0307-sb 0147

AN ACT relative to the data collection practices of health care providers, relative to the development of an uninsured health care database, and defining “unnecessary hardship” for purposes of zoning variances.

SPONSORS: Sen. Hassan, Dist 23; Sen. Cilley, Dist 6; Sen. Fuller Clark, Dist 24; Sen. Gilmour, Dist 12; Sen. Houde, Dist 5; Sen. Kelly, Dist 10; Sen. Merrill, Dist 21; Sen. Reynolds, Dist 2; Rep. Hammond, Hills 3; Rep. Donovan, Sull 4; Rep. Butler, Carr 1

I. Requires hospitals, community health centers, and hospital-owned providers to submit data to the department of health and human services for any person who is uninsured and whose care is not paid for by a governmental program.

II. Requires the commissioner of the insurance department and the commissioner of the department of health and human services to enter into a memorandum of understanding for collaboration in the development of a comprehensive uninsured health care database. The bill grants rulemaking authority to the commissioners for the purposes of the collaborative effort.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

Be it Enacted by the Senate and House of Representatives in General Court convened:

307:1 Statement of Purpose. The purpose of this act is to create a system to capture information on the provision of health care services to uninsured persons to obtain a better understanding of the impact of uninsured persons on public health, health care providers, and the commercial insurance market. With the increase in uninsured persons in New Hampshire and the escalating problem of the affordability of health insurance, the existing safety net, which relies on community health centers and hospitals, both with limited capacity, may not be sustainable. New Hampshire’s health care safety net is an integral and essential part of its health care financing and delivery system. It is vitally important to monitor each part of the system through the collection of data that identifies and quantifies how safety net services are accessed and used in New Hampshire. To the extent allowed by HIPAA, this data shall be available as a resource for insurers, employers, providers, purchasers of health care, and policymakers to review health care utilization and expenditures.

307:2 New Paragraphs; Health Care Data Collection; Waiver. Amend RSA 126:25 by inserting after paragraph III the following new paragraphs:

IV.(a) Health care data shall be submitted in accordance with rules adopted pursuant to RSA 126-S for the following entities:

(1) Licensed hospitals, as defined in RSA 151-C:2, XX, and pursuant to the memorandum of understanding entered into by the insurance department and the department of health and human services.

(2) Licensed health care providers, as defined by RSA 151-C:2, XXX, employed or legally controlled by a hospital with the exception of long-term care facilities.

(3) Hospital-owned physician practices which shall include all physician practices that are owned or controlled by a hospital or a financial intermediary of a hospital.

(4) Federally qualified community health centers as defined by section 330 of the Federal Public Health Service Act, 42 U.S.C. section 254b.

(5) Community health centers. For the purposes of this paragraph, “community health centers” are non-profit community based providers of comprehensive primary and preventive health care services to the state’s uninsured and Medicaid populations regardless of the patient’s ability to pay, and are governed by boards of directors that are at least 51 percent composed of health center patients.

(b) Hospitals shall submit the health care data required under this paragraph for the entities identified under subparagraphs (a)(1)-(3). Community health centers as identified under subparagraphs (a)(4) and (5) shall submit their health care data directly. The health care data shall include information for each service that includes dates of service, patient demographics, provider information, charge information, and clinical diagnosis, and procedure codes. Neither the state nor its agents shall collect or otherwise obtain direct personal identifiers in connection with any health care data relating to uninsured individuals. For the purposes of this section, “direct personal identifiers” includes information relating to an individual that contains primary or obvious identifiers such as the individual’s name, street address, e-mail address, telephone number, and social security number. An individual’s day of birth shall not be collected.

V.(a) A hospital may submit an application to the insurance commissioner for a one-year exemption from some or all of the reporting requirements set forth in paragraph IV. The commissioner shall grant the exemption if the hospital establishes that the data reporting would:

(3) Cause the hospital to reduce the amount of health care services that are delivered.

(b) To establish adverse impact and undue economic burden, the hospital shall demonstrate that it had an average operating margin of lower than one percent over the 3 preceding years.

