Program. 
Dirigo Health 
shall 
perform, 
at 
a 
ml.nl.mum, 
the 
following 
functions 
to 
facilitate enrollment in ~ 
Dirigo Health ±asaFaaee Program. 
A. 
Dirigo Health shall publicize the availability of the 
Dirigo Health ±asaFaaee Program to businesses, self-employed 
individuals and others eligible to enroll in the Dirigo 
Health ±asaFaaee Program. 
B. 
Dirigo Health shall screen all eligible individuals and 
employees for eligibility for subsidies under section 6912 
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 
COMMITTEE AMENDMENT 
.~ 
~ 
COMMITTEE AMENDMENT :B .. to S.P. 555, L.D. 1577 
as an application for Dirigo Health, 
MaineCare. 
MaineCare must make the 
eligibility for MaineCare. 
for a subsidy and for 
final determination of 
C. 
Except as provided in this paragraph, the effective date 
of 
coverage 
for 
a 
new 
enrollee 
in 
the 
Dirigo 
Health 
Ias1:iFaaee Program is the first day of the month following 
receipt of the fully completed application for that enrollee 
by the carrier contracting with Dirigo Health or the first 
day of the next month if the fully completed application is 
received by the carrier within 10 calendar days of the end 
of the month. 
If a 
new enrollee in the Dirigo Health 
Ias1:iFaaee Program had prior coverage through an individual 
or small group policy, 
coverage under the Dirigo Health 
Ias1:iFaaee 
Program 
must 
take 
effect 
the 
day 
following 
termination of that enrollee's prior coverage. 
6. 
Quality 
improvement, 
disease 
management 
and 
cost 
containment. 
Dirigo Health shall promote quality improvement, 
disease 
prevention, 
disease 
management 
and 
cost-containment 
programs as part of its administration of the Dirigo Health 
Ias1:iFaaee Program. 
Sec. A-6. 24-A MRSA §6911, as enacted by PL 2003, c. 469, 
Pt. A, §8 and amended by c. 689, Pt. B, §6, is further amended to 
read: 
§69l1. Coordination with MaineCare 
The Department of Health and 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 the 
Dirigo Health tas1:iraaee Program. 
An individual participating in 
the Dirigo Health Program who 
applies for 
and is determined 
eligible for MaineCare is enrolled directly in MaineCare. 
Sec. A-7. 24-A MRSA §6912, first~, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
Dirigo Health may establish Sliding-scale subsidies for the 
purchase of Dirigo Health IaS1:iFaaee Program coverage paid by 
eligible individuals or employees whose income is under 300'l-o of 
the 
federal 
poverty 
level 
aaa--~-~~--Re~--~~~~~--~er 
MaiaeGaFe. 
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% of the federal poverty level aaa-wae 
aFe--~~-~~~~~-~~--MaiaeGaFe. 
Any 
experience modification 
COMMITTEE AMENDMENT 
f 
ttto· 
~~ ~ 
COMMITTEE AMENDMENT .~ to S.P. 555, L.D. 1577 
program or other similar arrangement between Dirigo Health and a 
carrier or 3rd-party administrator under contract with Dirigo 
Health to provide the Dirigo Health Program in which payments are 
made by Dirigo Health to the carrier or 3rd-party administrator 
to 
be 
set aside 
to 
cover 
unanticipated variance in claims 
experience may not be considered a subsidy and must be considered 
a general administrative expense of Dirigo Health. 
Sec. A-S. 24-A MRSA §6912, sub-§2, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
2. 
Eligibility for subsidy. 
IBaivia~a±6 To be eligible for 
a subsidy an individual or employee must: 
A. 
Rave Be enrolled in the Dirigo Health Program, have an 
income 
under 
300% 
of 
the 
federal 
poverty level, 
be 
a 
resident of the StateT-~~~~~~~-~--Ma~&eGar&-eeve~a~e 
aBa-Be-~~~~~;r~~r~-~a~~&-IBS~~aBee and, for policies 
issued or renewed on or after January 1, 2006, have assets 
under 300% of the asset limit for MaineCare eligibility; or 
B. 
