RHODE ISLAND

Overview

Rhode Island is an active state in advancing innovative policy initiatives to promote healthcare competition, price transparency, and cost containment. The state has long operated an all-payer claims database and additionally requires hospitals to provide patients with a cost estimate of anticipated services. The state also provides some limited protections against surprise billing by requiring health plans to cap copays and coinsurance for out-of-network emergency care at the in-network price.

Rhode Island’s Office of the Insurance Commissioner reviews provider payment rates in contracts between insurers and providers and rejects any contracts that increase the total cost of services above a threshold. In 2019, Rhode Island became the second state, after Massachusetts, to limit how much health costs can increase each year when the Governor signed an executive order that set a 3.2 percent growth cap on all spending on hospitals and doctors by commercial insurers, government health programs, employers, and consumers. The growth cap is effective through 2022 and will be administered and monitored by the Rhode Island Health Care Costs Trends Steering Committee.

In recent sessions, Rhode Island lawmakers also sought to reduce the size of premium increases through reinsurance by mitigating the impact high-risk individuals have on health insurance premiums; the state also has a federal waiver that allows it to use federal funds to help finance its reinsurance program. Rhode Island additionally allows small business owners to purchase health plans offered by their state exchange, HealthSource RI. Separately, lawmakers are considering the creation of a commission to study the pros and cons of implementing a single-payer system in the state. The state also requires insurers to cover telemedicine.

In healthcare market competition, the state has robust laws that restrict certain anticompetitive contract clauses and also enables comprehensive merger review of healthcare transactions. The state prohibits most-favored nation clauses in provider contracts, most non-compete agreements with physicians, and certain exclusive contracting clauses. Rhode Island statutes also provide significant oversight of the provider market, requiring healthcare-specific notice of all hospital transactions with review and approval from the state Department of Health and Attorney General based on antitrust and affordability criteria.

On top of existing legislative mandates, the state continues to vigorously enforce and expand on its antitrust authorities. Rhode Island is one of the most active states in challenging potentially anticompetitive hospital mergers, imposing conditions to alleviate competition concerns on some transactions and forcing others to abandon their efforts to consolidate. The Source also provided a special analysis of legal and regulatory options to address the impacts of provider consolidation in Rhode Island as commissioned by the state.

See below for an overview of existing Rhode Island state mandates. Click on citation tab for detailed information of specific statutes (click link to download statute text).

State Action


Current Legislative Session: 1/5/2021 - 1/3/2022 (2021-2022 term). *Current session bill updates are ongoing. Check back weekly for updates.

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© 2018-2020 The SLIHCQ DatabaseInitial funding for this project was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.

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© 2018-2020 The SLIHCQ DatabaseInitial funding for this project was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.
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Additional Resources

STATE BUDGET

Rhode Island operates on an annual budget cycle. The governor submits a proposed budget in January and the legislature adopts a budget in June. The fiscal year begins on July 1 and ends on June 30 in the following year.

REGULATION & ENFORCEMENT

  • Rhode Island Attorney General’s review documents of current and past hospital conversions can be found here.
  • Rhode Island officials blocked a private equity fund’s attempted sale of 15 hospitals over concerns that the sale would jeopardize the health of the two hospitals in their state, Roger Williams Medical Center and Our Lady of Fatima Hospital. After months of wrangling over the state approvals for the sale, the equity fund, Leonard Green & Partners, withdrew its approval request and sued. On June 1, 2021, the state’s attorney general announced a deal that would allow the sale to proceed provided a whole host of conditions were met, including financial commitments to the two hospitals. Four other states had already approved the sale of the hospital chain, Prospect Medical Holdings.
  • Rhode Island’s health insurance commissioner is sounding the alarm about a proposed merger between the state’s top two health systems, Lifespan and Care New England, saying the merger could lead to substantial price hikes for inpatient care. The office is recommending enhanced regulatory oversight of the merged entity if the merger is approved—oversight that includes comprehensive price caps, quality incentive requirements, advanced value-based payment adoption, population health and health equity improvement requirements, and sustainable oversight funding.

KEY RESOURCES