72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 2511
Sponsored by Representative KRUSE; Senator WINTERS
CHAPTER ................
AN ACT
Relating to Department of Human Services; creating new
provisions; amending ORS 414.705, 414.720, 414.725 and 414.839
and section 3, chapter ___, Oregon Laws 2003 (Enrolled House
Bill 2160); repealing ORS 414.821, 414.823, 414.827, 414.829,
414.833, 414.834, 414.835 and 414.837; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 414.705 is amended to read:
414.705. { + (1) + } As used in ORS 414.705 to 414.750,
'health services' means at least so much of each of the following
as are approved and funded by the Legislative Assembly:
{ - (1) Provider services and supplies; - }
{ - (2) Outpatient services; - }
{ - (3) Inpatient hospital services; and - }
{ - (4) Health promotion and disease prevention services. - }
{ + (a) Services required by federal law to be included in
the state's medical assistance program in order for the program
to qualify for federal funds;
(b) Services provided by a physician as defined in ORS 677.010,
a nurse practitioner certified under ORS 678.375 or other
licensed practitioner within the scope of the practitioner's
practice as defined by state law, and ambulance services;
(c) Prescription drugs;
(d) Laboratory and X-ray services;
(e) Medical supplies;
(f) Mental health services;
(g) Chemical dependency services;
(h) Emergency dental services;
(i) Nonemergency dental services;
(j) Provider services, other than services described in
paragraphs (a) to (i), (k), (L) and (m) of this subsection,
defined by federal law that may be included in the state's
medical assistance program;
(k) Emergency hospital services;
(L) Outpatient hospital services; and
(m) Inpatient hospital services.
(2) Health services approved and funded under subsection (1) of
this section are subject to the prioritized list of health
services required in ORS 414.720. + }
SECTION 2. { + Sections 3, 4, 4a and 11 of this 2003 Act are
added to and made a part of ORS 414.705 to 414.750. + }
Enrolled House Bill 2511 (HB 2511-C) Page 1
SECTION 3. { + The Legislative Assembly shall approve and fund
health services to the following persons:
(1) Persons who are categorically needy as described in ORS
414.025 (2)(n) and (o);
(2) Pregnant women with incomes no more than 185 percent of the
federal poverty guidelines;
(3) Persons under 19 years of age with incomes no more than 200
percent of the federal poverty guidelines;
(4) Persons described in section 11 of this 2003 Act; and
(5) Persons 19 years of age or older with incomes no more than
100 percent of the federal poverty guidelines who do not have
federal Medicare coverage. + }
SECTION 4. { + (1) Subject to funds available:
(a) Persons who are categorically needy as described in ORS
414.025 (2)(n) and (o), and persons under 19 years of age and
pregnant women who are eligible to receive health services under
section 3 of this 2003 Act, are eligible to receive all the
health services approved and funded by the Legislative Assembly.
(b) Persons described in section 11 of this 2003 Act are
eligible to receive the health services described in ORS 414.705
(1)(c), (f) and (g).
(c) Persons 19 years of age and older who are eligible to
receive health services under section 3 of this 2003 Act are
eligible to receive the health services described in ORS 414.705
(1)(b) to (m).
(2) Persons who are categorically needy as described in ORS
414.025 (2)(n) and (o), and persons under 19 years of age and
pregnant women who are eligible to receive health services under
section 3 of this 2003 Act, must be provided, at a minimum, the
health services described in ORS 414.705 (1)(a) to (g).
(3) Persons 19 years of age and older who are eligible to
receive health services under section 3 of this 2003 Act must be
provided, at a minimum, health services described in ORS 414.705
(1)(b) to (h).
(4) Persons described in section 11 of this 2003 Act must be
provided, at a minimum, the health services described in ORS
414.705 (1)(c).
(5) The Department of Human Services shall:
(a) Develop at least three benefit packages of provider
services to be offered under ORS 414.705 (1)(j); and
(b) Define by rule the services to be offered under ORS 414.705
(1)(k).