Be enrolled in a health plan of an employer with more 
than 50 employees, have an income under 300% of the federal 
poverty level and, 
for policies issued or renewed on or 
after July 1, 
2006, have assets under 
300°1> of the asset 
limit for MaineCare eligibility. 
The health plan must meet 
any criteria established by Dirigo Health. 
The individual 
must meet other eligibility criteria established by Dirigo 
Health. 
Sec. A-9. 24-A MRSA §6912, sub-§6, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
6. 
Report. 
Within 
days 
after 
any 
subsidies 
are 
established pursuant to this section, the board shall report on 
the 
amount 
of 
the 
subsidies, 
the 
funding 
required 
for 
the 
subsidies 
and the estimated number of Dirigo Health Program 
enrollees eligible for the subsidies and submit the report to 
the 
joint 
standing 
committee 
of 
the 
Legislature 
having 
jurisdiction over appropriations and financial affairs, the joint 
standing committee of the Legislature having jurisdiction over 
insurance and financial services matters and the joint standing 
committee of the Legislature having jurisdiction over health and 
human services matters. 
Sec. A-10. 24-A MRSA §6913, sub-§1, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
1. 
Determination of cost savings. 
After an opportunity for 
a an adjudicatory hearing conducted pursuant to Title 5, chapter 
COMMITTEE AMENDMENT 
~~. 
~. 
COMMITTEE AMENDMENT ~" to S.P. 555, L.D. 1577 
375, 
subchapter 
4, 
the 
aeaFs 
superintendent shall determine 
annually not later than 
ApF:i:~ February the aggregate measurable 
cost savings in this State, including any reduction or avoidance 
of bad debt and charity care costs to health care providers :i:B 
~R:i:s-S~a~e as a result of the operation of Dirigo Health and any 
net 
savings 
from 
increased 
MaineCare 
enrollment 
due 
to 
an 
expansion in MaineCare eligibility occurring after June 30, 2004. 
Sec. A-II. 24-A MRSA §69I3, sub-§§2 and 3, as enacted by PL 
2003, c. 469, Pt. A, §8, are repealed and the following enacted 
in their place: 
2. 
Determination of savings offset amount. The board shall 
determine annually a savings offset amount to be paid by health 
insurance carriers. employee benefit excess insurance carriers 
and 
3rd-party 
administrators. 
not 
including 
carriers 
and 
3rd-party 
administrators 
with 
respect 
to 
accidental 
~nJury. 
specified disease. hospital indemnity. dental. vision. disability 
income. 
long-term care. 
Medicare 
supplement or other limited 
benefit health insurance. 
The board shall determine the savings 
offset amount in accordance with the following: 
A. 
Not later than February of each year. the board shall 
prospectively determine the savings offset amount to be 
applied during each l2-month period beginning July 1st of 
each year; 
B. To determine the savings offset amount. the board shall 
use the criteria and reports described in subsections 7 and 
.8.l. 
C. The savings offset amount must reflect and may not exceed 
aggregate measurable cost savings. 
as determined by the 
superintendent pursuant to subsection 1; and 
D. The savings offset amount calculation is limited to the 
amount of funds necessary to provide subsidies pursuant to 
section 
6912 
and 
to 
support 
the 
Maine 
Quality 
Forum 
established in section 6951 and may not include general 
administrative expenses of Dirigo Health. except for general 
administrative 
expenses 
of 
the 
Maine 
Quality 
Forum. 
Pursuant 
to 
section 
6912. 
the 
cost 
of 
any 
experience 
modification 
program 
or 
similar 
arrangement 
must 
be 
considered a general administrative expense. 
The savings offset amount determined by the board in accordance 
with this subsection is the determining factor for inclusion of 
savings offset payments in premiums through rate setting review 
by the bureau. 
COMMITTEE AMENDMENT 
ts.~ 
~~ 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
3. Savings offset payments required from health insurance 
carriers, 3rd-part,y administrators and employee benefit excess 
insurance 
carriers. 
