42-14.5-3.2. Health spending accountability and transparency program.

(b) The health insurance commissioner shall administer the health spending accountability

and transparency program and shall convene and chair the following advisory bodies to provide

input into the implementation of the program:

(1) An affordability advisory committee comprised of individuals without direct financial

interests in the healthcare system including, but not limited to, independent health policy experts,

consumers or consumer representatives, employers or employer representatives, and

representatives of organized labor. The affordability advisory committee shall consist of eight (8)

members, as follows:

(i) Two (2) independent health policy expert members shall be appointed by the governor;

(ii) One consumer representative and one employer or organized labor representative shall

be appointed by the president of the senate;

(iii) One consumer representative and one employer or organized labor representative shall

be appointed by the speaker of the house;

(iv) The secretary of health and human services or their designee; and

(v) The health insurance commissioner or their designee;

(2) A stakeholder advisory council that includes, but shall not be limited to, representatives

of hospitals, health insurers, providers, and pharmaceutical manufacturers, in addition to

independent health policy experts, consumers or consumer representatives, employers or employer

representatives, and representatives of organized labor, all of whom shall be appointed by the health

insurance commissioner.

(c) For calendar years 2026 and 2027, the health insurance commissioner shall establish

the annual healthcare cost growth targets pursuant to the 2023 Compact to Reduce the Growth in

Healthcare Costs while Improving Healthcare Access, Equity, Patient Experience, and Quality in

Rhode Island.

(d) Not later than July 1, 2027, and every three (3) years thereafter, the health insurance

commissioner shall establish annual healthcare cost growth targets for the succeeding three (3)

calendar years for payers and large provider entities. In developing the healthcare cost growth

targets, the commissioner shall minimally consider:

(1) Historical and forecasted changes in median household income in the state;

(2) The growth rate of potential gross state product;

(3) The most recent annual report prepared by the health insurance commissioner, pursuant

to subsection (g) of this section;

(4) Recommendations from the affordability advisory committee and stakeholder advisory

council established pursuant to subsections (b)(1) and (b)(2) of this section, including any

information and analyses used to inform such recommendations.

(e) Not later than July 1, 2027, and every five (5) years thereafter, the health insurance

commissioner, in collaboration with the executive office of health and human services, shall

establish annual all-payer primary care investment targets for the succeeding five (5) calendar

years. In developing the all-payer primary care investment targets, the commissioner shall consider

recommendations from the affordability advisory committee and stakeholder advisory council

pursuant to subsections (b)(1) and (b)(2) of this section.

(f) The health insurance commissioner shall establish requirements for payers to report data

and other information necessary to calculate and monitor healthcare cost growth; evaluate

performance against the healthcare cost growth target established under subsections (c) and (d) of

this section; evaluate performance against the all-payer primary care investment target established

under subsection (e) of this section; and measure quality, public health, and health equity

performance, as defined by the health insurance commissioner. Such data shall include but not be

limited to:

(1) Total and per capita healthcare expenditures;

(2) Total and per capita medical expenses;

(3) Net cost of private health insurance;

(4) Primary care expenditures;

(5) Quality performance data from the office of the health insurance commissioner’s

aligned measure set, as designated by the health insurance commissioner, with input from a

workgroup with expertise in quality measure alignment convened by the health insurance

commissioner; and

(6) Performance on a set of public health and accountability measures, as designated by the

health insurance commissioner, with input from the executive office of health and human services,

the department of health, and a workgroup with expertise in public health convened by the health

insurance commissioner.

(g) The health insurance commissioner shall publish an annual report on healthcare

spending and quality in Rhode Island which includes, but is not limited to, the following:

(1) Total and per capita healthcare spending trends at the statewide, insurance market,

individual payer, and large provider entity levels, including performance against the cost growth

target at each of these levels;

(2) Net cost of private health insurance by insurance market and payer;

(3) Primary care spending as a percentage of total medical expenses and annual primary

care spending growth, including progress toward meeting the all-payer primary care investment

target established in subsection (e) of this section;

(4) An analysis of the drivers of healthcare spending growth by service category, as well

as the relative contribution of utilization and price on the rate of growth, using data from the All-

Payer Claims Database;

(5) Performance on select quality measures from the health insurance commissioner

commissioner’s aligned measure set, pursuant to subsection (f)(5) of this section;

(6) Performance on a set of public health and accountability measures pursuant to

subsection (f)(6) of this section;

(7) Status of ongoing performance improvement plans, results of performance

improvement plans completed during the prior performance year, and any penalties imposed due

to non-compliance with developing or implementing a performance improvement plan pursuant to

subsection (i) of this section; and

(8) Recommendations for policy changes that may include, but not be limited to, strategies

to improve affordability for Rhode Island residents, control healthcare spending growth while

maintaining high standards for quality health care, and improve the oversight, performance and

efficiency of Rhode Island’s healthcare system.

(h)(1) The health insurance commissioner shall convene an annual public hearing

following the release of the annual report required pursuant to subsection (g) of this section. Such

public hearing shall involve an examination of:

(i) The report most recently prepared by the health insurance commissioner pursuant to

subsection (g) of this section;

(ii) The expenditures of provider entities and payers including, but not limited to,

healthcare cost trends, primary care spending as a percentage of total medical expenses, and the

factors contributing to such costs and expenditures; and

(iii) Any other matters that the health insurance commissioner deems relevant for the

purposes of this section.

