An Act To Lower Health Care Costs
Maine Legislature, Session 129, LD 2110
Committee: Health Coverage, Insurance and Financial Services
Sponsors: JACKSON, GIDEON, BELLOWS, BREEN, CARPENTER, HERBIG, LIBBY, VITELLI, TEPLER
Amends: 5 MRSA §12004-G, 22 MRSA §8712, 24-A MRSA §7703

Legislative Document
No. 2110
S.P. 755
In Senate, February 18, 2020
An Act To Lower Health Care Costs
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203.
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by President JACKSON of Aroostook.
Cosponsored by Speaker GIDEON of Freeport and
Senators: BELLOWS of Kennebec, BREEN of Cumberland, CARPENTER of Aroostook, 
HERBIG of Waldo, LIBBY of Androscoggin, SANBORN, H. of Cumberland, VITELLI of 
Sagadahoc, Representative: TEPLER of Topsham.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA c. 167, as enacted by PL 2019, c. 471, §1, is repealed.
Sec. 2.  5 MRSA §12004-G, sub-§14-I, as enacted by PL 2019, c. 471, §2, is 
repealed.
Sec. 3.  5 MRSA §12004-G, sub-§14-J is enacted to read:
14-J.  
Sec. 4.  22 MRSA §8712, sub-§6, as enacted by PL 2019, c. 471, §3, is amended 
to read:
6.  Data shared with Maine Prescription Drug Affordability Board Commission 
on Affordable Health Care.  The organization may share data collected under this 
chapter with the Maine Prescription Drug Affordability Board Commission on Affordable 
Health Care, established under Title 5, section 12004-G, subsection 14-I 24-A, chapter 
97, as long as any data shared pursuant to this subsection is not further disseminated.
Sec. 5.  24-A MRSA c. 97 is enacted to read:
CHAPTER 97
MAINE COMMISSION ON AFFORDABLE HEALTH CARE
§7701.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Board.  "Board" means the Board of Directors of the Maine Commission on 
Affordable Health Care established in section 7703.
2.  Carrier.  "Carrier" means:
A.  An insurance company licensed in accordance with this Title to provide health 
insurance;
B.  A health maintenance organization licensed pursuant to chapter 56;
C.  A preferred provider arrangement administrator registered pursuant to chapter 32;
D.  A nonprofit hospital or medical service organization or health plan licensed 
pursuant to Title 24; or
Health Care
Maine Commission 
on Affordable 
Health Care, Board 
of Directors
Expenses Only
24-A MRSA §7703
E.  An employee benefit excess insurance company licensed in accordance with this 
Title to provide property and casualty insurance that provides employee benefit 
excess insurance pursuant to section 707, subsection 1, paragraph C-1.
3.  Commission.  "Commission" means the Maine Commission on Affordable Health 
Care established in section 7702.
4.  Executive director.  "Executive director" means the executive director of the 
commission.
§7702.  Maine Commission on Affordable Health Care
The Maine Commission on Affordable Health Care is established as an independent 
executive agency to oversee the health care delivery and payment system in this State for 
the purposes set forth in this chapter and as provided in this section. The exercise by the 
Maine Commission on Affordable Health Care of the powers conferred by this chapter is 
the performance of essential governmental functions.
1.  Purposes.  The commission is established to:
A.  Set health care cost growth goals for the State;
B.  Set health care quality goals for the State;
C.  Enhance the transparency of provider organizations;
D.  Monitor the adoption of alternative payment methods;
E.  Foster innovative health care delivery and payment models that lower health care 
cost growth while improving the quality of patient care;
F.  Monitor and review the impact of changes in the health care market;
G.  Protect patient access to necessary health care services;
H.  Set health care spending targets for public payors, including separate targets for 
prescription drug spending; and
I.  Serve as a resource for consumers experiencing problems accessing health 
coverage and to resolve consumer complaints in cooperation with the Consumer 
Health Care Division within the bureau as provided in section 4321.
§7703.  Board of Directors of the Maine Commission on Affordable Health Care
The commission is overseen by a board of directors, as established in Title 5, section 
12004-G, subsection 14-J.