Except 
for 
the 
carriers 
and 
3rd-party 
administrators that are specifically excluded in subsection 2, 
each 
health 
insurance 
carrier, 
3rd-party 
administrator 
and 
employee benefit excess insurance carrier shall pay a 
savings 
offset payment. 
The following provisions govern savings offset 
payments. 
A. 
The board shall calculate savings offset payments as a 
percentage of paid claims, as defined by the board pursuant 
to subsection 10. The board shall make reasonable efforts to 
ensure that paid claims are counted only once with respect 
to any savings offset payment. The board may verify each 
health insurance carrier's, 3rd-party administrator's and 
employee benefit excess insurance carrier's savings offset 
payment based on annual statements and other reports the 
board determines to be necessary. 
B. Maximum savings offset payments are as follows: 
(1) For health insurance carriers, the sayings offset 
payment may not exceed 4.0'" of annual paid claims for 
health care on policies issued pursuant to the laws of 
this State that insure residents of this State; 
(2) For 3rd-party administrators, the savings offset 
payment may not exceed 4.0'" of annual paid claims for 
health care for residents of this State; and 
(3) For employee benefit excess insurance carriers, the 
savings offset payment may not exceed 4.0," of annual 
paid 
claims 
on 
employee 
benefit 
excess 
insurance 
policies, 
as defined in section 707, 
subsection 1, 
paragraph C-1. 
issued pursuant to the laws of this 
State that insure residents of this State. 
C. 
A health insurance and employee benefit excess insurance 
carrier may not be required to pay a savings offset payment 
on policies or contracts insuring federal employees. 
D. 
Savings offset payments apply to claims paid for plan 
years beginning on or after July 1, 2006. 
E. Savings offset payments may not begin until July 1, 2006; 
F. Savings offset payments must be made quarterly and are 
due not less 60 days after the close of the quarter and with 
a minimum of 30 days' written notice by Dirigo 
Health to 
health insurance carriers, employee benefit excess insurance 
COMMITTEE AMENDMENT 
~~. 
~. 
COMMITTEE AMENDMENT I~ to S.P. 555, L.D. 1577 
carriers 
and 
3rd-party 
administrators 
and 
must 
accrue 
interest at 12~ per annum on or after the due date; 
G. Savings offset payments received by Dirigo Health may be 
pooled with other revenues of the agency in the Dirigo 
Health Fund established in section 6915: and 
H. 
Annual 
savings 
offset 
payments 
received 
must 
be 
reconciled by Dirigo Health. 
Any unused payments must be 
returned 
to 
health 
insurance 
carriers. 
3rd-party 
administrators 
and 
employee 
benefit 
excess 
insurance 
carriers according to a formula developed by the board. 
Sec. A-12. 24-A MRSA §6913, sub-§§4 and 6, as enacted by PL 
2003. c. 469, Pt. A, §a, are repealed. 
Sec. A-13. 24-A MRSA §6913, sub-§10 is enacted to read: 
10. Definition of paid claims; rulemating. 
The board shall 
adopt rules regarding the definition of paid claims for the 
purposes 
of 
calculating 
sayings 
offset 
payments 
for 
health 
insurance carriers. 3rd-party administrators and employee benefit 
excess 
insurance 
carriers. 
Rules 
adopted 
pursuant 
to 
this 
subsection are major substantive rules as defined in Title 5, 
chapter 375. subchapter 2-A. 
Sec. A-14. 24-A MRSA §6914, as enacted by PL 2003, c. 469, 
Pt. A, §a, is amended to read: 
§6914. Intraqovernmental transfer 
Starting July 1, 2004, Dirigo Health shall transfer funds, 
as necessary, 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. 
~he-~~~~~-~-~~-isel~ae-me£~-~~~~~&-a 
savis~s-paymes~-affse~-p~~s~as~-~a-see~ias-991aT 
PARTB 
Sec. 
B-1. 
Savings 
offset 
payments 
working 
group. 
The 
Superintendent of Insurance shall convene 
a working group to 
advise the Board of Directors of Dirigo Health, referred to in 
this section as "the board," and the superintendent as provided 
in this section. 