(c) A hospital may request an extension of the reporting requirements as set forth in paragraph IV of up to one year to make the technical changes required to meet such reporting requirements, if it establishes that there are special circumstances that make compliance impracticable.

307:3 New Chapter; Uninsured Health Care Database. Amend RSA by inserting after chapter 126-R the following new chapter:

I. The commissioner of the insurance department and the commissioner of the department of health and human services shall enter into a memorandum of understanding for collaboration in the development of an uninsured health care database. The memorandum of understanding shall include a description of the uninsured database, the criteria and procedures for the collection and the release of the uninsured data set, the requirements for reporting information on the uninsured, and the sharing of the hospital discharge data set as described in RSA 126:25, I(d) and RSA 126:25, IV.

II. To the extent allowed by the Health Information Portability and Accountability Act (HIPAA), the data shall be available as a resource tool for policy analysts, insurers, legislators, employers, health care providers, purchasers of health care, and state agencies to review the uninsured population’s utilization of health care, the cost of services provided to the uninsured, and the effect of that utilization on the commercial insurance market.

III. The uninsured health care database shall not include any data that contains direct personal identifiers. For the purposes of this section, “direct personal identifiers” shall include information relating to an individual that contains primary identifiers, such as the individual’s name, street address, e-mail address, telephone number, and social security number.

IV. No provider shall be required to submit data until such time as the collection rules adopted pursuant to RSA 126-S:2 become effective.

I. The release of the health care data shall be subject to the same requirements as the release of the commercial claims data collected under RSA 420-G:11-a. The commissioner of the department of health and human services shall amend the existing rules adopted pursuant to RSA 541-A relative to the release of commercial claims data to include the release of uninsured data.

II. The insurance commissioner, in consultation with the commissioner of the department of health and human services, shall adopt rules under RSA 541-A, relative to the collection and submission of uninsured health care data. The insurance commissioner shall seek input on the data collection rules from an advisory group that includes representatives from provider organizations that are required to submit these data. The data collection rules shall require that the uninsured health care data be submitted to the insurance department and shall address:

(c) The contents of the data, which shall reflect data elements typically submitted to a commercial carrier on a CMS-1500 or UB-04 claim forms or any successor forms.

(h) Procedures and criteria for encrypting the data and ensuring that the data do not contain direct personal identifiers.

III. The insurance commissioner shall ensure that the data collection rules adopted pursuant to this section under RSA 541-A provide licensed health care providers the following options for the submission of health care data for the uninsured:

(a) The submission of hospital discharge data by licensed health care providers under RSA 126:25, I(d) shall be deemed to satisfy the data submission requirements set forth in RSA 126:25, IV.

(b) Electronic data sets submitted by licensed providers of health care and licensed health care providers not subject to submission pursuant to the hospital discharge data set in RSA 126:25, I(d) may contain similar data elements as required under the hospital discharge data set in RSA 126:25, I(d), and RSA 126:25, IV. The insurance department shall allow flexibility in the actual electronic format of such data to minimize the burden and costs to licensed providers of health care and licensed health care providers choosing to submit data in this format.

126-S:3 Report. The insurance commissioner shall make an annual report to the oversight committee on health and human services, established in RSA 126-A:13, and the house commerce and consumer affairs committee relative to the implementation of this chapter and the data analysis collected pursuant to this chapter.

307:4 Appropriation. For the purposes of implementing the provisions of RSA 126-S as inserted by section 3 of this act, the New Hampshire insurance department is hereby authorized and directed to seek governor and council approval to enter into an agreement with Bi-State Primary Care Association to administer an equitable system to distribute funds to community health centers subject to RSA 126-S to help defray its data submission costs. The sum of $70,000 for fiscal year 2010 and the sum of $50,000 for fiscal year 2011 shall be appropriated to the insurance department, class code 102 contracts for program services. The source of funds for this appropriation shall be the insurance department’s annual assessment pursuant to RSA 400-A:39.

