To promote the development of health care cooperatives that will help businesses to pool the health care purchasing power of employers, and for other purposes.

January 7, 2003

Mr. FEINGOLD (for himself and Ms. COLLINS) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

To promote the development of health care cooperatives that will help businesses to pool the health care purchasing power of employers, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Promoting Health Care Purchasing Cooperatives Act'.

SEC. 2. FINDINGS AND PURPOSE.

(a) FINDINGS- Congress makes the following findings:

(1) Health care spending in the United States has reached 13 percent of the Gross Domestic Product of the United States, yet 42,500,000 people, or 15.5 percent of the population, remains uninsured.

(2) After nearly a decade of manageable increases in commercial insurance premiums, many employers are now faced with consecutive years of double digit premium increases.

(3) Purchasing cooperatives owned by participating businesses are a proven method of achieving the bargaining power necessary to manage the cost and quality of employer-sponsored health plans and other employee benefits.

(4) The Employer Health Care Alliance Cooperative has provided its members with health care purchasing power through provider contracting, data collection, activities to enhance quality improvements in the health care community, and activities to promote employee health care consumerism.

(5) According to the National Business Coalition on Health, there are more than 90 employer-led coalitions across the United States that collectively purchase health care, proactively challenge high costs and the inefficient delivery of health care, and share information on quality. These coalitions represent over 7,000 employers and approximately 34,000,000 employees.

(b) PURPOSE- It is the purpose of this Act to build off of successful local employer-led health insurance initiatives by improving the value of their employees health care.

SEC. 3. GRANTS TO SELF INSURED BUSINESSES TO FORM HEALTH CARE COOPERATIVES.

(a) AUTHORIZATION- The Secretary of Health and Human Services (in this Act referred to as the `Secretary'), acting through the Director of the Agency for Healthcare Research and Quality, is authorized to award grants to eligible groups who meet the criteria described in subsection (d), for the development of health care purchasing cooperatives. Such grants may be used to provide support for the professional staff of such cooperatives, and to obtain contracted services for planning, development, and implementation activities for establishing such health care purchasing cooperatives.

(b) ELIGIBLE GROUP DEFINED-

(1) IN GENERAL- For purposes of this section the term `eligible group' means a consortia of--

(A) two or more self-insured employers each of which are responsible for their own health insurance risk pool with respect to their employees; or

(B) two or more employers each of which--

(i) have 99 employees or less; and

(ii) are purchasers of health insurance (are not self-insured) for their employees.

(2) NO TRANSFER OF RISK- Individual employers who are members of an eligible group may not transfer insurance risk to such group.

(c) APPLICATION- An eligible entity desiring a grant under this section shall submit to the Secretary an application at such time, in such manner, and accompanied by such information as the Secretary may require.

(d) CRITERIA-

(1) FEASIBILITY STUDY GRANTS-

(A) IN GENERAL- An eligible group may submit an application under subsection (c) for a grant to conduct a feasibility study concerning the establishment of a health insurance purchasing cooperative. The Secretary shall approve applications submitted under the preceding sentence if the study will consider the criteria described in paragraph (2).

(B) REPORT- After completion of a feasibility study under a grant under this section, an eligible

group shall submit to the Secretary a report describing the results of such study.

(2) GRANT CRITERIA- The criteria described in this paragraph include the following with respect to the eligible group:

(A) The ability of the group to effectively pool the health care purchasing power of employers.

(B) The ability of the group to provide data to employers to enable such employers to make data-based decisions regarding their health plans.

(C) The ability of the group to drive quality improvement in the health care community.

(D) The ability of the group to promote health care consumerism through employee education, self-care, and comparative provider performance information.

(E) The ability of the group to meet any other criteria determined appropriate by the Secretary.

(e) COOPERATIVE GRANTS- After the submission of a report by an eligible group under subsection (d)(1)(B), the Secretary shall determine whether to award the group a grant for the establishment of a cooperative under subsection (a). In making a determination under the preceding sentence, the Secretary shall consider the criteria described in subsection (d)(2) with respect to the group.

(f) COOPERATIVES-

(1) IN GENERAL- An eligible group awarded a grant under subsection (a) shall establish or expand a health insurance purchasing cooperative that shall--

(A) be a nonprofit organization;

(B) be wholly owned, and democratically governed by its member-employers;

(C) exist solely to serve the membership base;

(D) be governed by a board of directors that is democratically elected by the cooperative membership using a 1-member, 1-vote standard; and

(E) accept any new member in accordance with specific criteria, including a limitation on the number of members, determined by the Secretary.

(2) AUTHORIZED COOPERATIVE ACTIVITIES- A cooperative established under paragraph (1) shall--

(A) assist the members of the cooperative in pooling their health care insurance purchasing power;

(B) provide data to improve the ability of the members of the cooperative to make data-based decisions regarding their health plans;

(C) conduct activities to enhance quality improvement in the health care community;

(D) the ability of the group to promote health care consumerism through employee education, self-care, and comparative provider performance information; and

(E) conduct any other activities determined appropriate by the Secretary.

(g) REVIEW-

(1) IN GENERAL- Not later than 1 year after the date on which grants are awarded under this section, and every 2 years thereafter, the Secretary shall study programs funded by grants under this section and provide to the appropriate committees of Congress a report on the progress of such programs in improving the access of employees to quality, affordable health insurance.

(2) SLIDING SCALE FUNDING- The Secretary shall use the information included in the report under paragraph (1) to establish a schedule for scaling back payments under this section with the goal of ensuring that programs funded with grants under this section are self sufficient within 10 years.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

From the administrative funds provided to the Secretary of Health and Human Services, the Secretary may use not more than a total of $60,000,000 for fiscal years 2003 through 2012 to carry out this Act.

END