An Act To Protect Health Insurance Consumers
Maine Legislature, Session 122, LD 1935
Senate Amendment SA_A_S676 (Senate)
Amends: 24-A MRSA §1906, 24-A MRSA §1909, 24-A MRSA §6913

SENATE AMENDMENT "A" to S.P. 736, L.D. 1935, Bill, "An Act 
To Protect Health Insurance Consumers" 
Amend the bill by striking out all of the emergency preamble 
(page 1, lines 1 to 31 in L.D.) 
Further amend the bill by inserting before section I 
the 
following: 
• Sec. 1. 24-A MRSA §1906, sub-§12 is enacted to read: 
12. 
An 
administrator must 
provide 
a 
notice to 
covered 
individuals of each plan sponsor, 
health care service plan, 
health maintenance organization or insurer for which it adjusts 
or 
settles 
claims 
regarding 
savings 
associated 
with 
Dirigo 
Health, established in chapter 87. 
Dirigo Health shall prepare 
and provide to each administrator a copy of the notice. 
For 
calendar year 2006, 
the notice must be mailed no later than 
September 30, 2006. 
A. 
The notice must contain, at a minimum, the amount of the 
aggregate measurable cost savings as determined pursuant to 
section 6913, subsection 1. 
B. 
Any notice or information by an administrator to covered 
individuals, in whatever manner conveyed, regarding Dirigo 
Health 
savings 
other 
than 
the notice 
reguired in this 
subsection must be deemed a violation of the laws governing 
trade practices and frauds in chapter 23. 
Page l-LR2809(20) 
SENATE AMENDMENT 
~<C,~·~t6' 
SENATE AMENDMENT ,t1 " to S.P. 736, L.D. 1935 
C. 
An 
administrator 
who 
fails 
to 
provide 
the 
notice 
required in this subsection is subject to a fine of $200 for 
each covered individual who would have received such notice 
but for the failure to provide it or who receives a notice 
that 
fails 
to 
comply 
with 
the 
requirements 
of 
this 
subsection. 
Sec. 2. 24-A MRSA §1909, sub-§ll is enacted to read: 
11. 
No amount of the savings offset payment, as established 
under section 6913, paid by an administrator may be paid out of 
charges, contributions or premiums made by or on behalf of a plan 
sponsor, 
health 
care 
service 
plan, 
health 
maintenance 
organization or insurer to the administrator. 
If at any time the 
superintendent has reason to believe that the payment of funds by. 
the administrator for the savings offset payment would frustrate 
the purposes of this subsection, the superintendent shall conduct 
an investigation and, upon determination of a violation of this 
subsection, shall reguire the administrator to return the funds 
to the plan. 
Upon application by 
an administrator, if the 
superintendent has reason to believe that the funds available to 
pay 
the 
savings 
offset 
payment 
may 
not 
be 
adeguate, 
the 
superintendent shall cause a hearing to be held to determine the 
amount and sources of funds available to the administrator to pay 
the savings offset payment and what relief is available.' 
Further amend the bill in section 1 
in paragraph F 
by 
inserting at the end the following: 
'(1) 
A carrier must provide a notice to insured policy 
holders and certificate holders in accordance with this 
paragraph. 
Dirigo Health, established in chapter 87, 
shall prepare and provide to each carrier a copy of the 
notice. 
For calendar year 2006, 
the notice must be 
mailed no later than September 30, 2006. 
(a) 
The notice must contain, at a minimum, the 
amount of the aggregate measurable cost savings as 
determined pursuant to section 6913. subsection 1. 
(b) 
Any notice or information by a carrier to 
insured policy holders and certificate holders, in 
whatever manner conveyed, regarding Dirigo Health 
savings other than the notice reguired in this 
subparagraph must be deemed a violation of the 
laws 
governing 
trade 
practices 
and 
frauds 
in 
chapter 23. 
SENATE AMENDMENT 
B 
SENATE AMENDMENT "A" to S.P. 736, L.D. 1935 
(c) 
A carrier who fails to provide the notice 
required in this subparagraph is subject to a fine 
of 
$200 
for 
each 
insured 
policy 
holder 
and 
certificate holder who would have received such 
notice but for the failure to provide it or who 
receive§ a notice that fail§ to comply with the 
requirements of this subparagraph.' 