1.  Appointments.  The board consists of 11 members as follows:
A.  Nine members of the board appointed as follows, subject to review by the joint 
standing committee of the Legislature having jurisdiction over health coverage and 
health insurance matters and confirmation by the Senate:
(1)  Three members appointed by the Governor, including one member as chair 
with demonstrated expertise in health care delivery, health care management at a 
senior level or health care finance and administration, one member with 
demonstrated expertise in health care finance and administration and one member 
who is a primary care physician;
(2)  Three members appointed by the President of the Senate, including one 
member who represents a health care consumer advocacy organization, one 
member who is a health economist and one member who has demonstrated 
expertise in behavioral health, substance use disorder and mental health services 
and mental health care reimbursement systems; and
(3)  Three members appointed by the Speaker of the House, including one 
member who represents the health care workforce, one member who is a 
purchaser of health care representing business management or health benefits 
administration and one member with demonstrated expertise in innovative 
medical technologies and treatments for patient care; and
B.  Two ex officio members:
(1)  The Commissioner of Health and Human Services or the commissioner's 
designee; and
(2)  The Commissioner of Administrative and Financial Services or the 
commissioner's designee.
A member of the board may not be employed by, a consultant to, a member of the board 
of directors of, affiliated with or otherwise a representative of a carrier or other insurer, 
an agent or broker, a health care provider or a health care facility or health clinic while 
serving on the board.  A member of the board may not be a member, a board member or 
an employee of a trade association of carriers, health facilities, health clinics or health 
care providers while serving on the board.  A member of the board may not be a health 
care provider unless the member receives no compensation for rendering services as a 
health care provider and does not have an ownership interest in a professional health care 
practice.
2.  Terms of office.  Appointed members of the board serve 5-year terms and may be 
reappointed.  A vacancy for an unexpired term must be filled in accordance with 
subsection 1, paragraph A or B.  A member may serve until a replacement is appointed 
and qualified.
3.  Chair; vice-chair.  The Governor shall appoint the chair of the board as provided 
in subsection 1, paragraph A, subparagraph (1). The board shall annually elect a vice-
chair from among its members.
4.  Quorum.  Six members of the board constitute a quorum.
5.  Affirmative vote.  An affirmative vote of a majority of the members is required 
for any action taken by the board.
6.  Reimbursement for expenses.  Except for the ex officio members, a member of 
the board is entitled to reimbursement for expenses according to the provisions of Title 5, 
section 12004-G, subsection 14-J and is eligible for reimbursement whenever that 
member fulfills any board duties in accordance with board bylaws.
7.  Meetings.  The board shall meet monthly and may also meet at other times at the 
call of the chair or the executive director appointed under section 7707. All meetings of 
the board are public proceedings within the meaning of Title 1, chapter 13, subchapter 1.
§7704.  Powers of the Maine Commission on Affordable Health Care
1.  Powers.  Subject to any limitations contained in this chapter or in any other law, 
the commission may:
A.  Develop a plan of operation;
B.  Take any legal actions necessary or proper to recover or collect payments due the 
commission or that are necessary for the proper administration of the commission;
C.  Make and alter bylaws, not inconsistent with this chapter or with the laws of this 
State, for the administration and regulation of the activities of the commission;
D.  Have and exercise all powers necessary or convenient to effect the purposes for 
which the commission is organized or to further the activities in which the 
commission may lawfully be engaged;
E.  Enter into contracts with qualified 3rd parties both private and public for any 
service necessary to carry out the purposes of this chapter;
F.  Apply for and receive funds, grants or contracts from public and private sources, 
including a portion of any user fee to support the costs of any state-based marketplace 
established in accordance with the federal Affordable Care Act;
G.  Contract with the Maine Health Data Organization and other organizations with 
expertise in health care data, including a nonprofit health data processing entity in 
this State, to assist the commission in the performance of its responsibilities;
H.  Acquire, own, hold, dispose of and encumber personal property and lease real 
property in the exercise of its powers and the performance of its duties;
I.  Enter into and execute instruments in connection with agreements or transactions 
with any federal, state or municipal agency or other public institution or with any 
private individual, partnership, firm, corporation, association or other entity, 
including contracts with professional service firms as may be necessary in its 
judgment, and fix their compensation;
J.  Enter into interdepartmental agreements with any other state agencies as the board 
considers necessary to implement this chapter; and
K.  In accordance with the limitations and restrictions of this chapter, cause any of its 
powers or duties to be carried out by one or more organizations organized, created or 
operated under the laws of this State.
§7705.  Limitation on liability
1.  Indemnification.  A board member or employee of the commission is not subject 
to personal liability for having acted within the course and scope of membership or 
employment to carry out any power or duty under this chapter. The commission shall 
indemnify a board member or an employee of the commission against expenses actually 
and necessarily incurred by that member or employee in connection with the defense of 
an action or proceeding in which that member or employee is made a party by reason of 
past or present authority.
2.  Limitation on liability of board members.  The personal liability of a board 
member is governed by Title 18-B, section 1010.
§7706.  Conflicts of interest
The following provisions govern any conflict of interest for a member of the board, a 
member of the advisory council established pursuant to section 7709 or any staff member 
or contractor of the board.
1.  Consideration of prospective member.  When appointing a member of the board 
or the advisory council established pursuant to section 7709, the appointing authority 
shall consider any conflict of interest disclosed by the prospective member.  A member 
shall elect to be recused from any board activity in the case in which the member or an 
immediate family member of the member has a conflict of interest.  For the purposes of 
this subsection, "conflict of interest" means an association, including a financial or 
personal association, that has the potential to bias or have the appearance of biasing an 
individual's decisions in matters related to the board or the conduct of the board's 
activities.
2.  Recusal.  A member, staff or contractor of the board with a conflict of interest 
shall elect to be recused.  For purposes of this subsection, "conflict of interest" means any 
instance in which a member, staff or contractor of the board or an immediate family 
member of the member, staff or contractor of the board has received or could receive 
either of the following:
A.  A direct financial benefit of any amount deriving from the results or findings of a 
study or determination by or for the board; or
B.  A financial benefit from individuals or companies that own or manufacture 
prescription drugs or health care services or items to be studied by the board that in 
the aggregate exceeds $5,000 per year.  For purposes of this paragraph, "financial 
benefit" includes honoraria, fees, stock or other financial benefit and the current value 
of already existing stock holdings, in addition to any direct financial benefit deriving 
from the results or findings of a study or determination by or for the board.
3.  Disclosure.  A conflict of interest must be disclosed in the following manner:
A.  By the board in the employment of board senior staff;
B.  By the Governor, President of the Senate or Speaker of the House of 
Representatives when appointing members to the board and advisory council 
established pursuant to section 7709;
C.  By the board, describing any recusals as part of any final decision relating to a 
prescription drug; and
D.  By the 5th day after a conflict is identified or, if a public meeting of the board will 
occur within that 5-day period, in advance of the public meeting.
4.  Public disclosure.  Conflicts of interest must be publicly posted on the website of 
the board.  The information disclosed must include the type, nature and magnitude of the 
interests of the individual involved, except to the extent that the individual elects to be 
recused from participation in any activity with respect to which a potential conflict of 
interest exists.
5.  Gifts.  The board, the advisory council established pursuant to section 7709, a 
member of the board or staff or a contractor of the board may not accept gifts, bequests or 
donations of services or property that suggest a conflict of interest or have the appearance 
of creating bias in the work of the board or advisory council.  A member of the advisory 
council established pursuant to section 7709 who accepts a gift, bequest or donation of 
services or property that suggests a conflict of interest or has the appearance of creating 
bias in the work of the advisory council shall disclose the gift, bequest or donation 
publicly.
§7707.  Executive director
1.  Appointed position.  The board shall appoint an executive director, who serves at 
the pleasure of the board.
2.  Duties of executive director.  The executive director appointed under subsection 
shall:
A.  Serve as the liaison between the board and the commission and serve as secretary 
and treasurer to the board;
B.  Manage the commission's programs and services;
C.  Employ or contract on behalf of the commission for professional and 
nonprofessional personnel or services.  Employees of the commission are subject to 
the Civil Service Law;
D.  Approve all accounts for salaries, per diems and allowable expenses of the 
commission and of any employee or consultant and expenses incidental to the 
operation of the commission; and
E.  Perform other duties prescribed by the board to carry out the functions of this 
chapter.
§7708.  Records
Except as provided in subsections 1 and 2, information obtained by the commission 
under this chapter is a public record within the meaning of Title 1, chapter 13, subchapter 
1.
1.  Financial information.  Any personally identifiable financial information, 
supporting data or tax return of any person obtained by the commission under this chapter 
is confidential and not a public record.