1. Membership. 
The working group must include 
members 
representing the interests of insurers, self-insured entities and 
COMMITTEE AMENDMENT 
fl." 
~~ 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
3rd-party administrators and 5 members representing the interests 
of Dirigo Health. 
2. 
Convening 
of 
working 
group. 
The 
Superintendent 
of 
Insurance shall convene the first meeting of the working group 
within 15 days of the effective date of this Act. 
3. Duties. 
The working group has the following duties and 
deadlines: 
A. No later than September 1, 2005, the working group shall 
make a recommendation to the board regarding the definition 
of paid claims for the purpose of using paid claims as the 
base 
for 
savings 
offset 
payment 
assessments 
on 
health 
insurance carriers, 
3rd-party administrators and employee 
benefit 
excess 
insurance 
carriers 
and 
the 
process 
for 
implementing 
and 
invoicing 
savings 
offset 
payment 
assessments based on the 
recommended definition of paid 
claims; 
B. No later than October 31, 2005, the working group shall 
make a 
recommendation to the superintendent regarding the 
methodology 
for 
calculating 
aggregate 
measurable 
cost 
savings; and 
C. No later than December 31, 2005, the working group shall 
make a recommendation to the board regarding the definition 
of subsidy within the Dirigo Health Program and a funding 
strategy to cover Dirigo Health's administrative expenses. 
4. 
Technical assistance; 
facilitator. 
The 
Department 
of 
Professional and Financial Regulation, Bureau of Insurance shall 
provide technical assistance to the working group upon request. 
Meetings of the working group must be moderated by an independent 
facilitator selected by the Superintendent of Insurance. 
5. Monthly reports; notice of meetings. The working group 
shall provide monthly reports to the Joint Standing Committee on 
Insurance 
and 
Financial 
Services 
and 
shall notify 
committee 
members of each meeting of the working group. The monthly reports 
must include any recommendations the working group has made to 
the board pursuant to subsection 3. 
6. 
Termination 
of 
working 
group. 
terminates December 31, 2005. 
The 
working 
group 
Sec. B-2. Funding Dirigo Health administrative expenses. 
General 
administrative 
expenses 
of 
Dirigo 
Health, 
excluding 
administrative 
expenses 
directly 
associated 
with 
the 
Maine 
Quality Forum, established in the Maine Revised Statutes, Title 
Page l3-LR1479(3) 
COMMITTEE AMENDMENT 
ts." 
~~ 
COMMITTEE AMENDMENT~" to S.P. 555, L.D. 1577 
24-A, section 6951, may be covered by the remaining balance of 
the $53,000,000 in funds 
transferred from 
the unappropriated 
surplus of the General Fund to the Dirigo Health Fund pursuant to 
Public Law 2003, chapter 469, Part H, section 1 and may not be 
covered by savings offset payments in accordance with the Maine 
Revised 
Statutes, 
Title 
24-A, 
section 
6913, 
subsection 
2. 
Following receipt 
and 
review 
of 
the 
recommendations 
of the 
working group, established in section 1, 
regarding a 
funding 
strategy for Dirigo Health's administrative expenses and no later 
than February 15, 2006, the Board of Directors of Dirigo Health 
shall 
submit 
its 
recommendations, 
including 
any 
suggested 
legislation, for funding administrative expenses to the Joint 
Standing 
Committee 
on 
Insurance 
and 
Financial 
Services. 
Following receipt and review of the board's recommendation, the 
committee 
may 
report out 
a 
bill related to 
funding Dirigo 
Health's administrative expenses to the Second Regular Session of 
the 122nd Legislature. 
PARTe 
Sec. C-l. 22 MRSA §3174-V, sub-§2, as amended by PL 2003, c. 
469, Pt. A, §7, is further amended to read: 
2. 
Contracted services. 
When a federally qualified health 
center 
otherwise 
meeting 
the 
requirements 
of 
subsection 
contracts with a managed care plan or ~ 
Dirigo Health lBs~raBee 
Program for the provision of MaineCare services, the department 
shall reimburse that center the difference between the payment 
received by the center from the managed care plan or ~ 
Dirigo 
Health *Bs~raBee Program and 100% of the reasonable cost, reduced 
by 
the total 
copayments 
for 
which members 
are 
responsible, 
incurred in providing services within the 
scope 
of 
service 
approved 
by 
the 
federal 
Health 
Resources 
and 
Services 
Administration 
or 
the 
commissioner. 
Any 
such 
managed 
care 
contract must provide payments for the services of a center that 
are not less than the level and amount of payment that the 
managed care plan or .th.e. Dirigo Health 
*B6~raBee Program would 
make 
for 
services provided 
by 
an entity not defined as 
a 
federally qualified health center. 
Sec. C-2. 22 MRSA §3174-DD, as enacted by PL 2003, c. 469, 
Pt. A, §6, is amended to read: 
§3174-DD. Diriqo Health coveraqe 
The 
department 
may 
contract 
with 
one 
or 
more 
health 
insurance carriers to purchase Dirigo Health 
IBs~raBee Program 
coverage for MaineCare members who seek to enroll through their 
employers pursuant to Title 24-A, section 6910, subsection 4, 
COMMITTEE AMENDMENT 
• 
ts."O. 
~~ 
COMMITTEE AMENDMENT.B" to S.P. 555, L.D. 1577 
paragraph B. 
A MaineCare member who enrolls in a the Dirigo 
Heal th 
::fBSQFa:e-ee--El~aR Program as a member of an employer group 
receives 
full 
MaineCare 
benefits 
through 
the 
Dirigo 
Health 
::fRSQ~aBee 
Program. 
The 
benefits 
are 
delivered 
through 
the 
employer-based health plan, subject to nominal cost sharing as 
permitted by 
United States Code, 
Section 13960(2003) 
and 
additional coverage provided under contract by the department. 
Sec. C-3. 24-A MRSA §6903, sub-§§12 and 13, as enacted by PL 
2003, c. 469, Pt. A, §8, are amended to read: 
12. 
Participatinq emp1oyer. "Participating employer" means 
an eligible business that contracts with Dirigo Health pursuant 
to section 6910, subsection 4, paragraph B and that has employees 
enrolled in the Dirigo Health ::fBSQ~aBee Program. 
13. 
P1an enro11ee. 
"Plan enrollee" 
means 
an eligible 
individual or eligible employee who enrolls in the Dirigo Health 
::fRSQ~aBee 
Program 
through 
Dirigo 
Health. 
"Plan 
enrollee" 
includes 
an eligible employee 
who 
is eligible to enroll in 
MaineCare. 
Sec. C-4. 24-A MRSA §6906, as enacted by PL 2003, c. 469, 
Pt. A, §8, is amended to read: 
§6906. Prohibited interests of board members and emp10yees 
Board members 
and 
employees of Dirigo Health and their 
spouses 
and 
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 
the Dirigo Health 
::fRSQ~aRee Program on the same terms as others 
may 
under 
this 
chapter. 
This 
section 
does 
not 
prohibit 
corporations or other entities with which board members 
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 
board members abstain from voting on matters relating to that 
participation. 
Sec. C-S. 24-A MRSA §6908, sub-§I, 'C, as enacted by PL 2003, 
c. 469, Pt. A, §8, is amended to read: 
c. 
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 the 
Dirigo Health ::fRSQ~aBee Program; 
COMMITTEE AMENDMENT 
~~" 
COMMITTEE AMENDMENT ]3. to S.P. 555, L.D. 1577 
Sec. C-6. 24-A MRSA §6908, sub-§2, "C to F, as enacted by PL 
2003, c. 469, Pt. A, §8, are amended to read: 
C. 