Further amend the bill in section 2 
in paragraph D by 
inserting at the end the following: 
IB 
'(I) 
A carrier must provide a notice to insured policy 
holders and certificate holders in accordance with this 
subparagrft]?h. 
Dirigo Health. 
established in chapter 
87. shall prepare and provide to each carrier a copy of 
the notice. 
For calendar year 2006. the notice must be. 
mailed no later than September 30. 2006. 
(a) 
The notice must contain. at a minimum. the 
amount of the aggregate measurable cost savings as 
determined pursuant to section 6913. subsection 1. 
(b) 
Any notice or information by a carrier to 
insured policy holders and certifiCate holders. in 
whatever manner conveyed. regarding Dirigo Health 
savings other than the notice required in this 
subparagraph must be deemed 
a violation of the 
laws 
governing 
trade 
practices 
and 
frauds 
in 
chapter 23. 
(c) 
A carrier who fails to provide the notice 
required in this subparagraph is subject to a fine 
of 
$200 
for 
each 
insured 
policy 
holder 
and 
certificate holder who would have received such 
notice but for the failure to provide it or who 
receives a notice that fails to comply with the 
requirements of this subparagraph.' 
Further amend the bill in section 3 in subsection 2 by 
inserting at the end the following: 
'A. 
A carrier must provide a notice to insured policy 
holders 
and certificate holders in accordance with this 
paragrft]?h. 
Dirigo Health. established in chapter 87, shall 
prepare and provide to 
~ach carrier a copy of the notice. 
For calendar year 2006. the notice must be mailed no later 
than September 30. 2006. 
SENATE AMENDMENT 
SENATE AMENDMENT "A" to S.P. 736, L.D. 1935 
(1) 
The notice must contain, at a minimum, the amount 
of the aggregate measurable cost savings as determined 
pursuant to section 6913, subsection 1. 
(2) 
Any notice or information by a carrier to insured 
policy holders 
and certificate holders, 
in whatever 
manner conveyed, regarding Dirigo Health savings other 
than the notice reguired in this paragraph must be 
deemed 
a 
violation 
of 
the 
laws 
governing 
trade 
practices and frauds in chapter 23. 
(3) 
A carrier who fails to provide the notice reguired 
in this paragraph is subject to a fine of $200 for each 
insured policy holder and certificate holder who would 
have 
received 
such notice but 
for 
the 
failure 
to 
provide it or who 
receives 
a 
notice that fails to 
comply with the reguirements of this paragraph.' 
Further amend the bill by inserting after section 3 the 
following: 
'Sec. 4. 24-A MRSA §6913, sub-§I, ,A, as enacted by PL 2005, 
c. 400, Pt. A, §10, is amended to read: 
A. 
After an opportunity for a hearing conducted pursuant to 
Title 
5, 
chapter 
375, 
subchapter 
4, 
the 
board 
shall 
determine annually not later than April 1st the aggregate 
measurable 
cost 
savings 
contained 
in 
Public 
Law 
2003, 
cha,pter 469, including but not limited to any reduction or 
avoidance of bad debt and charity care costs to health care 
providers in this State 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, and any further cost savings initiatives adopted 
a,nd approved by the board for plan yea,rs beginning on or 
a,fter Ja,nuary 1, 2007.' 
Further amend the bill by inserting after section 5 the 
following: 
'Sec. 6. Fixed savings offset payment for plan years beginning 
January 1, 2006 to December 31, 2006. 
Notwithstanding the Maine 
Revised Statutes, Title 24-A, section 6913, subsection 1 to 3, 
the savings offset payment for plan years beginning January 1, 
2006 to December 31; 2006 must equal a total of $35,000,000 for 
all 
health 
insurance 
carriers, 
3rd-party 
administrators 
and 
employee 
benefit excess 
insurance carriers. 
For 
plan years 
beginning January 1, 
2006 to December 31, 
2006, the Board of 
Directors of Dirigo Health shall disregard the savings offset 
amount 
calculation 
set 
forth 
in 
Title 
24-A, 
section 
SENATE AMENDMENT 
SENATE AMENDMENT .. A 
.. to S.P. 736, L.D. 1935 
6913, 
subsection 
2. 
