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Utah Healthcare Reform Update

 

Email Alert

By David C. Gessel*

June 5, 2009

The Utah Legislature (Legislature) recently completed its second year of health reform efforts. A number of health reforms were legislated in 2008 and even more was done during the recently completed 2009 legislative session. In addition, the Legislature is continuing its Legislative Task Force on Healthcare Reform as it looks to more reform in 2010.

In 2008, the Utah Legislature embarked on its healthcare reform journey. Legislation was passed that improved provider transparency by creating an all-payor database to provide statewide quality and cost measures for episodes of care. Some of this information is already available to the public and more will be coming online later this year. The Legislature also approved standards for the electronic exchange of medical records by creating the Clinical Health Information Exchange (cHIE).

In 2008, the Legislature also improved access by permanently taking the cap off of enrollment for the Utah Children's Health Insurance Program (CHIP) as well as establishing a state income tax credit of up to 5% for individuals paying for health insurance with post-tax dollars. The Legislature also created the Office of Consumer Health Services that is tasked with creating an internet portal that promotes a consumer-oriented healthcare system by making information available to consumers so that they can make better informed healthcare decisions. Finally, the Legislature authorized a healthcare legislative task force to continue their reform efforts.

Even more far-reaching legislation was passed in the recently completed 2009 legislative session. The Legislature created a "defined contribution" program that will be operational first for the small group insurance market by January 1, 2010. In this market, employees will be able to choose any plan in the market on a guaranteed issue basis using pre-tax dollars. Rating and underwriting in this market will be based only on the employee's age and their employer's group-risk factor. The Legislature also created a Risk Adjuster Board that will guide the technical insurance issues related to keeping this market vibrant and functional. In addition, this defined contribution market will allow individuals and families to combine premium payments from multiple employer or government sources.

In 2009, the Utah Legislature also expanded the role of the internet portal in making information available to consumers. The internet portal is intended to be a one-stop information, shopping, and comparison tool for consumers buying health insurance and selecting providers. The portal provides the technical backbone to make the defined contribution market work in the individual and small group markets with the intent that it will be expanded in the future to all health insurance markets, if feasible. The Legislature also dealt with increased transparency by requiring insurance brokers and producers to disclose commissions and compensation to their clients.

In 2009, the Legislature also passed legislation with regard to administrative simplification between insurers and providers. This legislation takes the first steps to simplify billing, coordination of benefits, and prior authorization issues. For example, Utah's itemized billing law was streamlined to save significant resources. Other laws were changed to shorten the time frames of billing disputes and to clarify pre-authorization procedures. The legislation also requires providers and insurers to begin the process of moving to card swipe technology where both the patient and providers can know up-front, in real time what insurance requirements must be met with regard to co-pays, deductibles, and insurance status. In addition, the Legislature has passed legislation that will attempt to create a system-wide, broad-based demonstration project involving both payors and providers to start healthcare payment and delivery reform by aligning incentives better.

Finally, the Legislature also passed legislation requiring many contractors who bid on major state contracts above a certain dollar amount to prove that they provide at least basic health insurance to their employees before being awarded a state contract.

The legislative task force continues to meet and will work to implement the reforms already passed in 2008 and 2009 with an eye to also passing more state health reform legislation in the 2010 session.

*This synopsis has been provided by David C. Gessel, Vice President and Legal Counsel, Utah Hospitals and Health Systems Association, Salt Lake City, UT.

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