Bill Text: OR SB101 | 2011 | Regular Session | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relating to health care; and declaring an emergency.

Spectrum: Unknown

Status: (Passed) 2011-08-03 - Effective date, August 2, 2011. [SB101 Detail]

Download: Oregon-2011-SB101-Engrossed.html

---

     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 660

                           B-Engrossed

                         Senate Bill 101
                  Ordered by the Senate June 21
     Including Senate Amendments dated April 12 and June 21

Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Governor John A. Kitzhaber
  for Oregon Health Authority)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.

  Authorizes payment for dental services under Family Health
Insurance Assistance Program and under private health option of
Health Care for All Oregon Children program. Specifies
requirements for dental plan to qualify for premium assistance
under Family Health Insurance Assistance Program.
   { +  Requires Oregon Health Authority to obtain authority to
implement, on September 1, 2011, new Medicaid fee schedule.
Requires negotiating of new contract between hospitals and fully
capitated health plans in anticipation of new schedule. Sets
rates of reimbursement for hospitals and fully capitated health
plans that do not have contract. Eliminates sunset on provision
regulating setting of such rates. + }
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to health care; creating new provisions; amending ORS
  414.025, 414.743, 414.826, 414.841, 414.842, 414.844 and
  414.851; repealing sections 6, 7 and 8, chapter 886, Oregon
  Laws 2009; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 414.826 is amended to read:
  414.826. (1) As used in this section:
  (a) 'Child' means a person under 19 years of age who is
lawfully present in this state.
   { +  (b) 'Dental plan' has the meaning given that term in ORS
414.841. + }
    { - (b) - }  { +  (c) + } 'Health benefit plan' has the
meaning given that term in ORS 414.841.
  (2) The Office of Private Health Partnerships shall administer
a private health option to expand access to private health
insurance for Oregon's children.
  (3) The office shall adopt by rule criteria for health benefit
plans to qualify for premium assistance under the private health

