                                 CODE OF VIRGINIA

COMPARABLE HEALTH CARE SERVICE INCENTIVE PROGRAM (§ 38.2-3462)

A. Beginning with health benefit plans offered or renewed on or after January 1,
2021, each health carrier offering a health benefit plan in the Commonwealth
shall develop and implement a program that provides incentives for covered
persons in its health benefit plan who elect to receive a comparable health care
service that is covered by the health benefit plan from health care providers
that are paid less than the average in-network allowed amount paid or payable by
that health carrier to network providers for that comparable health care
service. A health carrier may base the average paid to a network provider on
what that health carrier pays to providers in the network applicable to the
covered person&#8217;s specific health benefit plan, or across all of its health
benefit plans offered in the Commonwealth.

B. Incentives may include, but are not limited to, cash payments, gift cards, or
credits or reductions of premiums, copayments, or deductibles. Health carriers
may let covered persons decide which method they prefer to receive the
incentive.

C. The incentive program shall provide covered persons with an incentive for
each service or category of comparable health care service resulting from
comparison shopping by covered persons. A health carrier is not required to
provide a payment or credit to a covered person when the health carrier&#8217;s
saved cost is $25 or less.

D. A health carrier shall determine the allowed amount paid or payable by that
health carrier to network providers for that comparable health care service on
the basis of the average allowed amount for the procedure or service under the
covered person&#8217;s health benefit plan. Such determination shall be made on
the basis of the average of the allowed amounts using data collected over a
reasonable period not to exceed one year. A health carrier may determine an
alternate methodology for calculating the average allowed amount if approved by
the Commission. A health carrier shall, at minimum, inform covered persons of
their eligibility for an incentive payment and the process to request the
average allowed amount for a procedure or service on the health carrier&#8217;s
website and in health benefit plan materials.

E. Eligibility for an incentive payment may require a covered person to
demonstrate, through reasonable documentation such as a quote from the health
care provider, that the covered person shopped prior to receiving care from the
health care provider who charges less for the comparable health care service
than the average allowed amount paid or payable by that health carrier. Health
carriers shall provide additional mechanisms for the covered person to satisfy
this requirement by utilizing the health carrier&#8217;s cost transparency
website or toll-free number, established under this article.

F. Each health carrier shall make the program available as a component of all
small group health benefit plans offered by the health carrier in the
Commonwealth. Annually at enrollment or renewal, each health carrier shall
provide to any covered person who is enrolled in a small group health benefit
plan eligible for the program (i) notice about the availability of the program,
(ii) a description of the incentives available to a covered person, (iii)
instructions on how to earn such incentives, and (iv) notification that tax
treatment of the shared savings amounts or awards will be compliant with the
rules of the Internal Revenue Service and treated as taxable income.

G. A comparable health care service incentive payment made by a health carrier
in accordance with this section shall not constitute an administrative expense
of the health carrier for rate development or rate filing purposes.

H. Prior to offering the program to any covered person, a health carrier shall
file with the Commission a description of the program in the manner determined
by the Commission. The description shall include a demonstration by the health
carrier that the program is cost-effective, including any data relied upon by
the health carrier in making such determination. The Commission may review the
filing made by the health carrier to determine if the health carrier&#8217;s
program complies with the requirements of this article.

I. A health carrier may petition the Commission to be excluded from
participation in the program. The Commission shall exempt from the program a
health plan with a limited provider network that demonstrates that the network
is incompatible with a shared savings program. In making its determination, the
Commission shall consider the impact on premiums related to the administration
of the program.

J. Annually by April 1, each health carrier shall file with the Commission, for
the most recent calendar year, the total number of comparable health care
service incentive payments made pursuant to this article, the use of comparable
health care services by category of service for which comparable health care
service incentives are made, the total payments made to covered persons, the
average amount of incentive payments made by service for such transactions, the
total savings achieved below the average allowed amount by service for such
transactions, and the total number and percentage of a health carrier&#8217;s
covered persons in small group health benefit plans that participated in such
transactions.

K. Beginning no later than 18 months after implementation of comparable health
care service incentive programs under this section and annually by November 1 of
each year thereafter, the Commission shall submit an aggregate report for all
health carriers filing the information required by this section to the chairs of
the House Committee on Labor and Commerce and Senate Committee on Commerce and
Labor.

HISTORY: 2019, cc. 666, 684.