307:5 Statement of Intent. The intent of section 6 of this act is to eliminate the separate “unnecessary hardship” standard for “area” variances, as established by the New Hampshire supreme court in the case of Boccia v. City of Portsmouth, 155 N.H. 84 (2004), and to provide that the unnecessary hardship standard shall be deemed satisfied, in both use and area variance cases, if the applicant meets the standards established in Simplex Technologies v. Town of Newington, 145 N.H. 727 (2001), as those standards have been interpreted by subsequent decisions of the supreme court. If the applicant fails to meet those standards, an unnecessary hardship shall be deemed to exist only if the applicant meets the standards prevailing prior to the Simplex decision, as exemplified by cases such as Governor’s Island Club, Inc. v. Town of Gilford, 124 N.H. 126 (1983).

307:6 Powers of Zoning Board of Adjustment; Variance. RSA 674:33, I(b) is repealed and reenacted to read as follows:

(b) Authorize, upon appeal in specific cases, a variance from the terms of the zoning ordinance if:

(5) Literal enforcement of the provisions of the ordinance would result in an unnecessary hardship.

(A) For purposes of this subparagraph, “unnecessary hardship” means that, owing to special conditions of the property that distinguish it from other properties in the area:

(i) No fair and substantial relationship exists between the general public purposes of the ordinance provision and the specific application of that provision to the property; and

(B) If the criteria in subparagraph (A) are not established, an unnecessary hardship will be deemed to exist if, and only if, owing to special conditions of the property that distinguish it from other properties in the area, the property cannot be reasonably used in strict conformance with the ordinance, and a variance is therefore necessary to enable a reasonable use of it.

The definition of “unnecessary hardship” set forth in subparagraph (5) shall apply whether the provision of the ordinance from which a variance is sought is a restriction on use, a dimensional or other limitation on a permitted use, or any other requirement of the ordinance.

307:7 Applicability. Section 6 of this act shall apply to any application or appeal for a variance that is filed on or after the effective date of this act.

The Department of Health and Human Services (DHHS) states this bill requires health care providers to submit health care claim data to the Department for any person who receives health care services and does not have health insurance, and whose care is not paid for by a governmental program. The bill also requires the Department of Insurance and DHHS to enter into a memorandum of understanding for collaboration in the development of a comprehensive uninsured health care database and to adopt administrative rules necessary to provide for the reporting and release of uninsured health data. The bill would give broad rulemaking authority to specify what data is submitted and how it is submitted. The Department is unable to determine the cost of the new system. The Department currently manages a system to collect similar data on the insured that costs $148,000 per year collecting data from approximately 30 insurance carriers. Additionally, the startup costs for this system were approximately $150,000. It is unknown how many different providers would be covered by this bill, so it is impossible to use this past experience to estimate the costs of the new system. The Department assumes that the number of providers subject to data submission under this bill will be many times larger than the universe of insurance carriers. To develop and manage the new system, a new full-time Business System Analyst (LG 28) would be required with salary and benefit costs of approximately $75,608 annually. The exact fiscal impact cannot be determined at this time.

The Department of Insurance assumes that this bill will increase a provider’s administrative costs for services provided to uninsured patients. The Department believes that revenues from uninsured patients are less than uninsured patients’ healthcare costs and that this shortfall

must be funded from other sources, typically other payors (cost-shifting). The state collects premium taxes on health insurance premiums, and to the extent that insurers increase their premiums to reflect any increased provider costs, and to the extent these costs are absorbed by employers, the state would realize an increase in revenue. The Department states it is not clear whether DHHS or the Department would be responsible for collecting this data. The Department assumes that the claims processing (collection) would be handled via a state contract. The Department estimates that the cost to process claims from providers would be 15 cents a claim and that there might be 500,000 claims per year, for a total cost per year of $75,000. The 15 cents would be subject to inflationary pressures. Both the Department and DHHS have contracts with the Maine Health Information Center (MHIC) to receive processed provider claims. The Department estimates that a one-time MHIC contract cost would be $45,000 to create the infrastructure to process these claims in addition to what is processed today. It is not clear which funds (general funds or insurance funds) would be responsible for these costs.

This bill does not establish positions or contain an appropriation.