An Act To Protect Consumers and Small Business Owners from Rising Health Care Costs
Maine Legislature, Session 124, LD 1444
Committee: Insurance and Financial Services
Sponsors: BARTLETT, PINGREE, ALFOND, BOWMAN, MARRACI-IE, MITCHELL, PERRY, PRIEST, TREAT
Amends: 5 MRSA §12004-I, 22 MRSA §8712, 22 MRSA §8714, 24-A MRSA §2694-A, 5 MRSA §194-L

MAINE STATE LEGISLATURE 
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124thMAIN LEGISLATURE 
Legislative Document 
No. 1444 
S.P.529 
In Senate, April 7, 2009 
An Act To Protect Consumers and Small Business Owners from 
Rising Health Care Costs 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator BARTLETT of Cumberland. 
Cosponsored by Speaker PINGREE of North Haven and 
9tf)(J~ 
JOY J. O'BRIEN 
Secretary of the Senate. 
Senators: ALFOND of Cumberland, BOWMAN of York, MARRACI-IE of Kennebec, 
President MITCHELL of Kennebec, Representatives: PERRY of Calais, PRIEST of 
Brunswick, TREAT of Hallowell. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 5 MRSA §12004-I, sub-§30-B is enacted to read: 
30-B. 
Health Care 
Advisory Council on Not Authorized 
Payment Refonn 
Sec. A-2. 22 MRSA §8712, sub-§2, c;IA is enacted to read: 
MRSA §8714 
A. The organization shall promote public transparency of the quality and cost of 
health care in the State, and shall collect, synthesize and publish reports that are 
easily understandable by the average consumer and in a format that allows the user to 
compare each of the infonnation items listed in this paragraph to the extent 
practicable. The reports shall coordinate, link and compare information regarding 
health care services, outcomes and effectiveness of those services, quality of those 
services by health care facility and by practitioner, the location of those services, 
prices paid by individual commercial health insurance companies, 3rd-party 
administrators and, unless prohibited by federal law, government payors and any 
disparities in the delivery or availability of those services. The organization shall 
post the reports on a publicly accessible website that is well publicized and updated at 
least quarterly. 
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Sec. A-3. 22 MRSA §8714 is enacted to read: 
§8714. Advisory Council on Payment Reform 
1. Establishment and membership. The Advisory Council on Payment Refonn, 
established in Title 5, section 12004-1, subsection 30-B and referred to in this section as 
"the council," is established within the organization. The council consists of 7 members 
appointed by the board by a vote of a majority of board members. Members of the 
council include the following: 
A. 
One representative of a private employer with more than 1,000 full-time 
equivalent employees; 
B. One representative of a private employer with fewer than 50 full-time equivalent 
employees; 
C. One representative of a labor union representing employees of a private employer 
with more than 1,000 full-time equivalent employees. The private employer may not 
be the private employer represented under paragraph A; 
D. One representative of the uninsured or underinsured; 
E. One representative of a public purchaser using state funds to purchase health care 
services or health insurance for state employees; 
F. One representative of a consumer health advocacy coalition; and 
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G. One representative of MaineCare recipients. 
2. Term. Members of the council serve one-year terms. A member may not serve 
more than 4 consecutive terms. A member may continue to serve after expiration of the 
member's term until a successor is appointed, except for a member representing the 
Governor's Office of Health Policy and Finance. 
3. Compensation. Compensation for members of the council is not authorized. 
4. Quorum. A quorum is a majority of the members of the council. 
5. Chair. The council shall annually choose one of its members to serve as chair for 
a one-year term. 
6. Meetings. The council shall meet at least once bimonthly and may meet at other 
times at the call of the chair. Meetings of the council are public proceedings as provided 
by Title 1, chapter 13, subchapter 1. 
7. Duties. The council shall advise the organization in evaluating the public and 
private health care payment systems and shall develop and propose reforms to those 
systems. 
8. Data. The council shall solicit data and information from both the public and 
private sectors to help inform the council's work. 
A. The department shall forward to the council relevant data. 
B. Public purchasers using state or municipal funds to purchase health care services 
or health insurance shall submit to the council a consolidated public purchasers 
expenditure report outlining all funds expended in the most recently completed state 
fiscal year for hospital inpatient and outpatient care, physician services, prescription 
drugs, long-term care, mental health and other services and administration, organized 
by agency. 
C. The council shall encourage private purchasers established under Title 13, Title 
13-B and Title 13-C to develop and submit to the council a health expenditure report 
similar to that described in paragraph B. 
D. The organization and the Maine Quality Forum established in Title 24-A. section 
6951 shall forward to the council cost and quality data annually and any additional 
data requested by the council. 
9. Funding. The council may apply for grants and other nongovernmental funds to 
provide staff support or consultant support to carry out the duties and requirements of this 
section. 
10. Repeal. This section is repealed October 1, 2014. 
Sec. A-4. Development of proposed reforms 
1. Development. The Advisory Council on Payment Reform, established in the 
Maine Revised Statutes, Title 5, section 12004-1, subsection 30-B and referred to in this 
section as "the council," shall develop a comprehensive set of proposed reforms to 
provide incentives for cost-effective and patient-centered care. 
A. The council sha:ll examine payment methodologies and purchasing strategies, 
including, but not limited to, alternatives to fee-for-service models such as blended 
capitation rates, episodes-of-care payments, medical home models and global 
budgets; pay-for-performance programs; tiering of providers; and evidence-based 
purchasing strategies. 