(6) Notwithstanding ORS 414.735, the Legislative Assembly shall
adjust health services funded under ORS 414.705 (1) by increasing
or reducing benefit packages or health services and, subject to
section 4a of this 2003 Act, by increasing or reducing the
population of eligible persons. + }
SECTION 4a. { + (1) Except as provided in subsection (2) of
this section, if insufficient resources are available during a
biennium, the population of eligible persons receiving health
services may not be reduced below the population of eligible
persons approved and funded in the legislatively adopted budget
for the Department of Human Services for the biennium.
(2) The Department of Human Services may periodically limit
enrollment of persons described in section 11 of this 2003 Act in
order to stay within the legislatively adopted budget for the
department. + }
SECTION 4b. If House Bill 2152 does not become law, section 4a
of this 2003 Act is amended to read:
Enrolled House Bill 2511 (HB 2511-C) Page 2
{ + Sec. 4a. + } (1) { - Except as provided in subsection
(2) of this section, - } If insufficient resources are available
during a biennium, the population of eligible persons receiving
health services may { - not - } be reduced below the
population of eligible persons approved and funded in the
legislatively adopted budget for the Department of Human Services
for the biennium.
(2) The Department of Human Services may periodically limit
enrollment of persons described in section 11 of this 2003 Act in
order to stay within the legislatively adopted budget for the
department.
SECTION 5. { + ORS 414.821, 414.823, 414.827, 414.829,
414.833, 414.834, 414.835 and 414.837 are repealed. + }
SECTION 6. { + (1) Except as provided in section 7 of this
2003 Act, sections 3, 4 and 11 of this 2003 Act and the
amendments to ORS 414.705 by section 1 of this 2003 Act become
operative the day after the date the Department of Human Services
is notified by the Centers for Medicare and Medicaid Services
that the request by the department to amend the necessary waivers
has been approved.
(2) The Director of Human Services shall notify the Legislative
Counsel upon receipt of the approval or disapproval of the
request to amend the necessary waivers. + }
SECTION 7. { + The Director of Human Services may take any
action before the operative date of sections 3, 4 and 11 of this
2003 Act and the amendments to ORS 414.705 by section 1 of this
2003 Act that is necessary to enable the director to exercise, on
and after the operative date of sections 3, 4 and 11 of this 2003
Act and the amendments to ORS 414.705 by section 1 this 2003 Act,
all the duties, functions and powers conferred on the director by
sections 3, 4 and 11 of this 2003 Act and the amendments to ORS
414.705 by section 1 of this 2003 Act. + }
SECTION 8. { + For the biennium beginning July 1, 2003, the
health services provided to persons currently receiving services
under ORS 414.705 to 414.750 shall be the services provided on
June 30, 2003, until sections 3, 4 and 11 of this 2003 Act and
the amendments to ORS 414.705 by section 1 of this 2003 Act
become operative. + }
SECTION 9. ORS 414.839, as amended by section 7, chapter ___,
Oregon Laws 2003 (Enrolled House Bill 2189), is amended to read:
414.839. (1) Subject to funds available, the Department of
Human Services may provide public subsidies for the purchase of
health insurance coverage provided by public programs or private
insurance, including but not limited to the Family Health
Insurance Assistance Program, for currently uninsured individuals
based on incomes up to 200 percent of the federal poverty level.
The objective is to create a transition from dependence on public
programs to privately financed health insurance.
(2) Public subsidies shall apply only to health benefit plans
that meet or exceed the basic benchmark health benefit plan or
plans established under section 11 { + , chapter ___, Oregon Laws
2003 (Enrolled House Bill 2189) + } { - of this 2003 Act - } .
(3) Cost-sharing shall be permitted and structured in such a
manner to encourage appropriate use of preventive care and
avoidance of unnecessary services.
(4) Cost-sharing shall be based on an individual's ability to
pay and may not exceed the cost of purchasing a plan
{ - approved as provided under subsection (2) of this
section - } .
Enrolled House Bill 2511 (HB 2511-C) Page 3
(5) The state may pay a portion of the cost of the subsidy,
based on the individual's income and other resources.
SECTION 10. ORS 414.720 is amended to read:
414.720. (1) The Health Services Commission shall conduct
public hearings prior to making the report described in
subsection (3) of this section. The commission shall solicit
testimony and information from advocates { - for - }
{ + representing + } seniors { - ; - } { + , + }
{ - handicapped - } persons { - ; - } { + with
disabilities, + } mental health services consumers { - ; - }
{ + and + } low-income Oregonians { - ; - } and providers of
health care, including but not limited to physicians licensed to
practice medicine, dentists, oral surgeons, chiropractors,
naturopaths, hospitals, clinics, pharmacists, nurses and allied
health professionals.
