An Act To Modify Savings Offset Payments and To Clarify Certain Other Provisions of the Dirigo 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_A_S359 (Senate)
Amends: 24-A MRSA §2735-A, 24-A MRSA §2839-A, 24-A MRSA §6903, 24-A MRSA §6908, 24-A MRSA §6911, 24-A MRSA §6912, 24-A MRSA §6913, 24-A MRSA §6914, 22 MRSA §3174-V, 22 MRSA §3174-D, 24-A MRSA §6906, 24-A MRSA §6971

COMMITTEE AMENDMENT ,A, to S.P. 555, L.D. 1577, Bill, "An 
Act To Modify the Calculation and Implementation Date of Savings 
Offset Payments under the Dirigo Health Act" 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Modify Savings Offset Payments and To Clarify Certain 
Other Provisions of the Dirigo 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(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~ to S.P. 555, L.D. 1577 
Sec. A-I. 24-A MRSA §2735-A, sub·§§l-A and 3 are enacted to 
read: 
I-A. 
Notice of rate filings or rate increase on existing 
policies 
renewed in calendar year 2006. 
Notwithstanding 
sUbsection 1, for existing policies renewed in calendar year 
2006, an insurer offering individual health plans as defined in 
section 2736-C 
for plan years beginning in 2006 must provide 
written notice by first class mail of a rate filing to all 
affected policyholders at least 30 days before the effective date 
of any proposed increase in premium rates or any proposed rating 
formula or classification of risks or modification of any formula 
or 
classification of 
risks. 
The 
notice 
must 
also 
inform 
policyholders of their right to request a hearing pursuant to 
section 229 or a special rate hearing pursuant to section 2736, 
subsection 4 or Title 24, section 2321, subsection 5. The notice 
must show the proposed rate and state that the rate is subject to 
regulatory approval. 
An increase in premium rates may not be 
implemented until 30 days after the notice is provided. 
This subsection is repealed January 1, 2007. 
3. 
Notice of rate increase on new business for calendar 
year 2006. Notwithstanding subsection 2, for new business quoted 
in calendar year 2006 by an insurer offering individual health 
plans as defined in section 2736-C, the insurer must disclose any 
rate increase that the insurer anticipates implementing wi thin 
the following 30 days. If the quote is in writing, the disclosure 
must also be in writing. If the increase is pending approval at 
the time of notice, the disclosure must include the proposed rate 
and state that it is subject to regulatory approval. 
If 
disclosure 
required by this subsection is not provided, 
an 
increase may not be implemented until at least 30 days after the 
date the quote is provided. 
This subsection is repealed January 1, 2007. 
Sec. A-2. 24-A MRSA §2839-A, sub-§§l-A and 3 are enacted to 
read: 
I-A. 
Notice of rate increase on existing policies renewed 
in calendar year 2006. Notwithstanding subsection 1, for existing 
policies renewed in calendar year 2006, an insurer offering group 
health insurance for 
2006 plan years, 
except for accidental 
injury, specified disease, hospital indemnity, disability income, 
Medicare 
supplement, 
long-term care or other limited benefit 
group health insurance, must provide written notice by first 
class mail of a rate increase to all affected policyholders or 
others who are directly billed for group coverage at least 30 
days before the effective date of any increase in premium rates. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT A" to S.P. 555, L.D. 1577 
An increase in premium rates may not be implemented until 30 days 
after the notice is provided. 
This subsection is repealed January 1, 2007. 
3. 
Notice of rate increase on new business for calendar 
year 2006. Notwithstanding subsection 2, for new business quoted 
in calendar 
year 
2006 
by 
an 
insurer offering group health 
insurance, except for accidental injury, specified disease, 
hospital 
indemnity, 
disability 
income, 
Medicare 
supplement, 
long-term care or other limited benefit group health insurance, 
quotes a rate for new business, the insurer must disclose any 
rate increase that the insurer anticipates implementing within 
the following 30 days. If the quote is in writing, the disclosure 
must also be in writing. If such disclosure is not provided, an 
increase may not be implemented until at least 30 days after the 
date the quote is provided. 
This subsection is repealed January 1, 2007. 
Sec. A-3. 24-A MRSA §6903, sub-§4, as enacted by PL 2003, c. 
469, Pt. A, §8, is repealed. 
Sec. A-4. 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-S. 24-A MRSA §6908, sub-§12 is enacted to read: 
•. 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-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: 
§6911. 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 
health plans in MaineCare that are providing coverage under the 
Dirigo Health IBSQ~aBee Program. 