option. The criteria may include, but are not limited to, the
following:
  (a) The health benefit plan meets or exceeds the requirements
for a basic benchmark health benefit plan under ORS 414.856.
  (b) The health benefit plan offers a benefit package comparable
to the health services provided to children receiving medical
assistance, including mental health, vision and dental services,
and without any exclusion of or delay of coverage for preexisting
conditions.
  (c) The health benefit plan imposes copayments or other cost
sharing that is based upon a family's ability to pay.
  (d) Expenditures for the health benefit plan qualify for
federal financial participation.
   { +  (4) To qualify for premium assistance under the private
health option:
  (a) A dental plan must provide coverage of dental services
necessary to prevent disease and promote oral health, restore
oral structures to health and function and treat emergency
conditions.
  (b) Expenditures for the dental plan must qualify for federal
financial participation. + }
    { - (4) - }  { +  (5) + } The amount of premium assistance
provided under this section shall be:
  (a) Equal to the full cost of the   { - premium - }  { +
premiums for a health benefit plan and a dental plan + } for
children whose family income is at or below 200 percent of the
federal poverty guidelines and who have access to employer
sponsored health insurance; and
  (b) Based on a sliding scale under criteria established by the
office by rule for children whose family income is above 200
percent but at or below 300 percent of the federal poverty
guidelines, regardless of whether the child has access to
coverage under an employer sponsored health benefit plan { +  or
dental plan + }.
    { - (5) - }   { + (6) + } A child whose family income is more
than 300 percent of the federal poverty guidelines shall be
offered the opportunity to purchase a health benefit plan  { + or
dental plan + } through the private health option but may not
receive premium assistance.
  SECTION 2. ORS 414.841 is amended to read:
  414.841. For purposes of ORS 414.841 to 414.864:
  (1) 'Carrier' has the meaning given that term in ORS 735.700.
   { +  (2) 'Dental plan' means a policy or certificate of group
or individual health insurance, as defined in ORS 731.162,
providing payment or reimbursement only for the expenses of
dental care. + }
    { - (2) - }  { +  (3) + } 'Eligible individual' means an
individual who:
  (a) Is a resident of the State of Oregon;
  (b) Is not eligible for Medicare;
  (c)  { + Is + } either { + :
  (A) For health benefit plan coverage other than dental plans, a
person who + } has been without health benefit plan coverage for
a period of time established by the Office of Private Health
Partnerships  { - , - }  or meets exception criteria established
by the office; { +  or
  (B) For dental plan coverage, an individual under 19 years of
age who is uninsured or underinsured with respect to dental plan
coverage; + }
  (d) Except as otherwise provided by the office, has family
income   { - less than - }   { + at or below + } 200 percent of
the federal poverty level; { +  and + }
    { - (e) Has investments and savings less than the limit
established by the office; and - }
    { - (f) - }  { +  (e) + } Meets other eligibility criteria
established by the office.
    { - (3)(a) - }  { +  (4)(a) + } 'Family' means:
  (A) A single individual;
  (B) An adult and the adult's spouse;
  (C) An adult and the adult's spouse, all unmarried, dependent
children under 23 years of age, including adopted children,
children placed for adoption and children under the legal
guardianship of the adult or the adult's spouse, and all
dependent children of a dependent child; or
  (D) An adult and the adult's unmarried, dependent children
under 23 years of age, including adopted children, children
placed for adoption and children under the legal guardianship of
the adult, and all dependent children of a dependent child.
  (b) A family includes a dependent elderly relative or a
dependent adult child with a disability who meets the criteria
established by the office and who lives in the home of the adult
described in paragraph (a) of this subsection.
    { - (4)(a) - }  { +  (5)(a) + } 'Health benefit plan' means a
policy or certificate of group or individual health insurance, as
defined in ORS 731.162, providing payment or reimbursement for
hospital, medical and surgical expenses. 'Health benefit plan'
includes a health care service contractor or health maintenance
organization subscriber contract, the Oregon Medical Insurance
Pool and any plan provided by a less than fully insured multiple
employer welfare arrangement or by another benefit arrangement
defined in the federal Employee Retirement Income Security Act of
1974, as amended.
  (b) 'Health benefit plan' does not include coverage for
accident only, specific disease or condition only, credit,
disability income, coverage of Medicare services pursuant to
contracts with the federal government, Medicare supplement
insurance, student accident and health insurance, long term care
insurance, hospital indemnity only,   { - dental only, - }
vision only, coverage issued as a supplement to liability
insurance, insurance arising out of a workers' compensation or
similar law, automobile medical payment insurance, insurance
under which the benefits are payable with or without regard to
fault and that is legally required to be contained in any
liability insurance policy or equivalent self-insurance or
coverage obtained or provided in another state but not available
in Oregon.
    { - (5) - }  { +  (6) + } 'Income' means gross income in cash
or kind available to the applicant or the applicant's family.
Income does not include earned income of the applicant's children
or income earned by a spouse if there is a legal separation.
    { - (6) 'Investment and savings' means cash, securities as
defined in ORS 59.015, negotiable instruments as defined in ORS
73.0104 and such similar investments or savings as the office may
establish that are available to the applicant or the applicant's
family to contribute toward meeting the needs of an applicant or
eligible individual. - }
  (7) 'Medicaid' means medical assistance provided under 42
U.S.C. section 1396a (section 1902 of the Social Security Act).
  (8) 'Resident' means an individual who meets the residency
requirements established by rule by the office.
  (9) 'Subsidy' means payment or reimbursement to an eligible
individual toward the purchase of a health benefit plan, and may
include a net billing arrangement with carriers or a prospective
or retrospective payment for health benefit plan premiums and
eligible copayments or deductible expenses directly related to
the eligible individual.
  (10) 'Third-party administrator' means any insurance company or
other entity licensed under the Insurance Code to administer
health   { - insurance - }  benefit   { - programs - }  { +
plans + }.
  SECTION 3. ORS 414.844 is amended to read:

  414.844. (1) To enroll in the Family Health Insurance
Assistance Program established in ORS 414.841 to 414.864, an
applicant shall submit a written application to the Office of
Private Health Partnerships or to the third-party administrator
contracted by the office to administer the program pursuant to
ORS 414.842 in the form and manner prescribed by the office.
Except as provided in ORS 414.848, if the applicant qualifies as
an eligible individual, the applicant shall either be enrolled in
the program or placed on a waiting list for enrollment.
  (2) After an eligible individual has enrolled in the program,
the individual shall remain eligible for enrollment for the
period of time established by the office.
  (3) After an eligible individual has enrolled in the program,
the office or third-party administrator shall issue subsidies in
an amount determined pursuant to ORS 414.846 to either the
eligible individual or to the carrier designated by the eligible
individual, subject to the following restrictions:
  (a) Subsidies may not be issued to an eligible individual
unless all eligible children, if any, in the eligible
individual's family are covered under a health benefit plan or
Medicaid.
  (b) Subsidies may not be used to subsidize premiums on a health
benefit plan whose premiums are wholly paid by the eligible
individual's employer without contribution from the employee.
  (c) Such other restrictions as the office may adopt.
  (4) The office may issue subsidies to an eligible individual in
advance of a purchase of a health benefit plan.
  (5) To remain eligible for a subsidy, an eligible individual
must enroll in a group health benefit plan if a plan is available
to the eligible individual through the individual's employment
and the employer makes a monetary contribution toward the cost of
the plan, unless the office implements specific cost or benefit
structure criteria that make enrollment in an individual health
insurance plan more advantageous for the eligible individual.
    { - (6) Notwithstanding ORS 414.841 (4)(b), if an eligible
individual is enrolled in a group health benefit plan available
to the eligible individual through the individual's employment
and the employer requires enrollment in both a health benefit
plan and a dental plan, the individual is eligible for a subsidy
for both the health benefit plan and the dental plan. - }
  SECTION 4. ORS 414.851 is amended to read:
  414.851.  { + (1) + } The Office of Private Health Partnerships
may, based on the recommendation of the Administrator of the
Office for Oregon Health Policy and Research, establish minimum
benefit requirements for individual health benefit plans subject
to subsidy pursuant to the Family Health Insurance Assistance
Program, including but not limited to the type of services
covered and the amount of cost sharing to be allowed.
   { +  (2) To qualify for premium assistance under the Family
Health Insurance Assistance Program:
  (a) A dental plan must provide coverage of dental services
necessary to prevent disease and promote oral health, restore
oral structures to health and function and treat emergency
conditions.
  (b) Expenditures for the dental plan must qualify for federal
financial participation. + }
  SECTION 5. ORS 414.025, as amended by section 1, chapter 73,
Oregon Laws 2010, is amended to read:
  414.025. As used in this chapter, unless the context or a
specially applicable statutory definition requires otherwise:
  (1) 'Category of aid' means assistance provided by the Oregon
Supplemental Income Program, aid granted under ORS 412.001 to
412.069 and 418.647 or federal Supplemental Security Income
payments.

  (2) 'Categorically needy' means, insofar as funds are available
for the category, a person who is a resident of this state and
who:
  (a) Is receiving a category of aid.
  (b) Would be eligible for a category of aid but is not
receiving a category of aid.
  (c) Is in a medical facility and, if the person left such
facility, would be eligible for a category of aid.
  (d) Is under the age of 21 years and would be a dependent child
as defined in ORS 412.001 except for age and regular attendance
in school or in a course of professional or technical training.
  (e)(A) Is a caretaker relative, as defined in ORS 412.001, who
cares for a child who would be a dependent child except for age
and regular attendance in school or in a course of professional
or technical training; or
  (B) Is the spouse of the caretaker relative.
  (f) Is under the age of 21 years and:
  (A) Is in a foster family home or licensed child-caring agency
or institution and is one for whom a public agency of this state
is assuming financial responsibility, in whole or in part; or
  (B) Is 18 years of age or older, is one for whom federal
financial participation is available under Title XIX or XXI of
the federal Social Security Act and who met the criteria in
subparagraph (A) of this paragraph immediately prior to the
person's 18th birthday.
  (g) Is a spouse of an individual receiving a category of aid
and who is living with the recipient of a category of aid, whose
needs and income are taken into account in determining the cash
needs of the recipient of a category of aid, and who is
determined by the Department of Human Services to be essential to
the well-being of the recipient of a category of aid.
  (h) Is a caretaker relative as defined in ORS 412.001 who cares
for a dependent child receiving aid granted under ORS 412.001 to
412.069 and 418.647 or is the spouse of the caretaker relative.
  (i) Is under the age of 21 years, is in a youth care center and
is one for whom a public agency of this state is assuming
financial responsibility, in whole or in part.
  (j) Is under the age of 21 years and is in an intermediate care
facility which includes institutions for persons with mental
retardation.
  (k) Is under the age of 22 years and is in a psychiatric
hospital.
  (L) Is under the age of 21 years and is in an independent
living situation with all or part of the maintenance cost paid by
the Department of Human Services.
  (m) Is a member of a family that received aid in the preceding
month under ORS 412.006 or 412.014 and became ineligible for aid
due to increased hours of or increased income from employment. As
long as the member of the family is employed, such families will
continue to be eligible for medical assistance for a period of at
least six calendar months beginning with the month in which such
family became ineligible for assistance due to increased hours of
employment or increased earnings.
  (n) Is an adopted person under 21 years of age for whom a
public agency is assuming financial responsibility in whole or in
part.
  (o) Is an individual or is a member of a group who is required
by federal law to be included in the state's medical assistance
program in order for that program to qualify for federal funds.
  (p) Is an individual or member of a group who, subject to the
rules of the department, may optionally be included in the
state's medical assistance program under federal law and
regulations concerning the availability of federal funds for the
expenses of that individual or group.