(2) The commission shall actively solicit public involvement in
a community meeting process to build a consensus on the values to
be used to guide health resource allocation decisions.
(3) The commission shall report to the Governor a list of
health services { - , including health care services of the
aged, blind and disabled pursuant to section 14, chapter 753,
Oregon Laws 1991, including one list into which those mental
health and chemical dependency services recommended pursuant to
ORS 414.730 are integrated, - } ranked by priority, from the
most important to the least important, representing the
comparative benefits of each service to the entire population to
be served. { - The report shall be accompanied by a report of
an independent actuary retained for the commission to determine
rates necessary to cover the costs of the services. Until federal
waiver approval is obtained and funding authorized for the
integrated list including mental health and chemical dependency
services, the coverage for mental health and chemical dependency
services shall not be considered to be mandated. - } The list
submitted by the commission pursuant to this subsection is not
subject to alteration by any other state agency. The
recommendation may include practice guidelines reviewed and
adopted by the commission pursuant to subsection (4) of this
section.
(4) In order to encourage effective and efficient medical
evaluation and treatment, the commission may include clinical
practice guidelines in its prioritized list of services. The
commission shall actively solicit testimony and information from
the medical community and the public to build a consensus on
clinical practice guidelines developed by the commission.
(5) The commission shall make its report by July 1 of the year
preceding each regular session of the Legislative Assembly and
shall submit a copy of its report to the Governor, the Speaker of
the House of Representatives and the President of the Senate.
(6) The commission may alter the list during interim only under
the following conditions:
(a) Technical changes due to errors and omissions; and
(b) Changes due to advancements in medical technology or new
data regarding health outcomes.
(7) If a service is deleted or added and no new funding is
required, the commission shall report to the Speaker of the House
of Representatives and the President of the Senate. However, if a
service to be added requires increased funding to avoid
discontinuing another service, the commission must report to the
Emergency Board to request the funding.
Enrolled House Bill 2511 (HB 2511-C) Page 4
(8) The report listing services to be provided pursuant to ORS
414.036, 414.042, 414.065, 414.107, 414.705 to 414.725 and
414.735 to 414.750 shall remain in effect from October 1 of the
odd-numbered year through September 30 of the next odd-numbered
year.
SECTION 11. { + (1) A person is eligible to receive the health
services described in section 4 (1)(b) of this 2003 Act when the
person is a resident of this state who:
(a) Is 65 years of age or older, is a blind person as defined
in ORS 412.005 or is a person who is disabled as defined in ORS
412.510;
(b) Has a gross annual income that does not exceed the standard
established by the Department of Human Services; and
(c) Is not covered under any public or private prescription
drug benefit program.
(2) A person receiving prescription drug services under section
4 (1)(b) of this 2003 Act shall pay up to a percentage of the
Medicaid price of the prescription drug established by the
department by rule and the dispensing fee. + }
SECTION 12. If House Bill 2160 becomes law, section 3, chapter
___, Oregon Laws 2003 (Enrolled House Bill 2160), is amended to
read:
{ + Sec. 3. + } (1) The Family Health Insurance Assistance
Program shall provide coverage of age-appropriate immunizations
or other health care services when an eligible individual is
enrolled in a health benefit plan that does not provide coverage
of age-appropriate immunizations or other health care services
required by the { - waiver program described in ORS 414.829 - }
{ + state medical assistance program + } and the eligible
individual is receiving a subsidy described in ORS 414.839.
(2) The Insurance Pool Governing Board shall adopt rules
implementing subsection (1) of this section.