An individual participating in 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ~ 
to S.P. 555, L.D. 1577 
the Dirigo Health Program who applies for and is determined 
eligible for MaineCare is enrolled directly in MaineCare. 
Sec. A-7. 24-A MRS A §6912, first 1, 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 IBsu.FaBee Program coverage paid by 
eligible individuals or employees whose income is under 300% of 
the· federal 
poverty 
level 
aBEl 
wae 
aFe 
Bet: 
eliljiale 
~eF 
MaiBe~aFe. 
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 aBEl wae 
aFe-Bet:-eliljiale-~eF-MaiBe~aFe. 
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. 
IBEliviElu.als 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 levelT and be a 
resident of the StateT ae iBeliljiale ~eF MaiBe~aFe eeveFalje 
aBa-ae-eBFellea-iB-QiFilje-Realt:a-IBsl:lFaBee; or 
B. 
Be enrolled in a health plan of an employer with more 
than 50 employees and have an income under 300% of the 
federal poverty level. 
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 MRS A §6912, sub-§6, as enacted by PL 2003, c. 
469, Pt. A, §s, is amended to read: 
6. 
Report. 
Within 30 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-tO. 24-A MRS A §6913, sub-§l, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
1. 
Determination of cost savings. 
After an opportunity for 
a an adjudicatory hearing conducted pursuant to Title 5, chapter 
375, subchapter 4, the board shall determine annually not later 
than April the aggregate measurable cost savings in this State, 
including any reduction or avoidance of bad debt and charity care 
costs to health care providers in eRie Seaee as a result of the 
operation of Dirigo Health and any increased MaineCare enrollment 
due to an expansion in MaineCare eligibility occurring after June 
30, 2004. 
Sec. A-H. 24-A MRSA §6913, 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 
1nJury, 
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 April of each year, 
the board shall 
prospectively determine the savings offset amount to be 
applied during each 12-month calendar year period: 
B. To determine the savings offset amount, the board shall 
use the criteria and reports described in subsections 7 and 
1lL 
C. The sayings offset amount must reflect and may not exceed 
aggregate measurable cost savings, as determined by the 
board 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. 
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 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
3. Savings offset papents required from health insurance 
carriers. 3rd-party 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 sayings 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 savings 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 4.0'1& of annual 
paid claims 
on employee benefit excess 
insurance 
policies, 
as defined in section 707, 
subsection 1, 
paragraph C-L 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 January 1, 2006. 
E. Savings offset payments may not begin until 12 months 
after 
Dirigo 
Health 
begins 
providing 
health 
insurance 
coverage: 
F. Savings offset payments must be made quarterly and are 
due not less than 60 days after the close of the quarter and 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
with a minimum of 30 days' written notice by Dirigo Health 
to 
health 
insurance 
carriers, 
employee 
benefit 
excess 
insurance carriers and 3rd-party administrators and must 
accrue interest at 12'10 per annum on or after the due date, 
except that: 
(1) For plan years beginning between January 1, 2006 
and March 31, 2006, both days inclusive, savings offset 
payments must be 
made monthly for January 2006, 
February 2006 and March 2006 and are due not less than 
days after the close of each of those calendar 
months: and 
(2) 
Savings 
offset 
payments 
for 
3rd-party 
administrators for groups of 500 or fewer members may 
be made annually not less than 60 days after the close 
of the plan year. 
G. Savings offset payments received by Dirigo Health must 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 to determine whether unused 
payments may 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, §8, are repealed. 
Sec. A-13. 24-A MRSA §6913, sub-§10 is enacted to read: 
10. Definition of paid claims; rulemaking. 
The board shall 
adopt rules regarding the definition of paid claims for the 
purposes of calculating savings offset payments 
for health 
insurance carriers, 3rd-party administrators and employee benefit 
excess insurance carriers due on or after January 1, 2007. 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, §8, is amended to read: 
§6914. Intragovernmental 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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~, to S.P. 555, L.D. 1577 
MaineCare for the purpose of providing a state match for federal 
Medicaid dollars. Dirigo Health shall annually set the amount of 
contribution. 
~ae e~aRs~e~ may Rae iRel~ee maRey eelleeeee as a 
saviR~s-paymeRe-e~~see-p~~s~aRe-ee-seeeieR-6913T 
PARTB 
Sec. 
B·l. 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," as provided in this section. 
1. Membership. 
The working group must include 5 members 
representing the interests of insurers, self-insured entities and 
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 shall make recommendations to 
advise the board on the following issues: 
A. 
The definition of "subsidy" within the Dirigo Health 
Program. This recommendation must be made no later than July 
15, 2005; 
B. 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. This recommendation must be made no later than 
July 15, 2005; 
C. The process for implementing and invoicing savings offset 
payment assessments based on the recommended definition of 
paid claims. This recommendation must be made no later than 
August 15, 2005; 
D. 
