SENATE, No. 606

SECTION 1. Section 1 of Chapter 176O of the general laws, as appearing in the 2002 official edition, is hereby amended by inserting after the definition “network” the following new definition:

“New Technology”, any medical device or drug that is for the first time approved for use by the federal Food and Drug Administration, as well as any new use or application of a previously approved device or drug that is approved by the federal Food and Drug Administration.

Section 2.   Section 6 of chapter 176O of the general laws, as so appearing, is hereby amended by inserting the following new subsection (b) at the end of the section:

(b) In the event use of new technology is initiated by a health care provider to provide health care services that is within the scope of an insured’s health benefit plan and within the scope of a contract between the provider and a carrier, and in the event the health care provider’s cost of using such new technology exceeds the cost to the provider of the care alternatives that are supplemented or replaced by the New Technology, said provider shall be entitled to receive fair, adequate and reasonable compensation from the insured’s carrier for the additional direct and indirect expense associated with the use of the new technology. 

For the purposes of this subsection (b), the health care provider may, at its election, notify the carrier of its initiation of use of the new technology and provide the carrier a good faith estimate of the annual incremental direct and indirect costs incurred by the provider in connection with its use of any such new technology.  Upon receipt of such notice, the carrier and the provider shall promptly commence good faith negotiations to establish fair, adequate and reasonable rates of payment for such new technology.  In the event the provider and the carrier are unable to reach agreement upon fair, adequate and reasonable rates of payment for the new technology within 45 days after the carrier’s receipt of such a notice from the provider, such failure shall constitute reasonable cause for the provider to terminate, upon 90 days advanced written notice, any contract between the provider and the carrier pursuant to which the provider would be obligated to provide such covered health care services to an insured under the provider’s contract with the Carrier.

Section 3.   A carrier, so called, shall include the provisions of Section 2 of the Act in any contract that is entered into, renewed, or amended on or after the effective date of this Act.