OREGON LEGISLATIVE SUMMARY (Final, June 29, 2007)
Submitted by Mike Becker, Director, Legislative and Regulatory Affairs

I. OVERVIEW

The Oregon Senate and House adjourned sine die Thursday afternoon, June 28, 2007, concluding the regular session of the 74th Legislative Assembly.  The session, which began on January 8th, lasted 172 days, making it the shortest session since 1995.  As expected, this legislature showed a strong commitment to education, health care and consumer protection.   Nearly 3000 bills were introduced, and Regence tracked or watched several hundred bills impacting health care, insurance, employer/employee relations and taxation.  All-in-all, a very busy session.

For the first time, the Legislature will reconvene in February, 2008 for a supplemental session.   Over the next 7 months, legislators will serve on interim committees preparing for the supplemental session.  

We can also expect numerous health care taskforces and workgroups over the next two years.  The most significant of which will be the new board and subcommittees created by SB 329, the major health care reform bill that will lead to a series of recommendations for the 2009 legislative session (more details below).

II. HEALTH CARE BILLS THAT PASSED

Major Health Care Reform-- Universal Access/Covering the Uninsured (SB 329).
For the past two years, Regence has been an active participant in all of Oregon’s comprehensive health care reform efforts (Oregon Business Council “OBC”, Archimedes Movement, the Senate Commission on Health Care Access & Affordability, and the Oregon Health Policy Commission).  These reform proposals were all intended to reduce the number of uninsured Oregonians, reduce cost, and improve the quality of health care delivery. 

"The Oregon Health Fund" (SB 329) was the bill that finally passed and was signed into law on June 28, 2007.  This bill, sponsored by Senators Bates & Westlund, creates a design process to be overseen by an executive director and seven member board of directors.  The board will be responsible for establishing subcommittees to develop recommendations on financing, delivery, a defined set of essential benefits, and eligibility & enrollment.  After an interim reporting process and series of public meetings, the recommendations will be presented to the 2009 legislature for consideration and approval.  There will also be a subcommittee to address and recommend changes to federal Medicare, Medicaid and taxation policies that have become barriers to reducing the number of uninsured Oregonians.  Regence is currently working to secure a gubernatorial appointment to the board for one of our senior executives, as well as placement of subject matter experts on the various subcommittees.

The final bill contained many components from the other Oregon health care reform efforts, including the examination of federal health care programs that are barriers to health care reform  (from Kitzhaber's Archimedes Movement); the concept of a health care "Exchange" to facilitate purchasing of health care benefits for individuals, uninsured groups and the low income/subsidized or Medicaid eligible populations (borrowed from OBC and the OHPC); and, the concepts of value-based purchasing, financial incentives and rewards to improve and maintain health, and personal portable electronic health records (borrowed from OBC and OHPC).  

The comprehensive plan will include an individual coverage mandate with low income subsidies and expanded Medicaid eligibility.  The Oregon Health Fund program will be optional for persons enrolled in commercial health insurance plans, self-insured programs, Taft-Hartley trusts or state or local governmental pools.  Similarly, employers who choose coverage under the Health Fund may also contract for benefits beyond the defined set of essential health services.

SB 329 is generally consistent with many of the health care reform principles advanced by Regence:   It recognizes the need to create an affordable, sustainable health care system; it builds on the foundation of consumer choice and shared responsibility for health and wellness; it recognizes that a sustainable health care system will require accountability, full transparency of provider quality and cost, and engagement of the patient and physician in evidence-based health care decision making.   Regence will continue our engagement in the design process to shape the direction of this reform proposal over the next two years. 

Former Governor Kitzhaber’s Archimedes Movement proposal (SB 27) did not pass.  He is now considering options for a ballot measure to take his plan directly to Oregon voters on November, 2008, or, the possibility of introducing his bill again in the 2008 special legislative session.  Representative Greenlick's HJR 18, the proposed voter referral that would make health care "a fundamental constitutional right," did not pass. 

Healthy Kids Plan (SB 3 and SJR 4).  Governor Kulongoski is closer to making good on his commitment to provide health care coverage for all children, through the “Healthy Kids Plan.”  SB 3 expands kid’s eligibility for the Oregon Health Plan (the state Medicaid program), to cover all other uninsured children under a private insurance pool with a sliding scale of subsidized premiums.  The bill also increases the number of school-based health centers.  The Healthy Kids Plan will provide free or subsidized health care for more than 100,000 children in Oregon who are currently uninsured.  The program will also be open to children who come from families with income above 300% of federal poverty, but these children will pay the full unsubsidized premiums.  Regence testified in favor of the Healthy Kids Plan.   SB 3 will NOT become law unless the funding mechanism (discussed below) is passed.

