Virginia

SUMMARY

Virginia operates an All-Payer Claims Database and provides other datasets online relating to cost and quality, including the average charge data for 25 of the most frequently reported health care services. All medical facilities and health maintenance organizations are required to submit utilization data to the Commissioner to populate the database. For the 2015-2016 term, Virginia has passed legislation to increase transparency. Virginia also introduced legislation to reduce cost and increase access this past term, some of which, has been carried into the next legislative session in 2017.

 

LEGISLATION/REGULATION

Legislative Calendar

Virginia’s regular legislative session has ended for 2017.  Legislation from the 2017 session will carry over through 2018.

 

Recent Legislative Developments

Healthcare Transparency

 2017-2018 H1567 Medicaid applications; information about advance directives. Requires all entities approved by the Board of Medical Assistance Services to receive applications and to determine eligibility for medical assistance to provide each applicant for medical assistance with information about advance directives pursuant to Article 8 (§§54.1-2981 et seq.) of Chapter 29 of Title 54.1, including information about the purpose and benefits of advance directives and how the applicant may make an advance directive. Passed – Approved by Governor Chapter 106 (effective 7/1/2017).
HB 1544 Provides that in cases in which a certificate holder holds more than one certificate of public need with conditions, and the certificate holder is unable to satisfy the conditions of one certificate, the Department of Health may provide for satisfaction of the conditions on that certificate by the provision of care at a reduced rate to indigent individuals in excess of the amount required by another certificate issued to the same holder, in an amount approved by the Department as part of an alternative plan of compliance. Passed – Approved by Governor, Chapter 768 (effective 7/1/2017)- 3/27/2017
HB 2101 Defines “charity care” and “bad debt” as used in the context of certificate of public need, establishes a uniform framework for determining the value of charity care provided, and requires health care providers to report data on (i) the total amount of charity care, as defined in § 32.1-102.1, that the facility provides to indigent persons; (ii) the number of patients to whom charity care is provided; (iii) the specific services delivered to patients that are reported as charity care; and (iv) the portion of the total amount of charity care provided that each service represents. The bill also requires health care providers to report data and information identifying any parent company of the health care provider and any subsidiary company of the health care provider and requires every hospital that receives a disproportionate share hospital adjustment to report the number of inpatient days attributable to patients eligible for both Medicare Part A and Supplemental Security Income, the number of inpatient days attributed to patients eligible for Medicaid but not Medicare Part A, and the total amount of the disproportionate share hospital adjustment received. Passed – Enacted, Chapter 791 on 4/5/2017.
2015-2016  HB 312 Directs the Secretary of Health and Human Resources to work with stakeholders, which shall include representatives of hospitals and other health care providers in the Commonwealth, to (i) evaluate interoperability of electronic health records systems among health systems and health care providers and the ability of health systems and health care providers to share patient records in electronic format and (ii) develop recommendations for improving the ability of health systems and health care providers to share electronic health records with the goal of ensuring that all health care providers in the Commonwealth are able to share electronic health information to reduce the cost of health care and improve the efficiency of health care services. Passed – signed into Chapter 80 3/1/2016.
SB 562 Authorizes health carriers to sell, issue, or offer for sale any health benefit plan that would otherwise not be permitted to be sold, issued, or offered for sale due to conflict with the requirements of the federal Patient Protection and Affordable Care Act (PPACA), to the extent that the requirements of the PPACA are amended by any federal law. Passed – signed into Chapter 271 3/7/2016.
HB 1113 Requires every manufacturer of a prescription drug that is made available in the Commonwealth and has a wholesale acquisition price of $10,000 or more for a single course of treatment to report to the Commissioner no later than July 1 of each year information related to the cost of developing, manufacturing, and marketing the prescription drug; any changes in the average wholesale price and average wholesale acquisition cost of the prescription drug; the amount of profits derived from sale of the prescription drug; and the total amount of financial assistance provided to consumers of the prescription drug. The bill requires the State Health Commissioner to cause such reports to be published on a website maintained by a nonprofit entity with which the Commissioner has entered into a contract for such purpose and to annually report on such information, in aggregate form, to the Chairmen of the House Committees on Appropriations and on Health, Welfare and Institutions and the Senate Committees on Finance and on Education and Health. Inactive – Died.
SB 394 Directs the Secretary of Health and Human Resources to develop a plan to increase transparency in the administration and delivery of health care by agencies of the Commonwealth or health care providers who have entered into an agreement or contract with an agency of the Commonwealth. Inactive – Died.
SB 487 Requires every manufacturer of a prescription drug that is made available in the Commonwealth and has a wholesale acquisition price of $10,000 or more for a single course of treatment to report to the Commissioner no later than July 1 of each year information related to the cost of developing, manufacturing, and marketing the prescription drug; any changes in the average wholesale price and average wholesale acquisition cost of the prescription drug; the amount of profits derived from sale of the prescription drug; and the total amount of financial assistance provided to consumers of the prescription drug. The bill requires the State Health Commissioner to cause such reports to be published on a website maintained by a nonprofit entity with which the Commissioner has entered into a contract for such purpose and to annually report on such information, in aggregate form, to the Chairmen of the House Committees on Appropriations and on Health, Welfare and Institutions and the Senate Committees on Finance and on Education and Health. Inactive – Died.