Determine the comprehensive services and benefits to be 
included in .th§. Dirigo Health ~BSQE'aBee Program and develop 
the specifications for ~ 
Dirigo Health 
~BSQE'aBee Program 
in accordance with the provisions in section 6910. Within 30 
days of its determination of the benefit package to be 
offered through the Dirigo Health IBSQE'aBee 
Program, the 
board shall report on the benefit package, including the 
estimated premium and applicable coinsurance, deductibles, 
copayments and out-Of-pocket maximums, to the joint standing 
committee 
of 
the 
Legislature 
having 
jurisdiction 
over 
appropriations 
and financial affairs, the joint standing 
committee 
of 
the 
Legislature 
having 
jurisdiction 
over 
insurance 
and 
financial 
services matters 
and 
the 
joint 
standing committee of the Legislature having jurisdiction 
over health and human services matters; 
D. 
Develop 
and 
implement 
a 
program 
to 
publicize 
the 
existence of Dirigo Health and the Dirigo Health 
~BSQE'aBee 
Program and the eligibility requirements and the enrollment 
procedures for ~ 
Dirigo Health IBSQE'aBee Program and to 
maintain public awareness of Dirigo Health and the Dirigo 
Health IBSQE'aBee Program; 
E. 
Arrange the provision of Dirigo Health IBSQE'aBee Program 
benefit 
coverage 
to 
eligible 
individuals 
and 
eligible 
employees 
through 
contracts with 
one 
or 
more 
qualified 
bidders; 
F. Develop a high-risk pool for plan enrollees in the Dirigo 
Health IBSQE'aBee Program in accordance with the provisions 
of section 6971; and 
Sec. C-7. 24-A MRSA §6908, sub-§6, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
6. Annual report. 
Beginning September 1, 2004, and annually 
thereafter, the board shall report on the impact of Dirigo Health 
on the small group and individual health insurance markets in 
this 
State 
and 
any 
reduction 
in 
the 
number 
of 
uninsured 
individuals 
in 
the 
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 
IBSQE'aBee Program policies issued or renewed and Dirigo Health 
~BSQE'aBee Program premiums earned and claims incurred by health 
insurance carriers offering coverage under the Dirigo Health 
~BSQE'aBee Program. 
The board shall submit the report to the 
COMMITTEE AMENDMENT 
a.fto· 
~. 
COMMITTEE AMENDMENT .'E. to S.P. 555, L.D. 1577 
Governor, the joint standing committee of the Legislature having 
jurisdiction over appropriations and financial affairs, the joint 
standing committee of the Legislature having jurisdiction over 
health insurance and financial services matters and the joint 
standing committee of the Legislature having jurisdiction over 
health and human services matters. 
Sec. e-8. 24-A MRSA §6913, sub-§8, 1[A, as enacted by PL 2003, 
c. 469, Pt. A, §8, is amended to read: 
A. 
On a quarterly basis beginning with the first quarter 
after ~ 
Dirigo Health 
~BS\i~aBee Program begins offering 
coverage, 
the 
board 
shall 
collect 
and 
report 
on 
the 
following: 
(1) 
The 
total 
enrollment 
in 
the 
Dirigo 
Health 
~BS\i~aBee Program, 
including the number of enrollees 
previously under insured or uninsured, 
the 
number 
of 
enrollees previously insured, the number of individual 
enrollees and the number of enrollees enrolled through 
small employers; 
( 2 ) 
The total 
plans 
through 
employers; 
number 
large 
of enrollees 
employers 
covered in health 
and 
self-insured 
(3) 
The number of employers, both small employers and 
large 
employers, 
who 
have 
ceased 
offering 
health 
insurance 
or 
contributing 
to 
the 
cost 
of 
health 
insurance for employees or who 
have begun offering 
coverage on a self-insured basis: 
(4) 
The number of employers, both small employers and 
large 
employers, 
who 
have 
begun 
to 
offer 
health 
insurance or contribute to the cost of health insurance 
premiums for their employees; 
(5) 
The number of new participating employers in the 
Dirigo Health ~BS\i~aBee Program: 
(6) 
The number of employers ceasing to offer coverage 
through ~ 
Dirigo Health ~BS\i~aBee Program: 
(7) 
The duration of employers participating in the 
Dirigo Health ~BS\i~aBee Program; and 
(8) 
A comparison of actual enrollees in the Dirigo 
Health ~BS\i~aBee Program to the projected enrollees. 