SJR 4 is the proposed funding mechanism for the Kids Plan.  It will ask Oregon voters to approve a constitutional amendment to create the new tobacco tax that will increase the Oregon cigarette tax by 84 cents a pack.   If this sounds like an unusual way to establish a new tax-- it is.  The constitutional referral was the only way the Democratically controlled legislature could get the new tax in play.   In Oregon, a new tax requires a 3/5ths majority to pass, and the Democrats couldn't convince enough Republicans to support this measure.  Legislative Council advised the Democratic leadership that a Constitutional referral to the voters does not require the super-majority legislative vote.  And thus we have the proposal for a tobacco tax in the Oregon constitution.  Regence is working with a coalition of stakeholders to help pass this referral. 

Transparency (HB 2213).  This bill will require health insurers to provide members with good faith estimates of out-of-pocket expenses—preferably using a web-based tool.  Regence participated in the workgroup that crafted the amended language for this proposal.   The bill has an effective date of July 1, 2009.  This legislation is (in part) an outgrowth of the Regence and Insurance Division initiative for additional transparency of hospital costs.  Under this initiative, hospital charge data was produced by insurers, and has been analyzed by the Oregon Office of Health Policy & Research (OOHPR).  In late July or early August, 2007, DCBS will launch an interactive web site to allow comparison of Oregon hospital’s “average aggregate allowed charge data” for the most common inpatient procedures.  This cost information will also be coordinated with hospital quality measures already reported by OOHPR.

Small Group Reform; Association Health Plans and Insurance Regulation (HB 2002, 3321 and 3103).    Regence, working with other carriers, managed to defeat a number of bills that would have established "public utility style rate regulation" of health insurers.  As part of the compromise leading to this result, the following bills passed:  

• (HB 3103)   Makes premium rate filings public at the time of filing—not merely after rate approval as under current law.  Filings would still be subject to trade secret protection.  
• (HB 2002 )  This bill expands the regulated small group pool to include groups of 2-50 employees, expands the rate bands to 3x1, and allows use of additional rating factors: (age of employees & all dependants; employee contribution and participation rates; tobacco usage; participation in wellness programs; group longevity with carrier; and, expected claim status).  This proposal no longer includes language requiring DCBS to consider carrier profit and investment income as part of individual and small group rate review and approval
•  (HB 3321)  This former utility style rate review bill was “gutted” with language creating a comprehensive overhaul of the Association Plan market segment covering small groups.  The proposed reforms should help minimize selection issues between insured and association business in the small group market.  Association plans covering small groups will not be allowed to discriminate in membership requirements based on actual or expected health status; must use a 3x1 rate band; must be open to all members (with grandfathering for existing AHPs); must maintain a 95% retention level; in-state and out-of-state associations must play by the same rules; associations will be subject to additional reporting, enforcement and claims experience monitoring. 

Opening the Oregon Rx Drug Purchasing Pool to all persons and entities (SB 362).  This bill creates a state financed and operated program to directly compete with commercial pharmacy benefit management programs.  Several Regence customers have compared Regence Rx to the Oregon Rx Pool, and we consistently win on this value comparison.  We expect increased competition from the state program, and political pressure will be put on governmental entities and unions to join the state pool regardless of increased cost.  In theory, groups can keep their private PBM drug programs, and also enroll their members in the state pool.  The supposed advantage is that the member will be able to access the best drug discount-- either under the private PBM drug card or through the state Rx discount card.  

OEBB--Pooling school employees under an Educational Benefit Board (SB 426).  Regence continues working with our customer, the Oregon School Board’s Association, to strategize and plan the transition to this new pooled arrangement for school employees.  The pool will be similar to PEBB, and administered by DAS.   Regence may be the only Oregon carrier able to take on the administration and risk of this large state-wide pool.   In the 2008 or 2009 legislative sessions we anticipate additional proposals for pooling city, county and municipal public employees.  

Reporting of Hospital Acquired Infection Rates (HB 2524).  Requires hospitals to collect and report data on Hospital acquired infection rates and report to OOHPR.  The quarterly reports will be publicly available. 

Prohibiting Hospitals From Charging Uninsured Patients More Than Medicare Rates or the Rates Paid by the Highest Volume Insurer  (HB 3088).   This hospital charge limitation applies to medically necessary services provided to families with incomes less than 350% of federal poverty. 

Hospital Community Benefit/Charity Care Reporting (HB 3290).  Requires standardized, cost-based reporting to OOHPR, with common definitions.  The annual reporting will be compiled by the department and available to the public. 

Regulation of Discount Medical Plans by DCBS (HB 2221).  Requires licensure from DCBS to operate discounts medical plans; requires licensees to have written contracts with providers; requires licensees to provide disclosures that the plan is not insurance, and offer 30 day grace period and refund procedures.  Requires discount medical plans to refrain from deceptive marketing, and provides penalties and enforcement. 

