Senate OKs bill prohibiting private insurers from paying rates lower than Medicaid


Bill intended to protect care for Rhode Islanders


STATE HOUSE – The Senate today approved legislation sponsored by Sen. Jacob Bissaillon that would prohibit any insurer in Rhode Island from reimbursing health care providers at rates any lower than the Medicaid rate.

The bill (2024-S 2726A) is aimed at addressing low reimbursement rates that have exacerbated the state’s shortage of health care providers, including primary care, mental health and behavioral health providers.

“This bill is about bolstering treatment options for vulnerable Rhode Islanders. It’s no secret that our state’s health care system is in crisis, and low reimbursement rates are a major contribution factor. Paying health care providers a fair rate for the critical services they provide is an important part of strengthening the foundation of health care in our state,” said Senator Bissaillon (D-Dist. 1, Providence).

The state Office of Health and Human Services sets the rates that Medicaid pays to providers for services. While those rates have been, in some cases, so low they are a loss for providers of some services, some private insurers have been setting their rates for some services at levels even lower, particularly for mental health and substance use treatment.

After a rate study, the Office of the Health Insurance Commissioner recently recommended significant Medicaid rate increases, which have been included in the 2025 state budget bill currently pending in the General Assembly.

“Many of the services for which private insurers pay less than Medicaid are the services that are disproportionately relied upon by some of the most vulnerable communities, making it even harder for them to access the care they need. Making Medicaid rates the floor for private insurers will strengthen health care availability for them and all Rhode Islanders, so everyone is better able to get the help they need, when they need it,” said Senator Bissaillon.

The bill now goes to the House, where Rep. Raymond A. Hull (D-Dist. 6, Providence, North Providence) is sponsoring companion legislation (2024-H 8056).