An Act To Implement the Recommendations of the Advisory Council on Health Systems Development Relating to Payment Reform
Maine Legislature, Session 124, LD 1819
Committee: Insurance and FinanciaJ Services
Amends: 2 MRSA §104, 22 MRSA §1843

MAINE STATE LEGISLATURE 
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124thMAINE LEGISLATURE 
Legislative Document 
No. 1819 
S.P.735 
In Senate, March 16, 2010 
An Act To Implement the Recommendations of the Advisory 
Council on Health Systems Development Relating to Payment 
Reform 
Reported by Senator BOWMAN of York for the Joint Standing Committee on Insurance 
and Financial Services pursuant to Public Law 2009, chapter 350, Part A, section 3. 
Reference to the Committee on Insurance and FinanciaJ Services suggested and ordered 
printed pursuant to Joint Rule 218.· 
Printed on recycled paper 
9tf){!)~ 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 2 MRSA §104, sub-§7, ~, as enacted by PL 2007, c. 441, § 1, is 
amended to read: 
F. 
Identifying specific potential reductions in total health care spending without 
shifting costs onto consumers and without reducing access to needed items and 
services for all persons, regardless of individual ability to pay. In identifying specific 
potential reductions pursuant to this paragraph, the council shall recommend methods 
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to reduce the rate of increase in overall health care spending and the rate of increase 
in health care costs to a level that is equivalent to the rate of increase in the cost of 
living to make health care and health coverage more affordable for people in this 
State; aH€l 
Sec. 2. 2 MRSA §104, sub-§7, ,G, as enacted by PL 2007, c. 441, §1, is 
amended to read: 
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G. 
Beginning March 1,' 2008 and annually thereafter, fITfrke making specific 
recommendations relating to paragraphs A to F and to paragraph H to the joint 
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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 and to any appropriate state 
agency.,.; and 
Sec. 3. 2 MRSA §104, sub-§7, ~ 
is enacted to read: 
H. Reviewing and evaluating strategies for payment reform in the State's health care· 
system ·to assess whether proposed payment reform efforts follow the guiding· 
principles developed by the council and identifing any statutory or regulatory barriers 
to implementation of payment reform. 
Sec. 4. 22 MRSA§1843, sub-§l, as enacted by PL 2005, c.670, § 1 arid affected 
by §4, is amended to read: . 
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1. Cooperative agreement. 
"Cooperative agreement" means an agreement that 
names the parties to the agreement and describes the nature and scope of the cooperation 
fbr: 
A. The sharing, allocation or referral of patients, personnel, instructional programs, 
medical or mental health services, support. seniicesor facilities or medical, diagnostic 
or laboratory facilities, procedures or other services traditionally offered by hospitals 
or health care providers; 
B. The coordinated negotiation and contracting with payors or employers; or 
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C. The merger of 2 or more hospitals or 2 or more health care providers covered' 
entities. 
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A cooperative agreement under this chapter is an agreement behveen involving 2 or more 
hospitals or an agreement behveen 2 or more health care providers covered entities. Aft 
Page) - 124LR2645(OI)-1 
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agreement bet'.veen one or more hospitals !lnd one or more health care providers is not a 
coonerative agreement for the numoses of this chanter. 
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Sec.5; .22 MRSA §1843, sub-§5, as enacted by PL 2005, c. 670, § 1 and affected 
by §4, is amended to read: 
5. 
Merger. "Merger" means a transaction by which ownership or control over 
. sllbstantially all of the stock, assets or activities of one or more covered entities is placed 
under the control of another covered entity. A merger behveen one or more hospitals and 
onA or morA hAAlth CAm nrnviAArs is not :i merger for the nllrnoses of this chAnter. 
Sec. 6. 
Advisory Council on' Health Systems Development; payment 
reform. The Advisory Council on Health Systems Development, referred to in this 
section as "the council," shall work collaboratively with sponsors of payment reform 
models and other stakeholders to advance payment reform efforts in the State. 
The 
council shall: 
1. Consider emerging research and its implications for payment reform in the State; 
2. Assess the merits of proposed payment reform models against the guiding 
principles developed by the council; 
3. Develop an approach for building consumer awareness of payment reform models; 
4. Identify any statutory and regulatory changes needed to advance models for 
payment reform; and 
5. Design a 3-year demonstration project to advance payment reform models. 
The council shall consult with the Attorney General and the Department of 
Professional and Financial Regulation, Bureau of Insurance for technical expertise as 
necessary concerning payment reform. The council shall submit a report that includes its 
findings and recommendations, including suggested legislation, for presentation to the 
joint standing committee of the Legislature having jurisdiction over health and human 
services matters and the joint standing committee of the Legislature having jurisdiction 
over insurance and financial services matters no later than January 15, 2011. 
After 
receipt and review of the report, the joint standing committee of the Legislature having 
jurisdiction over health and human services matters or the joint standing committee of the 
Legislature having jurisdiction over insurance and' financial services· matters may 
introduce a bill related to the subject matter of the report to the First Regular Session of 
the 125th Legislature. 
SUMMARY 
This bill is submitted by the Joint Standing Committee on Insurance and Financial 
.Services and implements the recommendations made by the Advisory Council on Health 
Systems Development related to payment reform. The bill requires the Advisory Council 
. on Health Systems Development to review and evaluate payment reform models and 
requires the council·t6 report to the joint standing committee of the Legislature having 
jurisdiction over health an~ hum~n servic~s matters and the Joint standing committee of-
. the Legislature having jurisdiction over insurance and ·financial services matters no later 
than January 15, 2011. The bill also. clarifies the intent of the Hospital and Health Care 
Provider Cooperation Act to apply to mergers of covered entities, which are defined as 
hospitals or health care providers. 
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