  (q) Is a pregnant woman who would be eligible for aid granted
under ORS 412.001 to 412.069 and 418.647, whether or not the
woman is eligible for cash assistance.
  (r) Except as otherwise provided in this section, is a pregnant
woman or child for whom federal financial participation is
available under Title XIX or XXI of the federal Social Security
Act.
  (s) Is not otherwise categorically needy and is not eligible
for care under Title XVIII of the federal Social Security Act or
is not a full-time student in a post-secondary education program
as defined by the Department of Human Services by rule, but whose
family income is   { - less than - }   { + at or below + } the
federal poverty level and whose family investments and savings
equal less than the investments and savings limit established by
the department by rule.
  (t) Would be eligible for a category of aid but for the receipt
of qualified long term care insurance benefits under a policy or
certificate issued on or after January 1, 2008. As used in this
paragraph, 'qualified long term care insurance' means a policy or
certificate of insurance as defined in ORS 743.652 (6).
  (u) Is eligible for the Health Care for All Oregon Children
program established in ORS 414.231.
  (3) 'Income' has the meaning given that term in ORS 411.704.
  (4) 'Investments and savings' means cash, securities as defined
in ORS 59.015, negotiable instruments as defined in ORS 73.0104
and such similar investments or savings as the Department of
Human Services may establish by rule that are available to the
applicant or recipient to contribute toward meeting the needs of
the applicant or recipient.
  (5) 'Medical assistance' means so much of the following medical
and remedial care and services as may be prescribed by the Oregon
Health Authority according to the standards established pursuant
to ORS   { - 413.032 - }  { +  414.065 + }, including
 { + premium assistance and + } payments made for services
provided under an insurance or other contractual arrangement and
money paid directly to the recipient for the purchase of medical
care:
  (a) Inpatient hospital services, other than services in an
institution for mental diseases;
  (b) Outpatient hospital services;
  (c) Other laboratory and X-ray services;
  (d) Skilled nursing facility services, other than services in
an institution for mental diseases;
  (e) Physicians' services, whether furnished in the office, the
patient's home, a hospital, a skilled nursing facility or
elsewhere;
  (f) Medical care, or any other type of remedial care recognized
under state law, furnished by licensed practitioners within the
scope of their practice as defined by state law;
  (g) Home health care services;
  (h) Private duty nursing services;
  (i) Clinic services;
  (j) Dental services;
  (k) Physical therapy and related services;
  (L) Prescribed drugs, including those dispensed and
administered as provided under ORS chapter 689;
  (m) Dentures and prosthetic devices; and eyeglasses prescribed
by a physician skilled in diseases of the eye or by an
optometrist, whichever the individual may select;
  (n) Other diagnostic, screening, preventive and rehabilitative
services;
  (o) Inpatient hospital services, skilled nursing facility
services and intermediate care facility services for individuals
65 years of age or over in an institution for mental diseases;
  (p) Any other medical care, and any other type of remedial care
recognized under state law;
  (q) Periodic screening and diagnosis of individuals under the
age of 21 years to ascertain their physical or mental
impairments, and such health care, treatment and other measures
to correct or ameliorate impairments and chronic conditions
discovered thereby;
  (r) Inpatient hospital services for individuals under 22 years
of age in an institution for mental diseases; and
  (s) Hospice services.
  (6) 'Medical assistance' includes any care or services for any
individual who is a patient in a medical institution or any care
or services for any individual who has attained 65 years of age
or is under 22 years of age, and who is a patient in a private or
public institution for mental diseases. 'Medical assistance '
includes 'health services' as defined in ORS 414.705. 'Medical
assistance' does not include care or services for an inmate in a
nonmedical public institution.
  (7) 'Medically needy' means a person who is a resident of this
state and who is considered eligible under federal law for
medically needy assistance.
  (8) 'Resources' has the meaning given that term in ORS 411.704.
For eligibility purposes, 'resources' does not include charitable
contributions raised by a community to assist with medical
expenses.
  SECTION 6. ORS 414.842 is amended to read:
  414.842. (1) There is established the Family Health Insurance
Assistance Program in the Office of Private Health Partnerships.
The purpose of the program is to remove economic barriers to
health insurance coverage for residents of the State of Oregon
with family income   { - less than - }  { +  at or below + } 200
percent of the federal poverty level  { - , and investment and
savings less than the limit established by the office, - }  while
encouraging individual responsibility, promoting health benefit
plan coverage of children, building on the private sector health
benefit plan system and encouraging employer and employee
participation in employer-sponsored health benefit plan coverage.
  (2) The Office of Private Health Partnerships shall be
responsible for the implementation and operation of the Family
Health Insurance Assistance Program. The Administrator of the
Office for Oregon Health Policy and Research, in consultation
