An Act To Require Insurers To Use Savings from Dirigo Health To Reduce Premiums
Maine Legislature, Session 123, LD 0959
Committee: Insurance and Financial Services
Sponsors: HOLMAN, NUTTING, NASS, RECTOR, RA YE
Amends: 24-A MRSA §6913

Legislative Document 
No. 959 
H.P.719 
House of Representati ves, March 1, 2007 
An Act To Require Insurers To Use Savings from Dirigo Health To 
Reduce Premiums 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative HOLMAN of Fayette. 
Cosponsored by Senator NUTTING of Androscoggin and 
7J1~ 
1'J?11!~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: NASS of Acton, RECTOR of Thomaston, Senator: RA YE of Washington. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §6913, sub-§2, ~C, as enacted by PL 2005, c. 400, Pt. A, 
§ 11, is amended to read: 
C. The savings offset amount must reflect and may not exceed 75% of the aggregate 
measurable cost savings, as determined by the board pursuant to subsection I; and 
Sec. 2. 24-A MRSA §6913, sub-§7, as enacted by PL 2003, c. 469, Pt. A, §8, is 
amended to read: 
7. 
Demonstration of recovery of cost savings and savings offset payments 
through reduction in rate of growth in State's health spending and bad debt and 
charity care. 
In accordance with the requirements of this subsection, every health 
II 
insurance carrier and health care provider shall demonstrate that best efforts have been 
made to ensure that a carrier has recovered savings offset payments made all of the cost 
savings determined by the board pursuant to this section subsection 1, including savings 
offset payments, through negotiated reimbursement rates that reflect health care 
providers' reductions or stabilization in the cost of bad debt and charity care as a result of 
the operation of Dirigo Health and any increased enrollment due to an expansion III 
MaineCare eligibility occurring after June 30, 2004. 
A. 
A health insurance carrier shall use best efforts to ensure health insurance 
premiums reflect any such recovery of cost savings and savings offset payments as 
those cost savings and savings offset payments are reflected through incurred claims 
experience in accordance with subsection 9. 
B. 
During any negotiation with a health insurance carrier relating to a health care 
provider's reimbursement agreement with that carrier, a health care provider shall 
provide data relating 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 
as a result of any increased enrollment due to an expansion in MaineCare eligibility 
occurring after June 30, 2004. 
Sec. 3. 24-A MRS A §6913, sub-§8, ~C, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
C. 
Health insurance carriers and health care providers shall report annually, 
beginning March 1, 2005 and thereafter, information regarding the experience of a 
prior 12-month period on the efforts undertaken by the c~rrier and provider to recover 
cost savings determined by the board pursuant to subsection 1, including any savings 
offset payments, as reflected in reimbursement rates, through a reduction or 
stabilization in bad debt and charity care costs as a result of the operation of Dirigo 
Health and any increased enrollment due to an expansion in MaineCare eligibility 
occurring after June 30, 2004. The board shall determine the appropriate format for 
the report and utilize existing data on file with state agencies or other organizations to 
minimize duplication. The report must be submitted to the board. Using the 
information s.ubmitted by carriers and providers, the board shall submit a summary of 
that information by October I, 2005 and annually thereafter. 
Page I - 123LR0547(OI)-1 
Sec. 4. 24-A MRS A §6913, sub-§lO, as enacted by PL 2005, c. 400, Pt. A, § 13, 
is amended to read: 
10. 
Definition of paid claims; factors used to determine cost savings; 
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. Before April 1, 2008, the board shall adopt rules regarding the factors used for the 
purposes of calculating aggregate measurable cost savings as required in subsection 1. 
Rules adopted pursuant to this subsection are major substantive rules as defined in Title 
5, chapter 375, subchapter 2-A. 
II 
SUMMARY 
This bill limits the amount of the savings offset payment to 75% of the aggregate 
measurable cost savings determined by the Board of Directors of Dirigo Health. The bill 
requires health insurers and providers to use best efforts to ensure that health insurance 
premiums and reimbursement rates reflect the recovery of all of the cost savings and 
savings offset payments paid by health insurers. The bill also requires the Board of 
Directors of Dirigo Health to adopt rules regarding the factors used to calculate aggregate 
measurable cost savings.