2.  Health information.  Health information obtained by the commission under this 
chapter that is covered by the federal Health Insurance Portability and Accountability Act 
of 1996, Public Law 104-191 or information covered by chapter 24 or Title 22, section 
1711-C is confidential and not a public record.
§7709.  Advisory council
1.  Advisory council.  A 12-member advisory council is established to advise the 
board on establishing annual spending targets pursuant to section 7711.  The advisory 
council consists of:
A.  The Governor or the Governor's designee;
B.  The Commissioner of Administrative and Financial Services or the 
commissioner's designee;
C.  The Commissioner of Corrections or the commissioner's designee;
D.  The Commissioner of Health and Human Services or the commissioner's 
designee;
E.  The Attorney General or the Attorney General's designee;
F.  The executive director of the office of employee health and benefits within the 
Department of Administrative and Financial Services, Bureau of Human Resources 
or the executive director's designee;
G.  A representative from the Maine Service Employees Association or a successor 
organization, appointed by the Governor from a list of nominees submitted by the 
association;
H.  A representative from the Maine Education Association or a successor 
organization, appointed by the Governor from a list of nominees submitted by the 
association;
I.  A representative from the Maine Municipal Association or a successor 
organization, appointed by the Governor from a list of nominees submitted by the 
association;
J.  A representative from the University of Maine System, appointed by the Governor 
from a list of nominees submitted by the system;
K.  A representative from the Maine Community College System, appointed by the 
Governor from a list of nominees submitted by the system; and
L.  A representative of consumer interests, who serves a 3-year term and is appointed 
by the Governor.
§7710.  Establishment of health care cost growth targets and health care quality 
targets
1.  Public cost trend hearings.  In accordance with this subsection and not later than 
October 1st of every year, the commission shall hold public cost trend hearings based on 
data provided by the Maine Health Data Organization comparing the growth in total 
health care expenditures to the health care cost growth benchmark established under 
subsection 3 for the previous calendar year. The hearings must examine health care 
provider, provider organization and private and public health care payor costs, prices and 
cost trends, with particular attention to factors that contribute to cost growth within the 
State's health care system.
A.  The Attorney General may intervene in hearings under this subsection.
B.  The commission shall provide public notice of any hearing under this subsection 
at least 60 days in advance.
C.  The commission shall solicit the participation as witnesses for a public hearing 
under this subsection of a representative sample of providers, provider organizations, 
payors and others.
The commission shall solicit testimony from a payor paying providers more than 
10% above or more than 10% below the average relative price or entering into 
alternative payment contracts that vary by more than 10%. A payor that provides 
testimony shall explain the extent of price variation between the payor's participating 
providers and describe any efforts to reduce such price variation.
D.  Witnesses under paragraph C shall provide testimony under oath and subject to 
examination and cross-examination by the commission, the executive director and the 
Attorney General, if the Attorney General has intervened at the public hearing, in a 
manner and form to be determined by the commission.
E.  In the event that the data provided by the Maine Health Data Organization 
demonstrates that the percentage change in total health care expenditures exceeded 
the health care cost growth benchmark established under subsection 3 in the previous 
calendar year, the commission may identify additional witnesses for the public 
hearing. Witnesses shall provide testimony subject to examination and cross-
examination by the commission, the executive director and the Attorney General at 
the public hearing in a manner and form to be determined by the commission, 
including, but not limited to:
(1)  Testimony concerning unanticipated events that may have affected the total 
health care cost expenditures, including, but not limited to, a public health crisis 
such as an outbreak of a disease, a public safety event or a natural disaster;
(2)  Testimony concerning trends in the severity or complexity of patient 
conditions or use of services;
(3)  Testimony concerning trends in input cost structures, including, but not 
limited to, the introduction of new pharmaceuticals, medical devices and other 
health technologies;
(4)  Testimony concerning the cost of providing certain specialty services, 
including, but not limited to, the provision of health care to children, cancer-
related health care and medical education;
(5)  Testimony related to unanticipated administrative costs for carriers, 
including, but not limited to, costs related to information technology, 
administrative simplification efforts, labor costs and transparency efforts;
(6)  Testimony related to costs due to the implementation of state or federal 
legislation or government regulation; and
(7)  Any other factors that may have led to excessive health care cost growth.