with the Oregon Health Policy Board, shall make recommendations
to the Office of Private Health Partnerships regarding program
policy, including but not limited to eligibility requirements,
assistance levels, benefit criteria and carrier participation.
  (3) The Office of Private Health Partnerships may contract with
one or more third-party administrators to administer one or more
components of the Family Health Insurance Assistance Program.
Duties of a third-party administrator may include but are not
limited to:
  (a) Eligibility determination;
  (b) Data collection;
  (c) Assistance payments;
  (d) Financial tracking and reporting; and
  (e) Such other services as the office may deem necessary for
the administration of the program.
  (4) If the office decides to enter into a contract with a
third-party administrator pursuant to subsection (3) of this
section, the office shall engage in competitive bidding. The
office shall evaluate bids according to criteria established by
the office, including but not limited to:
  (a) The bidder's proven ability to administer a program of the
size of the Family Health Insurance Assistance Program;
  (b) The efficiency of the bidder's payment procedures;
  (c) The estimate provided of the total charges necessary to
administer the program; and
  (d) The bidder's ability to operate the program in a
cost-effective manner.
  SECTION 7.  { + (1) As used in this section, 'fully capitated
health plan' has the meaning given that term in ORS 414.736.
  (2) The Oregon Health Authority shall proceed with all due
diligence and speed to obtain the appropriate authorization to
implement on September 1, 2011, a new Medicaid fee schedule that
is based upon the legislatively approved budget.
  (3) Before September 1, 2011, a hospital and a fully capitated
health plan shall maintain their existing contract for the
provision of inpatient or outpatient hospital services under ORS
414.705 to 414.750, unless the hospital and the plan mutually
agree upon a change to the contract. During this time, the
hospital and the plan shall work in good faith to negotiate a new
contract in anticipation of the implementation of a new Medicaid
fee schedule on September 1, 2011.
  (4) On or after September 1, 2011, a fully capitated health
plan that does not have a contract with a hospital that provides
10 percent or more of hospital admissions and outpatient hospital
services to enrollees of the plan may, when mutually agreed to by
the plan and the hospital, engage in binding arbitration. The
binding arbitration must be completed no later than December 1,
2011. The hospital and the plan shall agree upon the arbitrator.
  (5) The authority shall report to the Legislative Assembly no
later than February 1, 2012, the results of the contracting
carried out under this section. + }
  SECTION 8. ORS 414.743 is amended to read:
  414.743. (1)  { + Except as provided in subsection (2) of this
section, + } a fully capitated health plan that does not have a
contract with a hospital to provide inpatient or outpatient
hospital services under ORS 414.705 to 414.750 must, using
 { - a - } Medicare payment methodology, reimburse the
noncontracting hospital for services provided to an enrollee of
the plan at a rate no less than a percentage of the Medicare
reimbursement rate for those services. The percentage of the
Medicare reimbursement rate that is used to determine the
reimbursement rate under this subsection is equal to
 { - two - }  { +  four + } percentage points less than the
percentage of Medicare cost used by the authority in calculating
the base hospital capitation payment to the plan, excluding any
supplemental payments.
   { +  (2)(a) If a fully capitated health plan does not have a
contract with a hospital, and the hospital provides less than 10
percent of the hospital admissions and outpatient hospital
services to enrollees of the plan, the percentage of the Medicare
reimbursement rate that is used to determine the reimbursement
rate under subsection (1) of this section is equal to two
percentage points less than the percentage of Medicare cost used
by the Oregon Health Authority in calculating the base hospital
capitation payment to the plan, excluding any supplemental
payments.
  (b) This subsection is not intended to discourage a fully
capitated health plan and a hospital from entering into a
contract and is intended to apply to hospitals that provide
primarily, but not exclusively, specialty and emergency care to
enrollees of the plan. + }
    { - (2) - }  { +  (3) + } A hospital that does not have a
contract with a fully capitated health plan to provide inpatient
or outpatient hospital services under ORS 414.705 to 414.750 must
accept as payment in full for hospital services the rates
described in
  { - subsection (1) - }  { +  subsections (1) and (2) + } of
this section.
    { - (3) - }  { +  (4) + } This section does not apply to type
A and type B hospitals, as described in ORS 442.470, and rural
critical access hospitals, as defined in ORS 315.613.
    { - (4) - }  { +  (5) + } The Oregon Health Authority shall
adopt rules to implement and administer this section.
  SECTION 9.  { + (1) Sections 7 and 8, chapter 886, Oregon Laws
2009, are repealed.
  (2) The amendments to ORS 414.736 by section 6, chapter 886,
Oregon Laws 2009, are repealed. + }
  SECTION 10.  { + (1) The amendments to ORS 414.826, 414.841,
414.844 and 414.851 by sections 1 to 4 of this 2011 Act become
operative January 1, 2012.
  (2) The amendments to ORS 414.743 by section 8 of this 2011 Act
become operative September 1, 2011. + }
  SECTION 11.  { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
                         ----------