B. The council shall analyze and synthesize relevant research. 
C. The council shall recommend a common transparent payment methodology that 
promotes coordination of care and chronic disease management; rewards primary 
care physicians for improving health outcomes; reduces waste and duplication in 
clinical care; decreases unnecessary hospitalizations and use of ancillary services; 
and provides appropriate reimbursement for investment in health information 
technology that reduces medical errors and enables coordination of care. 
D. The council shall recommend a plan for the implementation of the common 
payment methodology across all public and private payers in the State, including a 
plan under which the State shall seek a waiver from federal rules to facilitate the 
implementation of the common payment methodology. 
2. Involvement of interested parties. In developing its proposal, the council shall 
consult with the Maine Quality Forum, the Governor's Office of Health Policy and 
Finance, health care economists and other individuals or organizations with expertise in 
state and federal health care payment methodologies and reforms. The council shall use 
data and recommendations gathered in the course of these consultations as a basis for its 
fmdings and recommendations. 
Before a fmal vote on any recommendations, the council shall consult with parties likely 
to be affected by the recommendations, including, but not limited to, the Department of 
Health and Human Services, the Governor's Office of Health Policy and Finance, the 
Maine Hospital Association, Maine Medical Association, Maine Education Association 
Benefits Trust, Maine Municipal Employees Health Trust, one or more employers 
purchasing a fully insured health plan, one or more labor organizations with membership 
of more than 500 persons, an academic medical center, one or more hospitals with a high 
proportion of public payors, one or more retirement plans developed for union employees 
under which many different employers collectively agree to contribute to their contractor 
or employee retirement plans, one or more self-insured plans with membership of more 
than 500 persons, an organization representing health plans and organizations 
representing health care consumers. 
3. Meetings; report. The council shall hold its first meeting no later than October 1, 
2009 and shall submit a report that includes its findings and recommendations, including 
suggested legislation, for presentation to the Joint Standing Committee on Health and 
Human Services no later than February 1,2010. After receipt and review of the report, 
the Joint Standing Committee on Health and Human Services is authorized to introduce a 
bill related to the subject matter of the report to the Second Regular Session of the 124th 
Legislature. 
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PARTB 
Sec. B-l. 24-A MRSA §2694-A is enacted to read: 
§2694-A. Physician performance measurement, reporting and tiering programs 
1. 
Performance measurement, reporting and tiering programs. 
An insurer 
delivering or issuing for delivery within the State any individual health insurance policy 
or group health insurance policy or certificate shall annually file with the superintendent 
on or before October 1st a full and true statement of its criteria, standards, practices, 
procedures and programs, if any, that measure physician performance or tier physician 
performance. The statement must be on a form prepared by the superintendent and may 
be supp!ementen by addition::!! infonnation required by the superintendent. The statement 
must be verified by the oath of the insurer's president or vice-president, and secretary or 
chief medical officer. A filing and supporting information are public records 
notwithstanding Title 1, section 402, subsection 3. 
2. Duties. The superintendent shall review the statements, if any, assemble the 
statements in one table using a side-by-side comparison format and provide an analysis 
identifying the commonalities and differences of the statements. Notwithstanding any 
provision of law to the contrary, the superintendent shall adopt by rule a program and 
performance measures designed to: 
A. Ensure transparency and fairness and promote the continued strengthening of 
measurement programs to meet patients' needs; 
B. 
Promote the consistency, efficiency and fairness of physician performance 
measurement; and 
C. Promote an appropriate balance between innovation and standardization. 
3. Advisory panel. The superintendent shall convene an advisory panel whose 
membership includes, but is not limited to, one or more organizations representing 
physicians, one or more employers purchasing a fully insured health plan and one or 
more organizations representing health care consumers. The advisory panel shall provide 
advice to the superintendent regarding the proposed rule. 
4. Rulemaking. The superintendent shall adopt rules to implement this section. 
Rules adopted pursuant to this subsection are major substantive rules as dermed in Title 
5, chapter 375, subchapter 2-A. 
PARTC 
Sec. C-l. 5 MRSA §194-L is enacted to read: 
§194-L. Public benefit; hospitals and institutions 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings . 
A. "Public benefit" means the provision of free health care in an amount egual to the 
lesser of: 
(1) Five percent of the hospital's or institution's gross revenues for patient 
services; and 
(2) The value of all State and local tax exemptions received by the hospital or 
institution. 
For purposes of this paragraph, "provision of free health care" does not include 
expenditures for advertising or public relations unless the advertising or public 
relations expressly promote the availability of free health care. 
B. "Public charity" has the same meaning as set forth in section 194, subsection 1. 
2. 
Requirement. 
In addition to any charity care reguirements established in 
accordance with Title 22, section 1716, a public charity that is an institution licensed 
pursuant to Title 22, section 1811 must provide a public benefit. 
3. Rules. The Attorney General shall adopt rules to implement this section. Rules 
adopted pursuant to this subsection are routine technical rules pursuant to chapter 375, 
subchapter 2-A. 
SUMMARY 
Part A of the bill establishes the Advisory Council on Payment Reform to advise the 
Maine Health Data Organization and directs the council to develop a comprehensive set 
of proposed reforms to provide incentives for cost-effective and patient-centered health 
care. 
Part B of the bill directs the Superintendent of Insurance to adopt rules for physician 
performance measurement, reporting and tiering programs to promote cost-effective and 
patient-centered care and create an advisory council. 
Part C of the bill requires that hospitals and institutions licensed under the Maine 
Revised Statutes, Title 22, section 1811 that are public charities must provide a certain 
amount of free health care. 
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