 

Healthcare Cost

2017-2018 HB 1450 Pharmacy freedom of choice. Requires a health insurer or health maintenance organization, or its intermediary (the carrier), when it receives notice from a pharmacy’s intermediary of the pharmacy’s agreement to accept reimbursement for its services at rates applicable to pharmacies that are preferred providers as payment in full, to respond to the notice in the same manner as it is currently required to respond to a notice received from the pharmacy. The measure does not require a carrier to contract with a pharmacy’s intermediary and does not prohibit a carrier from contracting with a pharmacy’s intermediary. Amends and Re-enacts §§38.2.3407 and 38.2-4312.1 of the Virginia Code. Passed – Approved by Governor- Chapter 615 (effective 7/1/17) on  3/16/2017.
 HB 1544 Provides that in cases in which a certificate holder holds more than one certificate of public need with conditions, and the certificate holder is unable to satisfy the conditions of one certificate, the Department of Health may provide for satisfaction of the conditions on that certificate by the provision of care at a reduced rate to indigent individuals in excess of the amount required by another certificate issued to the same holder, in an amount approved by the Department as part of an alternative plan of compliance. Passed – Approved by Governor, Chapter 768 (effective 7/1/2017) on  3/27/2017.

 

Healthcare Markets

2017-2018 HB 2103 Health benefit exchange. Repeals provisions that direct the State Corporation Commission and Virginia Department of Health to perform plan management functions, including rate review, as required for participation in the federal health benefit exchange established pursuant to the federal Patient Protection and Affordable Care Act (the Act). Other provisions that refer to the federal health benefit exchange are also eliminated. The measure shall become effective 60 days after the date that the provisions of the Act that provide for the establishment of a federally operated health benefit exchange are repealed or otherwise become unenforceable. Inactive – Died.  
SB 1562 Medicaid Supplemental Rate Fund. Creates the Medicaid Supplemental Rate Fund (the Fund) as a sub-fund of the Virginia Health Care Fund. Moneys in the Fund will be used to raise base Medicaid reimbursement rates for hospitals and health care providers in the Commonwealth. The bill will require nonprofit hospitals with over $300 million in annual revenues to pay state and local sales and use taxes, and such sales tax revenues will be deposited into the Fund. Nonprofit hospitals are currently exempt from paying state and local sales and use tax. Inactive – Died.
2015-2016 HB 193 Creates a two-phase process to sunset certificate of public need requirements for many categories of medical care facilities and projects, with the requirement for a certificate of public need (i) for ambulatory and outpatient surgery centers other than rural ambulatory and outpatient surgery centers and for capital expenditures at medical care facilities other than rural medical care facilities repealed in effective July 1, 2016, and (ii) for all medical care facilities other than nursing homes, rehabilitation hospitals and beds, organ or tissue transplant services, certain open heart surgery services, and rural medical care facilities repealed effective January 1, 2017. Inactive– Died.

 

Key Statutes

We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.

 

Transparency in Healthcare

 

  • Code Ann. 32.1-102.4 Provides that in cases in which a certificate holder holds more than one certificate of public need with conditions, and the certificate holder is unable to satisfy the conditions of one certificate, the Department of Health may provide for satisfaction of the conditions on that certificate by the provision of care at a reduced rate to indigent individuals in excess of the amount required by another certificate issued to the same holder, in an amount approved by the Department as part of an alternative plan of compliance.

 

  • Code Ann. 32.1-201.1-201.2 Defines “charity care” and “bad debt” as used in the context of certificate of public need, establishes a uniform framework for determining the value of charity care provided, and requires health care providers to report data on (i) the total amount of charity care, as defined in § 32.1-102.1, that the facility provides to indigent persons; (ii) the number of patients to whom charity care is provided; (iii) the specific services delivered to patients that are reported as charity care; and (iv) the portion of the total amount of charity care provided that each service represents.

