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
Latest Legislative Session: 1/3/2023 - 1/1/2024 (2023-2024 term). *Current session bill updates are ongoing. Check back weekly for updates.
H 5102 – Rhode Island
Introduced: 2017 Status: Inactive / Dead
SURPRISE BILLS FOR MEDICAL SERVICES: would provide for a dispute resolution for emergency services and surprise bills for medical services performed by nonparticipating (out-of-network) healthcare providers.
H 5109 – Rhode Island
Introduced: 2017 Status: Inactive / Dead
RELATING TO INSURANCE: would prohibit insurance companies from varying the premium rates charged for a health coverage based on the gender of the individual policy holder, enrollee, subscriber, or member
H 5284 (see companion bill S 279) – Rhode Island
Introduced: 2023 Status: In Process
Expands the rights of physician assistants with regard to their practice and prohibits non-compete clauses that exceed five years with regard to the purchase and sale of a practice.
H 5495 – Rhode Island
Introduced: 2023 Status: In Process
Relating to state affairs and government — the Rhode Island healthcare reform act of 2004 — health insurance oversight (g) To analyze the impact of changing the rating guidelines and/or merging the individual insurance market, …
H 5743 – Rhode Island
Introduced: 2023 Status: In Process
Repeals the certificate of need process statutes which are used by the department of health to determine the need for new health care equipment and new institutional health services.
27 R.I. Gen. Laws § 27-20-26. Regulations: Nonprofit Medical Service Corporations – Rhode Island
Introduced: Status: Enacted
The director of the department of business regulation may adopt reasonable rules and regulations for the implementation and administration of the provisions of this chapter.
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27 R.I. Gen. Laws § 27-20-35. Third party reimbursement for services of certain health-care workers: Nonprofit Medical Service Corporations – Rhode Island
Introduced: Status: Enacted
A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health-care provider who is acting …
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27 R.I. Gen. Laws § 27-20-38. Restricted annual rate payments prohibited: Nonprofit Medical Service Corporations – Rhode Island
Introduced: Status: Enacted
(a) No corporation organized under this chapter shall compensate any provider of outpatient service by using the restricted annual rate method of payment. (b) The “restricted annual rate method of payment” is defined as any …
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27 R.I. Gen. Laws § 27-20-5. Contracts with subscribers: Nonprofit Medical Service Corporations – Rhode Island
Introduced: Status: Enacted
Each nonprofit medical service corporation may contract with its subscribers for any medical service as may be provided under any nonprofit medical service plan adopted by the corporation.
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27 R.I. Gen. Laws § 27-20-51. Post-payment audits: Nonprofit Medical Service Corporations – Rhode Island
Introduced: Status: Enacted
Any review, audit, or investigation by a nonprofit medical service corporation of a health-care provider’s claims that results in the recoupment or set-off of funds previously paid to the health-care provider in respect to such …
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Federal Trade Commission and State of Rhode Island v. Lifespan and Care New England Health – Rhode Island
District Court: District of Rhode Island Status: Decided
Rhode Island’s two largest nonprofit hospital systems, Lifespan and Care New England, abandoned their merger plans in the face of a joint antitrust challenge from …
Steward Health Care System v. Blue Cross & Blue Shield of Rhode Island – Rhode Island
District Court: District of Rhode Island Status: Pending
On June 4, 2013, Steward Health Care System, LLC, Blackstone Medical Center, Inc., and Blackstone Rehabilitation Hospital, Inc. filed a complaint in federal district court, …
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
- Rhode Island State General Assembly
- Rhode Island Office of the Attorney General
- Rhode Island State Department of Business Regulation
- Rhode Island Office of the Health Insurance Commissioner
- Rhode Island Department of Health