2.  Annual report.  The commission shall compile an annual report concerning 
spending trends and underlying factors, along with any recommendations for strategies to 
increase the efficiency of the health care system. The report must be based on the 
commission's analysis of information provided at the hearings by providers, provider 
organizations and insurers, data from the Maine Health Data Organization and any other 
information the commission considers necessary to fulfill its duties under this section and 
any rules adopted by the commission. The report must be submitted to the Governor and 
the Legislature and must be published and available to the public not later than December 
31st of each year, beginning in 2021. The report may include suggested legislation 
necessary to implement any recommendations contained in the report.
3.  Health care cost growth benchmark.  Not later than April 15th of every year, 
beginning in 2021, the board shall establish a health care cost growth benchmark for the 
average growth in total health care expenditures in the State for the next calendar year. 
The commission shall establish procedures to prominently publish the annual health care 
cost growth benchmark on a publicly accessible website maintained by the commission.  
The commission shall establish the annual health care cost growth benchmark as follows.
A.  For calendar year 2021, the health care cost growth benchmark must be equal to 
the growth rate of potential gross state product as long as the growth rate of potential 
gross state product for calendar year 2021 is not more than 3.6%.
B.  For calendar years 2022 and beyond, the health care cost growth benchmark must 
be equal to the growth rate of potential gross state product.
C.  Prior to making any recommended modification to the health care cost growth 
benchmark under this subsection, the commission shall hold a public hearing on the 
recommended modification. The public hearing must be based on the data submitted 
by the Maine Health Data Organization comparing the growth in total health care 
expenditures to the health care cost growth benchmark for the previous calendar year, 
any other data provided by the organization and such other pertinent information or 
data as may be available to the commission. The hearing must examine health care 
provider, provider organization and private and public health care payor costs, prices 
and cost trends, with particular attention to factors that contribute to cost growth 
within the State's health care system, and whether, based on the testimony, 
information and data, a modification in the health care cost growth benchmark is 
appropriate. The commission shall provide public notice, including notice to the 
Legislature, of the hearing at least 45 days prior to the date of the hearing. The 
commission shall solicit the participation as witnesses for the public hearing of a 
representative sample of providers, provider organizations, payors and such other 
interested parties as the commission may determine. Other interested parties may 
testify at the hearing.
D.  A recommendation of the commission to modify the health care cost growth 
benchmark under this subsection must be approved by a 2/3 vote of the board.
4.  Health care entities.  The commission shall provide notice to all health care 
entities that have been identified as exceeding the health care cost growth benchmark for 
any given year.  The notice must state that, based on the commission's cost growth 
analysis of individual health care entities, beginning in calendar year 2024, the 
commission may require certain actions, as established in this section, from health care 
entities so identified. For the purposes of this section, "health care entity'' means a clinic, 
hospital, ambulatory surgical center, physician organization, accountable care 
organization or payor; except that a health care entity with a patient panel of 5,000 or 
fewer or that represents providers who collectively receive less than $10,000,000 in 
annual net patient service revenue from carriers is exempt.
A.  For calendar year 2023, if the commission finds, based on the commission's 
annual report, the commission's annual cost trend hearings or any other pertinent 
information, that the average percentage change in cumulative total health care 
expenditures from 2021 to 2022 exceeded the average health care cost growth 
benchmark from 2021 to 2022, and in order to support the State's efforts to meet 
future health care cost growth benchmarks, the commission shall establish procedures 
to assist health care entities to improve efficiency and reduce cost growth by 
requiring certain health care entities to file and implement a performance 
improvement plan.
B.  Beginning in calendar year 2024, if the commission finds, based on the 
commission's annual report, the commission's annual cost trend hearings or any other 
pertinent information, that the percentage change in total health care expenditures 
exceeded the health care cost growth benchmark in the previous calendar year, and in 
order to support the State's efforts to meet future health care cost growth benchmarks, 
the commission shall establish procedures to assist health care entities to improve 
efficiency and reduce cost growth by requiring certain health care entities to file and 
implement a performance improvement plan.