(2) The health insurance commissioner may require any payer or provider entity that, for

the performance year, is found to have exceeded the healthcare cost growth target or has failed to

meet the all-payer primary care investment target, to participate in such hearing. The health

insurance commissioner may further require any payer, provider entity, or other entity including,

but not limited to, a pharmaceutical manufacturer or pharmacy benefit manager, that is found to

have significantly contributed to healthcare spending growth in the state, as determined by the

commissioner, to participate in such hearing. Each payer, provider entity, or other entity that is

required to participate in such hearing shall provide testimony on issues identified by the health

insurance commissioner and provide additional information on actions taken to reduce such payer’s

or entity’s contribution to future statewide healthcare spending or to increase such payer’s or

provider entity’s primary care spending as a percentage of total medical expenses.

(3) The health insurance commissioner shall allow representatives from consumer groups,

employers, organized labor, community organizations, members of the public, and other interested

parties to provide testimony as part of the annual public hearing.

(i)(1) The health insurance commissioner may require any commercial health insurer or

large provider entity that has commercial market spending growth that exceeds the healthcare cost

growth target in any two (2) out of three (3) performance years to develop and implement a

performance improvement plan. For the purposes of requiring a performance improvement plan, a

large provider entity must have at least one hundred twenty thousand (120,000) attributed member

months across commercial health insurers.

(2) A performance improvement plan must:

(i) Identify key spending drivers and include concrete strategies and steps a large provider

entity or commercial health insurer will take to address such spending drivers;

(ii) Identify an appropriate timeline for implementation, including a timeframe by which

the large provider entity or commercial health insurer will be subject to an evaluation by the health

insurance commissioner; and

(iii) Have clear measurements of success. The commissioner may provide guidance,

feedback, and additional recommendations to a commercial health insurer or large provider entity

in developing a performance improvement plan.

(3) The health insurance commissioner shall review and approve, modify, or reject all

performance improvement plans.

(4) The health insurance commissioner shall monitor implementation throughout the

duration of the performance improvement plan to assess compliance with the performance

improvement plan’s terms and shall determine at the conclusion of the performance improvement

plan whether the entity has adequately addressed the targeted spending drivers.

(5) Prior to requiring a commercial health insurer or large provider entity to develop or

implement a performance improvement plan pursuant to this subsection, the health insurance

commissioner shall provide the affected entity with:

(i) Written notice of the determination that the entity is subject to a performance

improvement plan requirement;

(ii) The data, methodology, calculations, and performance measures relied upon by the

commissioner in making such determination; and

(iii) A reasonable opportunity to submit written comments, supporting documentation, and

any other information relevant to the determination for consideration by the commissioner.

(6) The commissioner shall review and consider any information submitted pursuant to

subsection (5)(iii) of this section prior to issuing a final determination requiring a performance

improvement plan.

(7) If the health insurance commissioner determines that the performance improvement

plan does not adequately meet the requirements in subsection (i)(2) of this section, or that an entity

has failed to comply with the terms of the performance improvement plan pursuant to subsection

(i)(4), the commissioner may impose a financial penalty on the commercial health insurer or large

provider entity. The health insurance commissioner shall develop criteria for imposing the financial

penalty based on factors that include, but are not limited to:

(i) The degree to which the large provider entity or commercial health insurer exceeded the

target;

(ii) The size of the large provider entity or commercial health insurer entity;

(iii) The good faith efforts of the large provider entity or commercial health insurer to

address healthcare spending growth; and

(iv) The financial condition of the large provider entity or commercial health insurer,

according to criteria adopted by the health insurance commissioner.

(8) Prior to the imposition of any financial penalty pursuant to subsection (i)(7) of this

section, the affected commercial health insurer or large provider entity shall be afforded an

administrative hearing conducted pursuant to chapter 35 of title 42. Following such hearing, the

commissioner shall issue a written final decision setting forth findings of fact and conclusions of

law. Any final decision imposing a financial penalty shall be subject to judicial review pursuant to

§ 42-35-15.

(9) The total cost of the health insurance commissioner’s review of a performance

improvement plan pursuant to subsection (i)(3) of this section, monitoring implementation of a

performance improvement plan pursuant to subsection (i)(4) of this section, and determination of

compliance with a performance improvement plan pursuant to subsection (i)(4) of this section shall

be borne by the commercial health insurer or large provider entity subject to the performance

improvement plan, according to parameters defined by the health insurance commissioner.

(j) The health insurance commissioner may establish data sharing agreements with the

executive office of health and human services, department of health, and any other identified state

agency to meet the requirements of this section and ensure a comprehensive view of healthcare

spending trends.

(k) The health insurance commissioner shall adopt a schedule of civil penalties determined

by the severity of the violation for:

(1) Any payer that fails to submit required data, submits incomplete data, or otherwise

obstructs data reporting pursuant to subsection (f) of this section; and

(2) Any payer, provider, or other entity that fails to comply with the health insurance

commissioner’s request to provide testimony during the annual public hearing pursuant to

subsection (h) of this section.

SECTION 18. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 157.2

RHODE ISLAND MARKETPLACE AFFORDABILITY PROGRAM ACT OF 2026