COMMITTEE AMENDMENT 
.. 
~fO. 
COMMITTEE AMENDMENT~' to S.P. 555, L.D. 1577 
Sec. C-9. 24-A MRSA §6971, sub-§§2 and 3, as enacted by PL 
2003, c. 469, Pt. A, §8, are amended to read: 
2. 
Disease 
management. 
Dirigo 
Health 
shall 
develop 
appropriate disease management protocols, develop procedures for 
implementing those protocols and determine the manner in which 
disease management must be provided to plan enrollees in the 
high-risk pool. Dirigo Health may include disease management in 
its contract with participating carriers for ~ 
Dirigo Health 
IBSQ!'aBee Program pursuant to section 6910, contract separately 
with another entity for disease management services or provide 
disease management services directly through Dirigo Health. 
3. 
Report. 
Dirigo Health shall submit a report, no later 
than January 1, 2006, outlining the disease management protocols, 
procedures and deli very mechanisms used to provide services to 
plan enrollees. 
The report must also include the number of plan 
enrollees in the high-risk pool, the types of diagnoses managed 
within the high-risk pool, 
the claims experience within the 
high-risk pool 
and the 
number 
and type of claims 
exceeding 
$100,000 
for 
enrollees 
in 
the 
high-risk 
pool 
and 
for 
all 
enrollees in ~ 
Dirigo Health IBsQFaBee Program. 
The report 
must 
be 
submitted 
to 
the 
joint 
standing 
committee 
of 
the 
Legislature having jurisdiction over health insurance matters. 
The committee may make recommendations on the operation of the 
high-risk pool and may report out legislation to the Second 
Regular 
Session 
of 
the 
122nd 
Legislature 
relating 
to 
the 
high-risk pool. 
PARTD 
Sec. 
D-l. 
Appropriations and allocations. 
appropriations and allocations are made. 
The 
PROFESSIOIIAL ABD FDIARCIAL KEGULATIOII, DEPAR'DIEBT OF 
Bureau of Insurance 0092 
following 
Initiative: 
Allocates 
funds 
for 
the costs of measuring the 
aggregate cost savings from the operation of Dirigo Health and 
related MaineCare expansions, including the costs of acquiring 
the necessary actuarial, econometric and modeling expertise. 
0'.rBER SPECIAL REvEiWE FONDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
2005-06 
$250,000 
$250,000 
2006-07 
$100,000 
$100,000 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved.' 
Page l8-LR1479(3) 
COMMITTEE AMENDMENT 
y 
a.fO· 
... 
COMMITTEE AMENDMENT .. B to S.P. 555, L.D. 1577 
This 
report. 
clause. 
SUMMARY 
amendment 
replaces 
the bill 
and 
is 
The amendment adds an emergency preamble 
Part A of the amendment does the following. 
the 
minority 
and eme rgency 
1. 
It changes the term Dirigo Health Insurance to Dirigo 
Health Program and revises the definition accordingly. 
2. 
It requires that the Board of Directors of Dirigo Health 
arrange for an independent audit to be conducted in addi tion to 
the required audit by the State Auditor. 
3. 
It specifies 
the 
joint 
standing 
committee 
of 
the 
Legislature having jurisdiction over insurance matters as the 
committee of jurisdiction for Dirigo Health. 
4. 
It amends the Dirigo Health Act in several places to 
bring the law into compliance with federal requirements related 
to pooling of funds for providing a state match for federal 
Medicaid dollars. 
5. 
It specifies that any experience modification program, 
or other similar arrangement, between Dirigo Health and a carrier 
or 3rd-party administrator providing the Dirigo Health Program in 
which payments are made by Dirigo Health to the carrier or 
3rd-party administrator to be set aside to cover unanticipated 
variance in claims experience may not be considered a subsidy and 
must be considered a general administrative expense of Dirigo 
Health. It further specifies that after December 31, 2006, Dirigo 
Health 
may 
not 
include 
in its 
contracts 
with 
carriers 
or 
3rd-party administrators any experience modification program or 
other similar arrangement. 
6. 