C.  In addition to the notice provided under this subsection, the commission may 
require a health care entity that is identified as exceeding the health care cost growth 
benchmark established under this section to file a performance improvement plan 
with the commission. The commission shall provide written notice to the health care 
entity that it is required to file a performance improvement plan. Within 45 days of 
receipt of the written notice, the health care entity shall either:
(1)  File a performance improvement plan with the commission; or
(2)  File an application with the commission to waive or extend the requirement 
to file a performance improvement plan.
D.  The health care entity may file any documentation or supporting evidence with 
the commission to support the health care entity's application to waive or extend the 
requirement to file a performance improvement plan under paragraph C. The 
commission shall require the health care entity to submit any other relevant 
information it determines necessary in considering the waiver or extension 
application; the information may be made public at the discretion of the commission.
E.  The commission may waive or extend the requirement for a health care entity to 
file a performance improvement plan in response to a waiver or extension request 
filed under paragraph C in light of all information received from the health care 
entity, based on consideration of the following factors:
(1)  The costs, price and utilization trends of the health care entity over time, and 
any demonstrated improvement to reduce total medical expenses;
(2)  Any ongoing strategies or investments that the health care entity is 
implementing to improve long-term efficiency and reduce cost growth;
(3)  Whether the factors that led to increased costs for the health care entity can 
reasonably be considered to be unanticipated and outside of the control of the 
entity. Such factors may include, but are not limited to, age and other health 
status adjusted factors and other cost inputs such as pharmaceutical expenses and 
medical device expenses;
(4)  The overall financial condition of the health care entity;
(5)  A significant difference between the growth rate of potential gross state 
product and the growth rate of actual gross state product; and
(6)  Any other factors the commission considers relevant.
F.  If the commission declines to waive or extend the requirement for the health care 
entity to file a performance improvement plan in response to a waiver or extension 
request filed under paragraph C, the commission shall provide written notice to the 
health care entity that its application for a waiver or extension was denied, and the 
health care entity shall file a performance improvement plan.
G.  A health care entity shall file a performance improvement plan:
(1)  Within 45 days of receipt of a notice under this subsection;
(2)  If the health care entity has requested a waiver or extension under paragraph 
C, within 45 days of receipt of a notice that the waiver or extension has been 
denied; or
(3)  If the health care entity is granted an extension, on the date given on the 
extension.
The performance improvement plan must be generated by the health care entity and 
identify the causes of the entity's cost growth and must include, but is not limited to, 
specific strategies, adjustments and action steps the entity proposes to implement to 
improve cost performance. The performance improvement plan must include specific 
identifiable and measurable expected outcomes and a timetable for implementation. 
The timetable for a performance improvement plan may not exceed 18 months.
H.  The commission shall approve any performance improvement plan that it 
determines is reasonably likely to address the underlying cause of the entity's cost 
growth and has a reasonable likelihood of successful implementation.
I.  If the board determines that the performance improvement plan is unacceptable or 
incomplete, the commission may provide consultation on the criteria that have not 
been met and may allow an additional time period, up to 30 days, for resubmission; 
however, all aspects of the performance improvement plan must be proposed by the 
health care entity and the commission may not require specific elements for approval.
J.  Upon approval of a performance improvement plan under paragraph H, the 
commission shall notify the health care entity to begin immediate implementation of 
the performance improvement plan. Public notice that the health care entity is 
implementing a performance improvement plan must be provided by the commission 
on its publicly accessible website. A health care entity implementing an approved 
performance improvement plan is subject to additional reporting requirements and 
compliance monitoring as determined by the commission. The commission shall 
provide assistance to the health care entity in the implementation of its performance 
improvement plan.
K.  A health care entity shall, in good faith, work to implement its performance 
improvement plan. At any point during the implementation of the performance 
improvement plan the health care entity may file amendments to the performance 
improvement plan, subject to approval of the commission.
L.  At the conclusion of the timetable established in the performance improvement 
plan under paragraph C, the health care entity shall report to the commission 
regarding the outcome of the performance improvement plan. If the performance 
improvement plan was found to be unsuccessful, the commission shall:
(1)  Extend the implementation timetable of the performance improvement plan;
(2)  Approve amendments to the performance improvement plan as proposed by 
the health care entity;
(3)  Require the health care entity to submit a new performance improvement 
plan under this subsection; or
(4)  Waive or extend the requirement to file any additional performance 
improvement plans.
M.  Upon the successful completion of its performance improvement plan, the 
identity of the health care entity must be removed from the commission's publicly 
accessible website.