The 
board's 
proposed 
methodology 
for 
calculating 
aggregate measurable cost savings. This recommendation must 
be made no later than September 15, 2005; and 
E. 
A 
funding 
strategy 
to 
cover 
Dirigo 
Health's 
administrative expenses. This recommendation must be made no 
later than December 31, 2005. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ~ 
to S.P. 555, L.D. 1577 
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. Provisions governing first year of savings offset payments. 
1. Definition of paid claims; first assessment year_ 
The 
Board of Directors of Dirigo Health shall adopt rules regarding 
the definition of paid claims under section 1 of this Part for 
the calculation of savings offset payments for the first l2-month 
calendar year period of savings offset payments, referred to in 
this section as "the first assessment year," due from health 
insurance carriers, 3rd-party administrators and employee benefit 
excess insurance carriers pursuant to the Maine Revised Statutes, 
Title 24-A, section 6913. 
In adopting these rules, the board 
shall take into account the recommendations of the working group 
established under section 1 with respect to the definition of 
paid claims and the methodology for calculating and invoicing 
savings offset payment assessments based on paid claims. 
Rules 
adopted pursuant to this section are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A. For savings 
offset payments after the first assessment year, the board shall 
define paid claims through major substantive rulemaking in 
accordance with Title 24-A, section 6913, subsection 10. 
2. Time1ine. Notwithstanding any deadlines specified in the 
Maine Revised Statutes, Title 24-A, section 6913, the Board of 
Directors 
of Dirigo Health shall 
comply with the 
following 
deadlines for the first assessment year: 
A. No later than September 15, 2005, the board shall begin 
the adjudicatory hearing regarding aggregate measurable cost 
savings, as required by Title 24-A, section 6913, subsection 
1; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT I~' to S.P. 555, L.D. 1577 
B. No later than October 30, 2005, the board shall determine 
aggregate measurable cost savings, 
as required by Title 
24-A, section 6913, subsection 1; and 
C. No later than October 30, 2005, the board shall establish 
the amount of the savings offset payment, as required by 
Title 24-A, section 6913, subsection 2. 
Sec. B-3. 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 
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. 
PARTC 
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 the Dirigo Health IRsupaBee 
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 the Dirigo 
Health IBsupaBee 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 the Dirigo Health IssluaBee Program would 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
make 
for 
services provided by 
an entity not defined 
as 
a 
federally qualified health center. 
Sec. C-2. 
MRSA §3174-DD, as enacted by PL 2003, c. 469, 
Pt. A, §6, is amended to read: 
§3174-DD_ Dirigo Health coverage 
The 
department may contract with one or more health 
insurance carriers to purchase Dirigo Health ±BSlll'aBee Program 
coverage for MaineCare members who seek to enroll through their 
employers pursuant to Title 24-A, section 6910, subsection 4, 
paragraph B. 
A MaineCare member who enrolls in a the Dirigo 
Heal th ±BSlll'aBee plaB Program as a member of an employer group 
receives full MaineCare benefits through the Dirigo Health 
±BSlll'aBee 
Program. 
The 
benefits 
are delivered through 
the 
employer-based health plan, subject to nominal cost sharing as 
permitted by 42 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. 
Participating employer. "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 ±BSlll'aBee Program. 
13. 
Plan enrollee. 
"Plan enrollee" means an eligible 
individual or eligible employee who enrolls in the Dirigo Health 
±BSlll'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 employees 
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 ±BSlll'aBee 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 
Page l1-LRI479(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ~, to S.P. 555, L.D. 1577 
board members abstain from voting on matters relating to that 
participation. 
Sec. C-5. 24-A MRSA §6908, sub-§l, <JIC, 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 IBsa~aBee Program; 
Sec. C-6. 24-A MRSA §6908, sub-§2, <JI<JIC 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 the Dirigo Health IBsa~aBee Program and develop 
the specifications for the Dirigo Health IBSal'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 
IBsa~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 IBsa~aRee 
Program and the eligibility requirements and the enrollment 
procedures for the Dirigo Health IBsa~aBee Program and to 
maintain public awareness of Dirigo Health and the Dirigo 
Health IBsa~aBee Program; 
E. 
Arrange the provision of Dirigo Health IBsa~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 IBsu~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: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A· to S.P. 555, L.D. 1577 
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 
*as\i:r;:aaee Program policies issued or renewed and Dirigo Health 
*as\i:r;:aaee Program premiums earned and claims incurred by health 
insurance carriers offering coverage 
under 
the Dirigo Health 
*as\i:r;:aaee Program. 