 

  • Code Ann. 32.1-276.5 Requires every health care provider shall submit data as required pursuant to regulations of the Board, consistent with the recommendations of the nonprofit organization in its strategic plans submitted and approved pursuant to § 32.1-276.4, and as required by this section. Such data shall include relevant data and information for any parent or subsidiary company of the health care provider that operates in the Commonwealth. Notwithstanding the provisions of Chapter 38 (§ 2.2-3800 et seq.) of Title 2.2, it shall be lawful to provide information in compliance with the provisions of this chapter.

 

  • Code Ann. §32.1-325 A provision identifying entities approved by the Board to receive applications and to determine eligibility for medical assistance, which shall include a requirement that such entities (i) obtain accurate contact information, including the best available address and telephone number, from each applicant for medical assistance, to the extent required by federal law and regulations, and (ii) provide each applicant for medical assistance with information about advance directives pursuant to Article 8 (§ 54.1-2981 et seq.) of Chapter 29 of Title 54.1, including information about the purpose and benefits of advance directives and how the applicant may make an advance directive.

 

  • Code Ann. §62.501  Requires local departments or the Commissioner to provide each applicant for public assistance, such as Medicaid, with information regarding his rights and responsibilities related to eligibility for and continued receipt of public assistance. Such information shall be provided in an electronic or written format approved by the Board that is easily understandable and shall also be provided orally to the applicant by an employee of the local department, except in the case of energy assistance. The local department shall require each applicant to acknowledge, in a format approved by the Board, that the information required by this subsection has been provided and shall maintain such acknowledgment together with information regarding the application for public assistance.

 

  • Code Ann §38.2-3254.1 Notwithstanding any other provision of state law, a health carrier may sell, issue, or offer for sale or renew any health benefit plan that would otherwise (i) not be permitted to be sold, issued, or offered for sale or (ii) be required to be canceled, discontinued, or terminated, because the health benefit plan does not meet the requirements of Title I of the federal Patient Protection and Affordable Care Act (H.R. 3590), as amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) (the PPACA) or regulations promulgated thereunder, to the extent and under the terms that (a) the appropriate federal authority has suspended enforcement of provisions of Title I of the PPACA or regulations promulgated thereunder or (b) the requirements of the PPACA are amended by any federal law. This section applies to health benefit plans sold or offered for sale in the individual and group markets.

 

  • Code Ann. § 32.1-276.2 through 276.11 authorizes and implements Virginia’s all-payer claims database (APCD), a database which aggregates claims data to provide data and analytic services for health planners and also to increase price transparency for consumers. All medical facilities and health maintenance organizations are required to submit utilization data to the Commissioner to populate the database.
    • HMOs are required to submit quality reports based on the Health Employer Data and Information Set (HEDIS) and Consumer Assessment of Health Plans (CAHPS) series of metrics, which forms the basis of an online cost and quality comparison tool for consumers.
    • The law also creates the Virginia Patient Level Data System, a database of all licensed Virginia hospital discharges that has operated every calendar quarter since 1993. The System is intended to enhance the ability of health care purchasers and planners to make effective health care decisions.
    • The Commissioner is further directed to contract with a nonprofit for an annual survey confidential survey of carriers offering private group health insurance to determine the reimbursement paid for a minimum of 25 of the most frequently reported health care services, including the average reimbursement rate paid for the same services under Medicare and Medicaid. The Commissioner has contracted with the non-profit Virginia Health Information to publish the foregoing health care prices available online.

 

  • Code Ann. § 38.2-3404 authorizes the Commission to issue rules respecting the readability of insurance policy forms.

 

  • Code Ann. § 38.2-3407.14 requires that for every policy, contract, or plan year renewal beginning on or after January 1, 2015, the health carrier must give 60 day written notice prior to renewal or a premium or deductible increase.

 

  • Code Ann. § 38.2-5904 creates the Office of the Managed Care Ombudsman within the Bureau of Insurance with the following duties: “assisting consumers in understanding their rights and how to resolve problems; answering inquiries from consumers, health care providers, and other individuals; [and]providing information on MCHIPs, types of MCHIPs, mandated benefits, utilization review procedures and available appeal options;” assisting consumers in filing appeals, including utilization review appeals; and ensuring consumers have access to the Office and receive timely responses.