It adds an asset limit to the eligibility criteria for a 
subsidy and sets the asset limit at 300'lt. of the asset limit for 
MaineCare eligibility. 
7. 
It allows for the pooling of savings offset payment 
revenue and clearly states that the calculation of the savings 
offset payment amount is limited to the amount of funds necessary 
to provide subsidies and to support the Maine Quality Forum and 
that the calculation may 
not 
include general 
administrative 
expenses of Dirigo Health. 
8. 
It shifts responsibility for the determination of cost 
savings from the Board of Directors of Dirigo Health to the 
Superintendent of Insurance. 
COMMITTEE AMENDMENT 
.,ttt 
~ 
COMMITTEE AMENDMENT .. ::8 to S.P. 555, L.D. 1577 
9.· It changes from premiums to paid claims the assessment 
base for savings offset payments required from health insurance 
carriers 
and 
employee benefit excess 
insurance 
carriers 
and 
establishes paid claims as the assessment base for savings offset 
payments required from 3rd-party administrators. 
10. 
It provides for savings offset payments to apply to 
claims paid on or after July 1, 2006, 12 months later than in 
current law, to reflect delays in the implementation of Dirigo 
Health. 
11. 
It specifies that rules regarding the definition of 
paid claims for the purpose of savings offset payments are major 
substantive rules. 
Part B of the amendment does the following. 
1. 
It establishes a 10-member working group, convened by 
the Superintendent of Insurance, to advise the Board of Directors 
of 
Dirigo 
Health 
and 
the 
superintendent 
on 
certain issues 
relating 
to 
savings 
offset 
payments. 
The 
group 
must 
make 
recommendations to the board regarding the definition of SUbsidy, 
the definition of paid claims and the process for calculating and 
invoicing paid claims and a funding strategy for Dirigo Health 
administrative expenses. 
The working group must also make 
a 
recommendation to the superintendent regarding the methodology 
for determining cost savings. 
The working group is required to 
provide monthly 
reports 
to 
the Joint Standing Committee 
on 
Insurance and Financial Services. 
2. 
It specifies that Dirigo Health agency may use the 
$53,000,000 in start-up funds it received pursuant to Public Law 
2003, chapter 469 to cover administrative expenses but may not 
cover those expenses with savings offset payments. It requires 
the Board of Directors of Dirigo Health, with input from the 
working group, to make 
recommendations to the Joint Standing 
Committee on Insurance and Financial Services regarding how to 
finance Dirigo Health's administrative expenses and authorizes 
the committee to report out a bill after reviewing the board's 
recommendation. 
Part C updates the Maine 
Revised Statutes, Title 
24-A, 
chapter 87 to reflect the change from Dirigo Health Insurance to 
Dirigo Health Program, as provided in Part A. 
FISCAl, NOTE REQUIRED 
(See Attached) 
COMMITTEE AMENDMENT 
Approved: 06/09/05 ~ae 
LD 1577 
LR 1479(03) 
An Act To Modify the Calculation and Implementation Date of Savings Offset Payments under the 
Dirigo Health Act 
Fiscal Note for Bill as Amended by Committee Amendment[B 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Projections 
2005-06 
2006-07 
2007-08 
Appropriations/Allocations 
Other Special Revenue Funds 
$250,000 
$100,000 
$100,000 
Revenue 
Other Special Revenue Funds 
($48,874,040) 
$0 
$0 
Fiscal Detail and Notes 
Projections 
2008-09 
$100,000 
$0 
Assumes the delay in the timing and other modifications to the Dirigo Health savings offset payment (SOP) would 
result in a reduction in the Part 1 Current Services baseline revenue assumptions for the Dirigo Health program for 
2005-06. Assumes any additional costs to the Dirigo Health agency in implementing this bill can be absorbed by the 
agency utilizing existing budgetary resources. Further assumes the Bureau of Insurance in the Department of 
Professional and Financial Regulation will require an additional Other Special Revenue Funds allocation for the 
additional requirements imposed under Sec. A-9 of the bill .. 
LR1479(3) - Fiscal Note - Page 1 of 1