SECTION 13. ORS 414.725 is amended to read:
414.725. { - Upon meeting the requirements of section 9,
chapter 836, Oregon Laws 1989: - }
(1) Pursuant to rules adopted by the Department of Human
Services, the department shall execute prepaid managed care
health services contracts for { - the - } health services
{ - funded pursuant to section 9, chapter 836, Oregon Laws
1989 - } { + funded by the Legislative Assembly + }. The
contract must require that all services are provided to the
extent and scope of the Health Services Commission's report for
each service provided under the contract. Such contracts are not
subject to ORS 279.011 to 279.063. It is the intent of ORS
414.705 to 414.750 that the state move toward utilizing full
service managed care health service providers for providing
health services under ORS 414.705 to 414.750. The department
shall solicit qualified providers or plans to be reimbursed
{ - at rates which cover the costs of providing - } { + for
providing + } the covered services. Such contracts may be with
hospitals and medical organizations, health maintenance
organizations, managed health care plans and any other qualified
public or private entities. The department { - shall - }
{ + may + } not discriminate against any contractors which offer
services within their providers' lawful scopes of practice.
(2) In the event that there is an insufficient number of
qualified entities to provide for prepaid managed health services
contracts in certain areas of the state, the department may
institute a fee-for-service case management system where possible
or may continue a fee-for-service payment system for those areas
Enrolled House Bill 2511 (HB 2511-C) Page 5
that pay for the same services provided under the health services
contracts for persons eligible for health services under ORS
414.705 to 414.750. In addition, the department may make other
special arrangements as necessary to increase the interest of
providers in participation in the state's managed care system,
including but not limited to the provision of stop-loss insurance
for providers wishing to limit the amount of risk they wish to
underwrite.
(3) As provided in subsections (1) and (2) of this section, the
aggregate expenditures by the department for health services
provided pursuant to ORS 414.705 to 414.750 { - shall - }
{ + may + } not exceed the total dollars appropriated for health
services under ORS 414.705 to 414.750.
(4) Actions taken by providers, potential providers,
contractors and bidders in specific accordance with ORS 414.705
to 414.750 in forming consortiums or in otherwise entering into
contracts to provide health care services shall be performed
pursuant to state supervision and shall be considered to be
conducted at the direction of this state, shall be considered to
be lawful trade practices and { - shall - } { + may + } not
be considered to be the transaction of insurance for purposes of
the Insurance Code.
(5) Health care providers contracting to provide services under
ORS 414.705 to 414.750 shall advise a patient of any service,
treatment or test that is medically necessary but not covered
under the contract if an ordinarily careful practitioner in the
same or similar community would do so under the same or similar
circumstances.
SECTION 14. { + The amendments to ORS 414.725 by section 13 of
this 2003 Act apply to prepaid managed care health services
contracts entered into on or after the effective date of this
2003 Act. + }
SECTION 15. { + Section 16 of this 2003 Act is added to and
made a part of ORS 414.705 to 414.750. + }
SECTION 16. { + (1) As used in this section, 'fully capitated
health plan' means an organization that contracts with the
Department of Human Services on a prepaid capitated basis under
ORS 414.725 to provide an adequate network of providers to ensure
that all health services described in ORS 414.705 are reasonably
accessible to enrollees.
(2) 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 pay for hospital
services as follows:
(a) For inpatient hospital services, based on the capitation
rates developed for the budget period, at the level of the
statewide average unit cost, multiplied by the geographic factor,
the payment discount factor and an adjustment factor of 0.925.
(b) For outpatient hospital services, based on the capitation
rates developed for the budget period, at the level of charges
multiplied by the statewide average cost-to-charge ratio, the
geographic factor, the payment discount factor and an adjustment
factor of 0.925.
(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 payment for
hospital services as follows:
(a) For inpatient hospital services, based on the capitation
rates developed for the budget period, at the level of the
Enrolled House Bill 2511 (HB 2511-C) Page 6
statewide average unit cost, multiplied by the geographic factor,
the payment discount factor and an adjustment factor of 0.925.
(b) For outpatient hospital services, based on the capitation
rates developed for the budget period, at the level of charges
multiplied by the statewide average cost-to-charge ratio, the
geographic factor, the payment discount factor and an adjustment
factor of 0.925.
(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 316.143.
(5) The Department of Human Services shall adopt rules to
implement and administer this section. + }
SECTION 17. { + This 2003 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2003 Act takes effect on
its passage. + }
----------
Passed by House August 23, 2003
Repassed by House August 27, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate August 26, 2003
...........................................................
President of Senate
Enrolled House Bill 2511 (HB 2511-C) Page 7
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 2511 (HB 2511-C) Page 8