N.  The commission may submit a recommendation for proposed legislation to the 
joint standing committee of the Legislature having jurisdiction over health care 
financing matters if the commission determines that further legislative authority is 
needed to achieve the health care quality and spending sustainability objectives of 
this chapter, assist health care entities with the implementation of performance 
improvement plans or otherwise ensure compliance with the provisions of this 
section.
O.  The commission may assess a civil penalty to a health care entity of not more 
than $500,000 if the commission determines that the health care entity has:
(1)  Willfully neglected to file a performance improvement plan with the 
commission within 45 days as required under paragraph C;
(2)  Failed to file an acceptable performance improvement plan in good faith with 
the commission;
(3)  Failed to implement the performance improvement plan in good faith; or
(4)  Knowingly failed to provide information required by this section to the 
commission or knowingly falsified the same.
The commission shall seek to promote compliance with this section and may impose 
a civil penalty only as a last resort.
5.  Health care quality measures and targets.  The commission shall develop health 
care quality measures and targets across all public and private payors in the State 
beginning in calendar year 2023.  In developing the health care quality targets, the 
commission shall review data from health care providers, health insurance carriers, public 
payors, the Maine Health Data Organization and national organizations, including a 
national quality assurance organization and the federal Department of Health and Human 
Services, Centers for Disease Control and Prevention.  The commission shall develop 
baseline quality measures and targets beginning for calendar year 2023, including targets 
for emergency department use, opioid overdose deaths and risk factors and cardiovascular 
health.
§7711.  Health care spending and prescription drug spending targets for public 
payors
1.  Health care spending targets; definition.  The board has the following powers 
and duties.  The board shall:
A.  Beginning with targets for the year 2021 and in consultation with the advisory 
council established under section 7709, determine annual health care spending targets 
for public payors based upon a 10-year rolling average of the medical care services 
component of the United States Department of Labor, Bureau of Labor Statistics 
Consumer Price Index medical care services index plus a reasonable percentage for 
inflation and minus a spending target determined by the board for cost savings 
including spending targets for prescription drugs as a subset of the overall health care 
spending targets;
B.  Determine spending targets on specific prescription drugs or health care services 
or procedures that may cause affordability challenges to enrollees in a public payor 
health plan; and
C.  Determine which public payors are likely to exceed the spending targets 
determined under paragraph A.
For the purposes of this section, "public payor" means any division of state, county or 
municipal government that administers a health plan for employees of that division of 
state, county or municipal government or an association of state, county or municipal 
employers that administers a health plan for its employees, except for the MaineCare 
program.
2.  Health care spending data.  The board may consider the following data to 
accomplish its duties under this section:
A.  A public payor's health care spending data, which the 3rd-party administrator or 
insurer for the public payor's health plan shall provide to the board on behalf of the 
public payor upon request notwithstanding any provision of law to the contrary, 
including:
(1)  Expenditures and utilization data for health care spending for each plan 
offered by a public payor including spending for prescription drugs as a subset of 
the overall health care spending;
(2)  Administrative expenses for each health plan offered by a public payor; and
(3)  Health plan premiums and enrollee cost sharing for each plan offered by a 
public payor; and
B.  Data compiled by the Maine Health Data Organization under Title 22, chapter 
1683.
Health care spending data provided to the board under this subsection is confidential to 
the same extent it is confidential while in the custody of the entity that provided the data 
to the board.
3.  Recommendations; prescription drug spending.  Based upon the prescription 
drug spending data received under subsection 2, the board, in consultation with a 
representative of each public payor identified under subsection 1, shall determine 
methods for the public payor to meet the spending targets established under subsection 1.  