The 
savings offset payment established 
pursuant to this section must be paid in accordance with the 
schedule established in Title 24-A, section 6913, subsection 3, 
paragraph F. 
No later than 90 days after the effective date of 
this Act, all health insurance carriers shall file amended rate 
filings with the Superintendent of Insurance in accordance with 
this section. 
The 
savings offset payment set forth in this 
section applies retroactively to any savings offset payment that 
has been assessed and paid pursuant to Title 24-A, section 6913 
for plan years beginning January 1, 2006. 
No later than 30 days 
following the effective date of this Act, Dirigo Health shall 
issue refunds of, or credits for, any amounts collected in excess 
of the limitations established in this section. 
Sec. 
7. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
following 
PROFESSIONAL AND FIBABCIAL REGULATION, DEPARTMENT OF 
Bureau of Insurance 
0092 
Initiative: 
Allocates funds for the costs of implementing the 
3rd-party administrator provisions of the Dirigq Health Program 
savings offset payment. 
OTHER SPECIAL REVENUE FUNDS 
All Other 
2005-06 
$0 
2006-07 
$50,000 
OTHER SPECIAL REVENUE FUNDS TOTAL 
$0 
$50,000' 
Further amend the bill by striking out the emergency clause. 
Further amend the bill by relettering 
nonconsecutive 
Part 
letter 
or 
section 
consecutively. 
SUMMARY 
or renumbering any 
number 
to 
read 
This 
amendment 
makes 
the following changes 
to the 
laws 
governing Dirigo Health. 
1. 
It prohibits administrators from passing the costs of 
the savings offset payment to covered individuals. 
It gives the 
Superintendent of Insurance authority to provide relief to those 
administrators 
that 
demonstrate 
the 
funds 
available 
are 
inadequate. 
SENATE AMENDMENT 
SENATE AMENDMENT "A" to S.P. 736, L.D. 1935 
2. 
It requires health insurance carriers and administrators 
to notify insureds of the savings attributable to the Dirigo 
Health Program and Public Law 2003, chapter 469. 
3. 
It clarifies that aggregate measurable cost savings are 
not limited to bad debt and charity care but rather include all 
cost savings initiatives contained in Public Law 2003, chapter 
and further cost savings initiatives adopted and approved by 
the Board of Directors of Dirigo Health. 
4. 
It establishes a fixed amount of $35,000,000 as the 
savings offset payment for plan years beginning January 1, 2006 
to December 31, 2006. 
5. 
clause. 
It also removes the emergency preamble and emergency 
6. 
It adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
SPONSORED BY: ~.£: ~:J 
(Senator MAYO) 
I 
....... 
COUNTY: 
Sagadahoc 
SENATE AMENDMENT 
Approved: 05122/06 .Mac 
Appropriations/Allocations 
Other Special Revenue Funds 
Revenue 
Other Funds 
Fiscal Detail and Notes 
LD 1935 
LR2809(20) 
An Act To Protect Health Insurance Consumers 
Fiscal Note for Senate Amendment ,A" 
Sponsor:Sen.~ayo 
Fiscal Note Required: Yes 
Fiscal Note 
2005-06 
2006-07 
$0 
$50,000 
$0 
($8,700,000) 
Projections 
2007-08 
$50,000 
$0 
Projections 
2008-09 
$50,000 
$0 
By prohibiting third party administrators from passing on the savings offset payment (SOP), this amendment could 
result in saving to the State Employee Health Plan from the $2.9 million budgeted to pay for the SOP for FY 2006-07. 
The General Fund share of these savings would be approximately $1.2 million. The amendment provides for a review 
process that may still allow the third party administrator to pass on these costs. 
Assumes the Bureau of Insurance in the Department of Professional and Financial Regulation will require an 
additional Other Special Revenue Funds allocation of $50,000 for the additional costs related to the third party 
administrator provisions of this amendment. The allocation is needed for the costs of contr;:lcten extemi'll expertise the 
Bureau anticipates it will need. 
Assumes the amendment's decrease in the 2006 savings offset payment (SOP) would reduce Dirigo Health program 
revenue by $8,700,000 for fiscal year 2006-07. While the amendment does not specify offsets to this revenue 
reduction, the program has existing authority to keep program spending within available resources. 
LR2809(20) - Fiscal Note - Page 1 of 1