The board shall submit the report to the 
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. C-8. 24·A MRSA §6910, as corrected by RR 2003, c. 1, 
§22, is amended to read: 
§6910. Diriqo Health Proqram 
1. 
Diriqo Health Proqram. 
Dirigo Health shall arrange for 
the provision of health benefits coverage through the Dirigo 
Heal th *as\i:r;:aaee Program not later than October 1, 2004. 
The 
Dirigo Health *as\i:r;:aaee Program must comply with all relevant 
requirements of this Title. 
Dirigo Health 
*as\i:r;:aaee 
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. 
Leqislative approval of nonprofit health care plan or 
expansion of public plan. 
If health insurance carriers do not 
apply to offer 
and 
deliver Dirigo 
Health 
*as\i:r;:aaee 
Program 
coverage, the board may have Dirigo Health provide access to 
health insurance by proposing the establishment of a nonprofit 
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. 
Page l3-LR1479(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A .. to S.P. 555, L.D. 1577 
3. 
Carrier participation requirements. 
To 
qualify as 
a 
carrier of Dirigo Health ~nsQ~anee Program coverage, a health 
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. 
Health insurance carriers that seek to qualify to provide Dirigo 
Heal th ~asQ~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 Insurance as set 
out in this subsection. 
A. 
Dirigo 
Health 
carriers licensed to 
other 
private 
or 
may 
contract with 
sell health insurance 
public 
third-party 
Page l4-LR1479(2) 
health 
insurance 
in this State or 
administrators 
to 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT A" to S.P. 555, L.D. 1577 
provide 
Dirigo 
Health 
~nsQ~anee Program 
coverage. 
addition: 
In 
(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 
prov~s~ons 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 
±nsQ~anee 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 
±nsQ~anee Program contract to provide Dirigo Health 
InsQ~anee Program benefits to plan enrollees not 
enrolled in MaineCare; 
(5) 
Dirigo 
Health 
may 
set 
allowable 
rates 
for 
administration and underwriting gains for the Dirigo 
Health InsQ~anee Program; 
(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; and 
(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 accounts. 
B. 
Dirigo Health shall contract with eligible businesses 
seeking assistance from Dirigo Health in arranging for 
health benefits coverage by the Dirigo Health 
±RSQ~anee 
Program for their employees and dependents as set out in 
this paragraph. 
Page l5-LR1479(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A, to S.P. 555, L.D. 1577 
(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) 
The 
Dirigo Health 
IBSQFaBee 
Program 
for 
enrolled employees and dependents in contribution 
amounts determined by the board; 
(b) 
Dirigo Health's quality assurance, 
prevention, 
disease 
management 
cost-containment programs; 
disease 
and 
(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 
determined 
by 
the 
employer. 
Dirigo 
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 
IBSQFaBee 
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. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT All to S.P. 555, L.D. 1577 
(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. 
(1) 
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 
IBSQ~aBee Program 
coverage 
for 
themselves and their 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 may collect payments from eligible 
individuals 
participating 
in 
the 
Dirigo 
Health 
IBSQ~aBee Program to cover the cost of: 
(a) 
Enrollment in the Dirigo Health IBSQl?aBee 
Program for eligible individuals and dependents; 
(b) 
Dirigo Health's quality assurance, disease 
prevention, 
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 6912 
accordingly. 
(4) 
Dirigo 
Health 
may 
require 
individuals 
certify that all 
their 
enrolled in the Dirigo Health IBSQ~aBee 
covered by another creditable plan. 
that 
eligible 
dependents 
are 
Program or are 
(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 12-month period 
immediately 
preceding 
the 
eligible 
individual's 
application. 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT A .. to S.P. 555, L.D. 1577 
(6) 
Dirigo Health may 
limit the 
number 
of plan 
enrollees. 
(7) 
Dirigo Health may establish other criteria for 
participation. 
5. 
Enrollment in Dirigo Health Program. 
Dirigo Health 
shall 
perform, 
at 
a 
m1n1mum, 
the 
following 
functions 
to 
facilitate enrollment in the Dirigo Health InSQFanee Program. 
A. 
Dirigo Health shall publicize the availability of the 
Dirigo Health InSQFanee Program to businesses, self-employed 
individuals and others eligible to enroll in the Dirigo 
Health InsQFanee 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 
as an application for Dirigo Health, for a subsidy and for 
MaineCare. 
MaineCare must make the final determination of 
eligibility for MaineCare. 
C. 