The board shall determine whether the following methods reduce costs to individuals 
purchasing prescription drugs through a public payor and allow public payors to meet the 
spending targets established under subsection 1:
A.  Negotiating specific rebate amounts on the prescription drugs that contribute most 
to spending that exceeds the spending targets;
B.  Changing a formulary when sufficient rebates cannot be secured under paragraph 
A;
C.  Changing a formulary with respect to all of the prescription drugs of a 
manufacturer within a formulary when sufficient rebates cannot be secured under 
paragraph A;
D.  Establishing a common prescription drug formulary for all public payors;
E.  Prohibiting health insurance carriers in the State from offering on their 
formularies a prescription drug or any of the prescription drugs manufactured by a 
particular manufacturer when the method described in paragraph B or C is 
implemented;
F.  Purchasing prescription drugs in bulk or through a single purchasing agreement 
for use among public payors;
G.  Collaborating with other states and state prescription drug purchasing consortia to 
purchase prescription drugs in bulk or to jointly negotiate rebates;
H.  Allowing health insurance carriers providing coverage to small businesses and 
individuals in the State to participate in a public payor prescription drug benefit for a 
fee;
I.  Procuring common expert services for public payors, including but not limited to 
pharmacy benefit management services and actuarial services; and
J.  Any other method the board may determine.
4.  Recommendations; health care spending.  Based upon the health care spending 
data received under subsection 2, the board shall determine methods for a public payor to 
meet the health care spending targets established under subsection 1.  The board shall 
determine whether the following methods reduce costs to individuals covered through a 
public payor and allow public payors to meet the spending targets established under 
subsection 1 and make recommendations for their use:
A.  Changing health plan design among public payors to lower premiums and cost 
sharing;
B.  Establishing a global budget among public payors;
C.  Implementing reference-based pricing for use among public payors;
D.  Implementing value-based purchasing for use among public payors;
E.  Consolidating public payor health plans;
F.  Purchasing health care through a single purchasing agreement for use among 
public payors;
G.  Collaborating with other states for the purchase of certain health care services or 
to jointly negotiate with health care providers;
H.  Procuring common expert services for public payors related to the administration 
of health plans; and
I.  Any other method the board may determine.
5.  Report.  The board shall report its recommendations, including health care and 
prescription drug spending targets, and the progress of implementing those 
recommendations to the joint standing committee of the Legislature having jurisdiction 
over health coverage and insurance matters no later than October 1, 2020 and on January 
30th annually thereafter.  The joint standing committee may report out legislation based 
upon the report.
§7712.  Rules
The commission may adopt rules as necessary to implement this chapter.  Rules 
adopted in accordance with this section are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A.
Sec. 6.  Transition.  The following provisions apply to the establishment of the 
Maine Commission on Affordable Health Care pursuant to the Maine Revised Statutes, 
Title 24-A, chapter 97.
1. Board appointed.   Within 30 days of the effective date of this Act, the Governor, 
the President of the Senate and the Speaker of the House of Representatives shall post 
nominations for the appointment of the members of the Board of Directors of the Maine 
Commission on Affordable Health Care. As soon as practicable after Senate confirmation 
of board members, the board shall appoint the executive director pursuant to Title 24-A, 
section 7707.
2. Initial staffing; Bureau of Insurance.  Upon request from the Board of Directors 
of the Maine Commission on Affordable Health Care, the Department of Professional and 
Financial Regulation, Bureau of Insurance shall provide initial staffing assistance to the 
commission in the initial phases of its operations until the appointment of the executive 
director.  The executive director of the Maine Commission on Affordable Health Care 
shall hire staff and contract for services to implement this Act.
Sec. 7.  Staggered terms; Board of Directors of the Maine Commission on 
Affordable Health Care.  Notwithstanding the Maine Revised Statutes, Title 24-A, 
section 7703, subsection 2, of the members initially appointed to the Board of Directors 
of the Maine Commission on Affordable Health Care, 4 members must be appointed to 
serve initial terms of 2 years, 3 members must be appointed to serve initial terms of 3 
years and 2 members must be appointed to serve initial terms of 4 years.
Sec. 8.  Appropriations and allocations.  The following appropriations and 
allocations are made.
MAINE COMMISSION ON AFFORDABLE HEALTH CARE
Maine Commission on Affordable Health Care N340
Initiative: Establishes one Public Service Executive II position and one Comprehensive 
Health Planner II position starting August 1, 2020.
SUMMARY
This bill establishes the Maine Commission on Affordable Health Care to monitor 
health care spending growth in the State and also set health care quality benchmarks.  The 
bill also requires the commission to establish health care spending targets for public 
payors, including separate targets for prescription drugs.
GENERAL FUND
2019-20
2020-21
POSITIONS - LEGISLATIVE COUNT
0.000
2.000
Personal Services
$0
$195,345
GENERAL FUND TOTAL
$0
$195,345