74th OREGON LEGISLATIVE ASSEMBLY--2007 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 2683
 
                           B-Engrossed
 
                         House Bill 3501
                  Ordered by the Senate June 11
  Including House Amendments dated May 10 and Senate Amendments
                          dated June 11
 
Sponsored by Representative KOTEK; Senator BATES
 
 
                             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.
 
  Requires fully capitated health plan to pay noncontracting
hospital at 80 percent of Medicare rate.
  Sunsets requirement January 2, 2010.
 
                        A BILL FOR AN ACT
Relating to rates for payments to noncontracting hospitals;
  creating new provisions; and amending ORS 414.743.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 414.743 is amended to read:
  414.743. (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 - }   { + at + }  { +  80 percent of the Medicare rate for
the noncontracting hospital + }.
    { - (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 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 - }  { +  as payment in full the rates
described in subsection (2) of this section + }.
  (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.
  (5) The Department of Human Services shall adopt rules to
implement and administer this section.
  SECTION 2. ORS 414.743, as amended by section 1 of this 2007
Act, is amended to read:
  414.743. (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   { - at 80 percent of the Medicare rate for the
noncontracting hospital - }  { +  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   { - as
payment in full the rates described in subsection (2) of this
section - }   { + as payment in full for hospital services,
rates:
  (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 + }.
  (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.
  (5) The Department of Human Services shall adopt rules to
implement and administer this section.
  SECTION 3.  { + The amendments to ORS 414.743 by section 2 of
this 2007 Act become operative on January 2, 2010. + }
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