The Manatt State Cost Containment Update – February 2022: State Benchmarking Updates: The State of Play | Manatt, Phelps & Phillips, LLP

State of Play: Cost Growth Benchmarking Programs (as of February 1, 2022)

Detailed status updates as of February 1, 2022

State Update Detail
California Legislative California’s proposed 2022-23 state budget proposes to allocate $30 million for a new Office of Health Care Affordability. The legislator is expected to reintroduce benchmarking legislation (AB 1130) this year.
CT Benchmarking program In November 2021, Connecticut appointed Sumit Sajnani as Chief Health Information Technology Officer in the Office of Health Strategy (OHS). OHS presented data on pre-benchmark cost growth trends for 2018-2019 at its January 24 meetingand Encounter. All OHS Health Benchmark Initiative (HBI) meeting documents are available here.
OF Legislative In October 2021, Delaware Governor John Carney signed into law Senate Bill 120, requiring insurers to devote a set percentage of their total health care expenditures to primary care and preventive health services, such as annual health checkups and chronic care management. In 2022, carriers will be required to spend at least 7% of their total medical care cost on primary care, followed by 8.5% in 2023; 10% in 2024; and 11.5% in 2025.
IN Other activity In January 2022, Indiana state leaders distributed letters to state health care industry leaders giving them until April 1 to propose and implement specific actions to bring back Indiana hospital prices to “at least the national average” by 2025. If the industry is unable to provide a viable plan to do so by April 1, the legislature promises to pursue legislation to statutorily reduce prices by methods to be determined.
MY Benchmarking program At the Massachusetts HPC board meeting in January 2022, the HPC board announced that it had voted to require a Performance Improvement Plan (PIP) from Mass General Brigham (MGB), finding that the systems’ spending performance “raises significant concerns” and has likely already impacted the state’s ability to meet the health care cost growth benchmark. Within 45 days of receipt of the PIP notice, MGB shall file either: a PIP proposal; a waiver request; or, a request for an extension. MGH will be subject to ongoing monitoring by the CHP during the 18-month implementation process and, if necessary, a fine of up to $500,000 may be imposed as a last resort.
ME Other activity In July 2021, Maine created a new Office of Affordable Health Care with the adoption of LD 120. The duties of the new Office include:
  • Analyze health care cost growth trends and their correlation with health care quality;
  • Monitor the adoption of alternative payment methods in this state and other states that promote innovative models of health care delivery and payment to reduce the growth of health care costs and improve the quality of health care;
  • Develop proposals for consideration by the Legislative Oversight Committee on potential methods to improve the consumer experience with the healthcare system, including the provision of a consumer advocacy function on non-healthcare issues handled by the Medicare Consumer Assistance Program.

Maine is looking for an executive director for the new office.

New Jersey Legislative In December 2021, Governor Phil Murphy signed an executive order officially launching the New Jersey Healthcare Cost Growth Benchmark Program. The launch of the program is bolstered by a stakeholder pact organized by the Murphy administration made up of advocacy groups, hospitals and health care providers, insurers, a union, employers and government. other New Jersey stakeholders. The pact reflects a common goal for stakeholders and the state to strive to limit the growth of health care costs over time.

State benchmarks are constructed from a 75%/25% blend of projected median income and potential gross state product (PGSP). The benchmark will be implemented for 2023-2027, starting at 3.5% and gradually decreasing to 2.8% in 2027, after a first “transition” year for reporting in 2022, during which providers and payers would start reporting data to the state without accountability. measures in place. More information on the state benchmarking program is available here.

NV Legislative In December 2021, Governor Sisolak issued an executive order establishing a baseline for health care cost growth from 2022. Cost growth targets are generated from a mix of median salary and gross product of the State each year, which gives the following objectives:
  • 3.19% for 2022
  • 2.98% for 2023
  • 2.78% for 2024
  • 2.58% for 2025
  • 2.37% for 2026

The Patient Protection Commission will work with the Division of Insurance, the State Based Health Exchange and the Department of Health and Human Services to track progress to ensure payers and providers meet these goals.

WHERE Benchmarking program The Oregon Health Authority (OHA) is transferring governance of the Cost Growth Target program to the Advisory Committee beginning in 2022, which will oversee the ongoing program implementation processes established by the previous Implementation Committee. The advisory committee will include industry representatives; non-industry representatives; ex-officio members; and experts in health care financing, administration, economics and equity.

In early 2022, the OHA intends to release state-level and market-level trend data from CY 2018 and 2019 using benchmarking data submitted by payers, once validated data completed. This will be the first public report released by the OHA using data collected by the state’s Cost Growth Target program.

More information on the State’s Cost Growth Goals program activities and work program schedule can be found here.

IR Benchmarking program In November 2021, Rhode Island became the sixth state to join the Peterson-Milbank Program for Sustainable Health Care Costs. In an interview with Milbank Memorial Fund, Rhode Island Insurance Commissioner Patrick Tigue discusses Rhode Island’s progress in cost containment and next steps for the program.
Utah Other activity In November 2021, Utah Governor Cox announced the formation of the Utah Sustainable Health Collaborative, which will focus on reducing health care costs and improving health outcomes for Utah residents. ‘Utah. In a December 2021 interview, Rich Saunders, Chief Innovation Officer and Senior Advisor to Governor Spencer Cox, discusses the Utah Sustainable Health Collaborative’s purpose, partners, and future plans.
Vermont Other activity The Vermont Joint Task Force on Affordable and Accessible Health Care examines a number of policy considerations to improve health care affordability for consumers, including a cost growth benchmark as an option for future legislative action
Washington Benchmarking program As of mid-November 2021, the Washington Health Care Cost Transparency Board was actively discussing:
  • Risk adjustment to determine baseline performance at the carrier and provider level (experiments from Massachusetts and Rhode Island on the rise with rising risk scores)
  • Allocation of patients to clinicians and organization of clinicians into major provider entities

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