 

Healthcare Costs

  • Code Ann. §38.2-3407.7 Notwithstanding any provision of § 38.2-3407 to the contrary, no insurer proposing to issue preferred provider policies or contracts shall prohibit any person receiving pharmacy benefits furnished thereunder from selecting, without limitation, the pharmacy of his choice to furnish such benefits. This right of selection extends to and includes any pharmacy that is a nonpreferred provider and that has previously notified the insurer on its own behalf or through an intermediary, by facsimile or otherwise, of its agreement to accept reimbursement for its services at rates applicable to pharmacies that are preferred providers, including any copayment consistently imposed by the insurer, as payment in full. Each insurer shall permit prompt electronic or telephonic transmittal of the reimbursement agreement by the pharmacy and ensure prompt verification to the pharmacy of the terms of reimbursement. In no event shall any person receiving a covered pharmacy benefit from a nonpreferred provider which has submitted a reimbursement agreement be responsible for amounts that may be charged by the nonpreferred provider in excess of the copayment and the insurer’s reimbursement applicable to all of its preferred pharmacy providers. If a pharmacy has provided notice pursuant to this subsection through an intermediary, the insurer or its intermediary may elect to respond directly to the pharmacy instead of the intermediary. Nothing in this subsection shall (i) require an insurer or its intermediary to contract with or to disclose confidential information to a pharmacy’s intermediary or (ii) prohibit an insurer or its intermediary from contracting with or disclosing confidential information to a pharmacy’s intermediary.

 

  • Code Ann. §38.2-4312.1 If a pharmacy has provided notice pursuant to this subsection through an intermediary, the health maintenance organization or its intermediary may elect to respond directly to the pharmacy instead of the intermediary. Nothing in this subsection shall (i) require a health maintenance organization or its intermediary to contract with or to disclose confidential information to a pharmacy’s intermediary or (ii) prohibit a health maintenance organization or its intermediary from contracting with or disclosing confidential information to a pharmacy’s intermediary. B. No such health maintenance organization shall impose upon any person receiving pharmaceutical benefits furnished under any such health care plan: 1. Any copayment, fee or condition that is not equally imposed upon all individuals in the same benefit category, class or copayment level, whether or not such benefits are furnished by pharmacists who are not participating providers; 2. Any monetary penalty that would affect or influence any such person’s choice of pharmacy; or 3. Any reduction in allowable reimbursement for pharmacy services related to utilization of pharmacists who are not participating providers.

 

Network Adequacy

  • Code Ann. § 38.2-3430.4 allows a health insurance issuer to deny coverage under a network plan if it does not have the capacity to deliver services adequately to additional enrollees.

 

Healthcare Markets

  • Code Ann. § 32.1-102.3:2 requires that medical facilities obtain a certificate of public need before developing or expanding medical services. The criteria for determining public need include: “(i) the relationship of the project to the long term health care state plan, (ii) the need for enhanced facilities to serve the population of an area, [and] (iii) the extent to which the project is accessible to all residents in the proposed area and the immediate economic impact and financial feasibility of the project.” A certificate of need program allows the state to contain health care costs but can also curtail competition by frustrating new market-entrants.

 

  • Code Ann. § 38.2-316.1 mandates that accident and sickness insurance premium rates applicable to health benefit plans must be approved prior to issuance.

 

 

  • Code Ann. §§ 38.2-700 through 705 contains antitrust provisions directing when a domestic insurer may hold stock of another insurer or when a director of a domestic insurer may be a director of another insurer. The statute limits activities that would “(i) substantially lessens competition generally or (ii) tends to create a monopoly, in the business of insurance.”

 

  • Code Ann. § 38.2-5805 requires that managed care health insurance carriers contract with providers to hold enrollees harmless for the cost of medical services if the carrier fails to pay, except they may collect cost-sharing amounts.

 

2016-2018 BUDGET

Virginia’s biennial budget is enacted into law in even-numbered years, and amendments to it are enacted in odd-numbered years. Virginia enacted its 2016-2018 Biennial Budget during the regular legislative session in 2016. To view Virginia’s Office of Health and Human Resources 2016-2018 Biennial Budget, click here.

 

LITIGATION/ENFORCMENT

  • On March 21, 2014, The Virginia Attorney General, Mark R. Herring, filed an amicus brief on behalf of the Commonwealth in support of the federal government in the case of King v. Sebelius. Plaintiffs alleged that the premium assistance tax credits are only available to purchasers on state-operated exchange, not federally-operated exchanges. The Fourth Circuit Court of Appeals ultimately affirmed the lower court’s decision in King v. Burrell that purchasers on federally-operated exchanges are eligible for financial assistance.

 

KEY RESOURCES

Virginia General Assembly

Virginia Office of the Attorney General

Virginia Bureau of Insurance