Reform and Policy - Affordability Standards
Leading the way in Rhode Island healthcare reform and serving as a model for other states, the Office of the Health Insurance Commissioner has established a comprehensive set of Affordability Standards to lower costs and improve quality. These standards encourage insurance companies and hospitals to reduce costs by creating more efficient systems, not by lowering the quality of care or reducing coverage.
The first major goal of the Affordability Standards is to improve primary care within the state by requiring insurers to invest more in primary care providers and services and encouraging primary care practices to transform into Patient Centered Medical Homes (PCMHs). A focus on primary care reduces overall costs by helping patients identify potential problems before they become serious. Further, the PCMH system, especially among people with chronic conditions, reduces overall healthcare costs in Rhode Island as it improves quality of care for the chronically ill.
The second major goal of the Affordability Standards is to reduce costs through the adoption of payment reform strategies. The four key areas of focus in payment reform include: promoting population-based contracting, adoption of alternative payment methodologies, improved hospital contracting practices, and controlling cost increases associated with population-based contracts entered into by Integrated Systems of Care.
Since the Affordability Standards went into effect in 2010, they have had tangible results. Primary care spending has increased by over a third since 2008 and the rate of hospital cost increases has slowed. Together these changes ensure that Rhode Islanders will have more affordable care in the long term.
Care Transformation Advisory Committee
This Committee is charged with developing an annual primary care transformation plan designed to achieve the new Affordability Standards requirement stating that, no later than December 31, 2019, 80 percent of the primary care practices contracting with the Health Insurer are to be functioning as Patient-Centered Medical Homes (PCMHs).
The Care Transformation Advisory Committee firmly believes that a strong primary care infrastructure is a vital element of a health care delivery system that supports affordable health care coverage, and that to revolutionize how primary care is delivered in Rhode Island, statewide PCMH transformation is crucial.
To drive this change, the Care Transformation Advisory Committee explores the possible care transformation challenges faced by provider, insurer and consumer stakeholders and devises possible responses to these issues.
Alternative Payment Methodology Committee
This Committee is charged with developing an annual Alternative Payment Methodology (APM) plan for increasing the use of alternative payment methodologies. The plan, which includes types of payments that qualify as APM payments, annual targets, target dates, and steps payers will take to achieve these targets, are submitted for the Commissioner’s approval each year.
The Alternative Payment Methods Committee acknowledges that the current fee-for-service (FFS) payment model has volume incentives that can lead to care that is overused, misused and fragmented, and thus recognizes the importance of moving to payment models that have value-based incentives that reward improved quality, efficiency and patient-centric care delivery.
To develop these new payment models, the committee explores current APM use in Rhode Island and concerns regarding APM use, and formulates viable courses to facilitate use of APMs by Rhode Island insurers and providers.
Affordability Standards Documents
Below you will find a collection of documents produced by OHIC and its partners related to the creation, implementation, and progress of the affordability standards initiative.
Care Transformation and Alternative Payment Methodology Plans:
OHIC Adopts Amendments to Regulation 2:
OHIC Proposed Amendments to Regulation 2 (November 5, 2014):
Older Related Documents: