An Act To Modify Rating Practices for Individual and Small Group Health Plans and To Encourage Value-based Purchasing of Health Care Services
Maine Legislature, Session 125, LD 1333
Committee: Insurance and Financial Services
Sponsors: RICHARDSON, BLACK, DOW, FITZPATRICK, PICCHIOTTI, WHITTEMORE
Amends: 24-A MRSA §2736-C, 24-A MRSA §2808-B, 24-A MRSA §4303

Legislative Document 
No. 1333 
H.P. 979 
House of Representatives, March 29, 2011 
An Act To Modify Rating Practices for Individual and Small Group 
Health Plans and To Encourage Value-based Purchasing of Health 
Care Services 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative RICHARDSON of Warren. 
Cosponsored by Representatives: BLACK of Wilton, DOW of Waldoboro, FITZPATRICK of 
Houlton, McKANE of Newcastle, PICCHIOTTI of Fairfield, Senator: WHITTEMORE of 
Somerset. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §2736-C, sub-§2, ¶D, as amended by PL 2007, c. 629, Pt. 
A, §4, is repealed and the following enacted in its place: 
D.  A carrier may vary the premium rate due to age and geographic area in 
accordance with the limitations set out in this paragraph. 
(1)  For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2012 and 
December 31, 2012, for each health benefit plan offered by a carrier, the highest 
premium rate for each rating tier may not exceed 2 times the premium rate that 
could be charged to an eligible individual with the lowest premium rate for that 
rating tier in a given rating period. 
(2)  For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2013 and 
December 31, 2013, for each health benefit plan offered by a carrier, the highest 
premium rate for each rating tier may not exceed 2.5 times the premium rate that 
could be charged to an eligible individual with the lowest premium rate for that 
rating tier in a given rating period. 
(3)  For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2014, for 
each health benefit plan offered by a carrier, the highest premium rate for each 
rating tier may not exceed 3 times the premium rate that could be charged to an 
eligible individual with the lowest premium rate for that rating tier in a given 
rating period. 
For purposes of this paragraph, "rating tier" means each category of individual or 
family composition for which a carrier charges separate rates. 
Sec. 2.  24-A MRSA §2808-B, sub-§2, ¶D, as amended by PL 2001, c. 410, Pt. 
A, §4 and affected by §10, is repealed and the following enacted in its place: 
D.  A carrier may vary the premium rate due to age, occupation or industry and 
geographic area in accordance with the limitations set out in this paragraph. 
(1)  For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2012 and 
December 31, 2012, for each small group health plan offered by a carrier, the 
highest premium rate for each rating tier may not exceed 2 times the premium 
rate that could be charged to an eligible group with the lowest premium rate for 
that rating tier in a given rating period. 
(2)  For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between January 1, 2013 and 
December 31, 2013, for each small group health plan offered by a carrier, the 
highest premium rate for each rating tier may not exceed 2.5 times the premium 
rate that could be charged to an eligible group with the lowest premium rate for 
that rating tier in a given rating period. 
(3)  For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after January 1, 2014, for 
each small group health plan offered by a carrier, the highest premium rate for 
each rating tier may not exceed 3 times the premium rate that could be charged to 
an eligible group with the lowest premium rate for that rating tier in a given 
rating period. 
For purposes of this paragraph, "rating tier" means each category of small group for 
which a carrier charges separate rates. 
Sec. 3.  24-A MRSA §2808-B, sub-§2, ¶D-1, as amended by PL 2001, c. 410, 
Pt. A, §5 and affected by §10, is repealed. 
Sec. 4.  24-A MRSA §4303, sub-§1, as amended by PL 2009, c. 652, Pt. A, §33, 
is further amended to read: 
1.  Demonstration of adequate access to providers.  Except as provided in 
paragraphs B and C, a A carrier offering or renewing a managed care plan shall provide 
to its members reasonable access to health care services in accordance with standards 
developed by rule by the superintendent.  These standards must consider the geographical 
and transportational transportation problems in rural areas.  All managed care plans 
covering residents of this State must provide reasonable access to providers consistent 
with the access-to-services requirements of any applicable bureau rule. 
