State Representative Mark Falzone recently joined his colleagues in the Massachusetts House of Representatives in passing legislation designed to control health care costs for individuals and businesses in Massachusetts which will increase job availability in the Commonwealth.

Representative Falzone said, “I am very pleased the House has passed this legislation to support business and individuals in Massachusetts. This bill will cut the cost of health insurance, especially for small businesses. It will encourage the creation of new jobs and increase employment opportunities for our residents. Creating new jobs is my first priority, and holding the line on health care inflation is a significant part of this.”

The legislation requires carriers to submit rate filings to the Department of Insurance (DOI) at least ninety days before the effective date with sufficient detail so that the DOI may approve of the rates or disapprove if the rates are found inadequate, excessive or unreasonable in relation to the benefits provided.

Furthermore, the bill authorizes the Division of Health Care Finance and Policy (DHCFP) to review contracts for medical services between insurers and hospitals, physician group practices and imaging service providers to determine if payment increases are appropriate.

The bill also allows the Commissioner of Insurance to address instances of rate fluctuation. The Commissioner is permitted to annually smooth rate adjustments to prevent drastic increases in rates for individuals and employers.

In an effort to control costs by preventing consumers from adding or dropping health coverage for isolated cases, the bill limits open enrollment for health plans to twice annually in 2011, once in 2012 and once per year thereafter. In certain cases, however, the measure permits the Office of Patient Protection to grant open enrollment waivers to allow individuals to purchase insurance outside the open enrollment periods.

To help lower costs for consumers, the legislation allows patients access to prescription drug discounts.

“With health care premiums continuing to rise, the House has taken a step in the right direction towards controlling costs for the small businesses of Massachusetts,” House Speaker Robert A. DeLeo said. “As we strive to stimulate economic growth in the Commonwealth, this bill will help the bottom line of the small businesses that help drive our state’s economy.”

"I am proud of the overwhelming support the House gave yesterday to the small businesses and working families of the Commonwealth,” said Representative Ronald Mariano, Assistant Majority Leader. “This important legislation will bring immediate cost savings relief to the individuals being burdened by drastic increases in health care premiums. I thank the Speaker for his leadership and the membership of the House for casting this important vote."

The bill also establishes a Disproportionate Share Hospital Trust Fund to aid hospitals that serve a significant number of patients who are uninsured or insured through Medicaid. The legislation authorizes the DHCFP to assess fifty percent of the savings in provider rates of reimbursement for deposit in the Trust Fund. The remaining fifty percent of the savings in provider rates of reimbursement will be incorporated in premium savings to employers.

In order to maintain a focus on health care issues facing small businesses going forward, the bill increases small business representation on the Health Care Quality and Cost Council by adding a representative from a business with fewer than 50 employees. The Council is required to develop annual cost containment goals to promote affordable, high quality, patient-centered health care.

This legislation now heads to the Massachusetts Senate for consideration.