HOUSE DOCKET, NO. 3095        FILED ON: 1/20/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2953

 

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Michael J. Finn

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act ensuring equitable distribution of reserves.

_______________

PETITION OF:

 

Name:

District/Address:

Date Added:

Michael J. Finn

6th Hampden

1/20/2017

José F. Tosado

9th Hampden

1/20/2017

Gerard Cassidy

9th Plymouth

1/20/2017


HOUSE DOCKET, NO. 3095        FILED ON: 1/20/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2953

By Mr. Finn of West Springfield, a petition (accompanied by bill, House, No. 2953) of Michael J. Finn, Jose F. Tosado and Gerard Cassidy that the Division of Insurance be authorized to conduct a study on the adequacy of reserves for payers and providers.  Financial Services.

 

The Commonwealth of Massachusetts

 

_______________

In the One Hundred and Ninetieth General Court
(2017-2018)

_______________

 

An Act ensuring equitable distribution of reserves.

 

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Notwithstanding any law or regulation to the contrary, the division of insurance shall conduct a study on the adequacy of reserves for both payers and providers. The study shall include the following: (1) current reserves held by payers, (2) current reserves held by providers, (3) a formula to calculate the minimum necessary reserves for payers based on their levels of risk, (4) a formula to calculate the minimum necessary reserves for providers based on their levels of risk, (5) a threshold of excess reserves, and (6) a methodology to calculate an appropriate transfer of reserves from payers to providers as providers take on increasing amounts of downside risk from payers. Minimum necessary reserves shall mean the amount of reserves required for a payer or provider to be fiscally solvent. The threshold of excess reserves shall represent an amount beyond what a payer or provider should reasonably hold above the necessary reserves amount. The level of risk shall mean the possible percentages of risk a provider or payer has in any risk sharing arrangement. Downside risk shall mean the risk taken on by a provider organization as part of an alternate payment contract with a carrier or other payer where the provider organization is responsible for either the full or partial costs of treating a group of patients that exceeds a contract's budgeted payment arrangements. 

Upon completion of this study, the division shall promulgate all necessary regulations to implement the findings of the study.

The division shall then issue a report on its findings to the senate and house committees on ways and means and the joint committee on health care financing by July 1, 2018.