B.  Upon approval of the superintendent, a carrier may offer a health plan that 
includes financial provisions designed to encourage members to use designated 
providers in a network if: 
(1)  The entire network meets overall access standards pursuant to Bureau of 
Insurance Rule Chapter 850; 
(2)  The health plan is consistent with product design guidelines for Bureau of 
Insurance Rule Chapter 750, but only if the health plan is offered by a health 
maintenance organization; 
(3)  The health plan does not include financial provisions designed to encourage 
members to use designated providers of primary, preventive, maternity, 
obstetrical, ancillary or emergency care services, as defined in Bureau of 
Insurance Rule Chapter 850; 
(4)  The financial provisions may apply to all of the enrollees covered under the 
carrier's health plan; and 
(5)  The carrier establishes to the satisfaction of the superintendent that the 
financial provisions permit the provision of better quality services and the quality 
improvements either significantly outweigh any detrimental impact to covered 
persons forced to travel longer distances to access services, or the carrier has 
taken steps to effectively mitigate any detrimental impact associated with 
requiring covered persons to travel longer distances to access services. The 
superintendent may consult with other state entities, including the Department of 
Health and Human Services, Bureau of Health and the Maine Quality Forum 
established in section 6951, to determine whether the carrier has met the 
requirements of this subparagraph. The superintendent shall adopt rules regarding 
the criteria used by the superintendent to determine whether the carrier meets the 
quality requirements of this subparagraph; and 
(6)  The financial provisions may not permit travel at a distance that exceeds the 
standards established in Bureau of Insurance Rule Chapter 850 for mileage and 
travel time by 100%. 
C.  A carrier may develop and file with the superintendent for approval a pilot 
program that allows carriers to reward providers for quality and efficiency through 
tiered benefit networks and providing financial incentives to members.  The upper 
tier, or the upper tiers if there are 3 or more tiers, under a pilot program approved 
pursuant to this paragraph is exempt from geographic access requirements set forth in 
this subsection or in rules adopted by the superintendent. Any carrier offering a 
health plan under the pilot program must collect data on the impact of the pilot 
program on premiums paid by enrollees, payments made to providers, quality of care 
received and access to health care services by individuals enrolled in health plans 
under the pilot program and must submit that data annually to the superintendent. The 
superintendent shall report annually beginning January 15, 2010 2012 to the joint 
standing committee of the Legislature having jurisdiction over insurance and 
financial services matters on any approval of a pilot program the impact of the 
financial incentives on cost, quality of care and access to health care services 
pursuant to this paragraph. 
The basis for tiering benefits under a pilot program must be to provide incentives for 
higher-quality care, improved patient safety or improved efficiency or a combination 
of those factors.  The superintendent shall consult with the Maine Quality Forum 
under section 6951 in assessing quality.  The superintendent shall disapprove or 
withdraw approval of a pilot program if the superintendent finds that approval or 
continued operation would cause undue hardship to enrollees in the pilot program or 
reduce their quality of care. 
The superintendent shall consider the experience of approved pilot programs, 
including consumer complaints and examinations, provider behavior and efficiency, 
in determining whether or not to reapprove subsequent pilot program applications. 
Sec. 5.  Application.  The requirements of this Act apply to all policies, contracts 
and certificates subject to this Act that are executed, delivered, issued for delivery, 
continued or renewed on or after January 1, 2012.  For the purposes of this Act, contracts 
are deemed to be renewed no later than the next anniversary of the contract date. 
Sec. 6.  Effective date.  Those sections of this Act that repeal and replace the 
Maine Revised Statutes, Title 24-A, section 2736-C, subsection 2, paragraph D and 
section 2808-B, subsection 2, paragraph D take effect January 1, 2012. 
SUMMARY 
This bill gradually modifies the community rating provisions for individual and small 
group health plans.  It expands in 3 increments the rating bands from the current ratio of 
1.5:1 to 3:1 by January 1, 2014. 
The bill allows financial incentives except for emergency care services.  It maintains 
the requirement that plans must provide reasonable access to services for all members.  It 
allows plans to provide financial incentives to members to reward providers for quality 
and efficiency.  A carrier must submit annual data to the Superintendent of Insurance 
showing the impact of such financial incentives on premiums paid by enrollees, payments 
made to providers, quality of care received and access to health care services by 
individuals enrolled in health plans.