Except as provided in this paragraph, the effective date 
of 
coverage 
for 
a 
new enrollee 
in the 
Dirigo 
Health 
InsQFanee 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 
InsQFanee Program had prior coverage through an individual 
or small group policy, coverage under the Dirigo Health 
InSQFanee 
Program must 
take effect the 
day 
following 
termination of that enrollee's prior coverage. 
6. 
Quality 
improvement, 
disease 
Dlanaqement 
and 
cost 
containment. 
Dirigo Health shall promote quality improvement, 
disease 
prevention, 
disease 
management 
and 
cost-containment 
Page l8-LR1479(2) 
COMMITTEE AMENDMENT 
COMM1TTEE AMENDMENT ,,~, to S.P. 555, L.D. 1577 
programs as part of its administration of the Dirigo Health 
~nsaFanee Program. 
Sec. C-9. 24-A MRSA §6913, sub-§8, <J[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 the Dirigo Health 
~nsaFanee Program begins offering 
coverage, 
the board shall collect and report on the 
following: 
(1) 
The 
total 
enrollment 
in 
the 
Dirigo 
Health 
InsaFanee 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 number of enrollees covered in health 
plans 
through 
large 
employers 
and 
self-insured 
employers; 
(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 InsaFanee Program; 
(6) 
The number of employers ceasing to offer coverage 
through the Dirigo Health ~a&aFaaee Program; 
(7) 
The duration of employers participating in the 
Dirigo Health InsaFanee Program; and 
(8) 
A comparison of actual enrollees in the Dirigo 
Health InsaFanee Program to the projected enrollees. 
Sec. ColO. 
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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT A" to S.P. 555, L.D. 1577 
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 the Dirigo Health 
lasQFBaee 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 delivery 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 the Dirigo Health laSQFBaee 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 
l22nd 
Legislature 
relating 
to 
the 
high-risk pool. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved.' 
SUMMARY 
This 
amendment 
replaces the bill and is the majority 
report. 
The amendment adds an emergency preamble and emergency 
clause. 
Part A of the amendment does the following. 
1. 
It allows insurers, for the calendar year 2006, to give 
days' notice of changes in rates to policyholders instead of 
the 60 days' or 90 days' notice required under current law. 
2. It changes the term "Dirigo Health Insurance" to "Dirigo 
Health Program" and revises the definition accordingly. 
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. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~" to S.P. 555, L.D. 1577 
5. 
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. 
6. 
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. 
7. 
It provides for savings offset payments to apply to 
claims paid on or after January 1, 2006, 6 months later than in 
current law, to reflect delays in the implementation of Dirigo 
Health. It provides an exception to the quarterly savings offset 
payments for the first 3 months of 2006, during which time 
monthly savings offset payments, due not less than 60 days after 
the close of the month, are required for plan years starting 
during those months. It allows 3rd-party administrators for 
groups of 500 or fewer members to make savings offset payments 
annually. 
8. It specifies that rules regarding the definition of paid 
claims for the purpose of savings offset payments are major 
substantive rules after the first assessment year. During the 
first assessment year the rules are routine technical as provided 
in Part B of the amendment. 
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 on certain issues relating to savings offset 
payments, including the definition of "subsidy," the definition 
of "paid claims," the methodology for calculating and invoicing 
paid claims, the board's proposed methodology for calculating 
aggregate measurable cost savings and a funding strategy for 
Dirigo Health's administrative expenses. 
The working group is 
required to provide monthly reports to the Joint Standing 
Committee on Insurance and Financial Services. 
2. 
It provides a timeline for the start-up of savings 
offset payments, including deadlines for the determination of 
aggregate measurable cost savings and the amount of the savings 
offset payment. 
3. 
It specifies that Dirigo Health may use the $53,000,000 
in start-up funds it received pursuant to Public 
Law 
2003, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT A" to S.P. 555, L.D. 1577 
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 ~OTE REQLIRED 
(See attached) 
COMMITTEE AMENDMENT· 
• 
• 
Approved: 06/09/05 ~ae 
LD 1577 
LR 1479(02) 
An Act To Modify the Calculation and Implementation Date of Savings Offset Payments under the 
Dirigo Health Act 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment ,A, 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor revenue decrease - Other Special Revenue Funds 
Minor Cost Increase - Other Special Revenue Funds 
Modifications to the Dirigo Health savings offset payment (SOP) could result in a minor reduction in the Part 1 
Current Services baseline revenue assumptions of the Dirigo Health program. 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 any additional costs to the Department of Professional and Financial Regulation can be absorbed by 
the department utilizing existing resources. 
LR1479(2) - Fiscal Note - Page 1 of 1