Comprehensive Plan for Diabetes Control (HB 3486).   The Department of Human Services shall develop, by the year 2009, a strategic plan to start to slow the
rate of diabetes caused by obesity and other environmental factors by the year 2010. The plan shall include:

• Identification of environmental factors that encourage or support physical activity and healthy eating habits;
• Identification of preventative strategies that are effective and culturally competent and that meet the populations most at risk for developing diabetes;
• Recommendations for evidence-based screening;
• Recommendations for redesigning and financing primary care practices that would facilitate adoption of the Chronic Care Model for screening for diabetes, support for patient self-management and regular reporting of preventative clinical screening results;
• Identification of actions to be taken to reduce the morbidity and mortality from diabetes by the year 2015 and a timeframe for taking those actions;

Health Insurance Mandates that PASSED.  Regence offered amendments to many of the mandates to minimize or eliminate any impact on our business and make the proposals consistent with our current medical policy and benefit language.   We continued to argue throughout the session that all mandates come with additional cost, and the cumulative impact on premiums is significant.  Nonetheless, the legislature saw fit to pass the following mandates:

• Prosthetics & orthotics (HB-2517)
• Oral medications for chemotherapy (SB 8) 
• Bilateral cochlear implants (SB 491) 
• Contraceptives (HB 2700) 
• Autism/PDD coverage to age 18 for manual therapies-- PT, OT & ST (HB 2918) 
• Acupuncture (renews an existing mandate that previously sunset) (SB-59) 
• Coverage physician assistant services not billed by a physician (SB 676) 
• Repeal of coverage exclusion due to use of intoxicants (HB 2384): 
• Fees for medical records (SB 591): 

The following mandates DID NOT PASS:  Infertility (SB 446 & 486); obesity/gastric bypass (SB 930); papillomavirus vaccine (HB 3253); hearing aids for children (SB 14); topical fluoride treatment (SB 803); dental prompt pay (HB 3094); insurance surcharge for medical malpractice (HB 3090); bone mass measurement (HB 2953); telemedicine (SB 519); licensed practical counselors & marriage/family counselors (HB 2687 & SB 452); Kids Network providers (HB 2850); chiropractic/AWP (SB-407, HBs 2840, 2984, 3209).  We expect to see many of these mandates offered in future legislative sessions. 

Other Health Care Bills that DID NOT PASS:

• A new “bad-faith” cause of action against insurers (HB 3075);
• Limiting OMIP rates to 100% of individual market (HB 2440);
• Direct payment and co-pay checks to non-par providers (HB 3226 and SB 651);
• Coverage for motorcycle accidents (SB 356);
• The Oregon Medical Association bill (SB 924) requiring insurance carriers to pay non-network providers 95% of the contracted provider rate, prohibiting payment differentials or steerage to participating providers; and prohibiting network leasing or rental;
• Health Plan Rates Tied to Cost of Living/CPI (HB 3355);
• Dental Prompt Pay (HB 3094);
• Health Insurance Surcharge for Medical Malpractice (HB 3090);
• Privacy Audits/CEO Certification of Privacy Compliance (HB 2733);
• Chamber Association Plans (HB 3300);
• Rx prescribing authority for psychologists (HB 2800);
• PHARMA/drug detailing and gifts to physicians (HB  2523 & 2648)
• Limitations on Ambulatory Surgery Centers and services in ASCs (a Hospital Association bill)  (HB 3269).

III. OTHER BILLS OF INTEREST

• Security of Personally Identifiable Information--ID Theft Protection (SB 583).  Regulates data security across all industries and sets standards for safeguarding personal information; prohibits the display of more than the last four digits of a social security number; requires notification to consumers if there is a breach of security; and gives consumers the right to request a security freeze of their credit file.  For the health care industry (including insurers), compliance with federal HIPAA requirements will provide a safe-harbor. 

• Protection From Discrimination Based on Sexual Orientation (SB 2).  

• Family Fairness Act (HB 2007).  Grants legal rights to same-sex couples who register their partnerships with the state. 

• Employers to Provide Unpaid Rest Periods and Private Location for Breast-feeding Mothers (HB 2372).  Applies to employers with 25 or more employees, and rest periods not required if undue hardship.  Requires reasonable efforts to provide a private location for expressing milk or breast-feeding. 

• Clean-Indoor Air Act (SB 571).  Expands the indoor smoking ban to include bingo halls, bars, taverns and restaurants protecting Oregon’s workers from unnecessary exposure to harmful secondhand smoke in the workplace.

• Fire-safe Cigarettes (HB 2163).  Requires sale of fire-safe cigarettes in Oregon.

• Food and Beverage Standards in Schools (HB 2650).  Removes junk-food from schools. 

• Physical Education in Schools (HB 3141).   Requires elementary schools to provide 2.5 hours of PE per week, and middle schools to provide 3.45 hours of PE per week.  Mandatory PE minutes will be fully phased in by 2017. 

• Medicaid Provider Tax (HB 3057).  The Medicaid provider tax on hospitals and LTC facilities was extended, and the maximum tax rate was lowered from 3% to 1.5%.  This tax provides state matching funds for expansion of the Oregon Health Plan.

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