The bill amends the Rhode Island Health Care Reform Act of 2004 to include new provisions aimed at protecting the solvency of health systems, physicians, and advanced practice providers, as well as ensuring fair treatment of hospitals and an adequate clinical workforce. It introduces the concept of "regional rate parity," which requires payment by commercial insurers to Rhode Island hospitals, physicians, and advanced practice providers to be materially equivalent to what is paid for the same services in Massachusetts and Connecticut. The bill also defines "region" to include Rhode Island, Massachusetts, and Connecticut, and establishes a "regional average rate" based on the rates paid by commercial insurers in those states. Additionally, it mandates that insurers enter into contracts that provide for payment of not less than the regional average rate, with a provision that up to 25% of the rate increase for hospitals may be comprised of quality incentive payments.

The bill outlines a three-year period beginning in the first full calendar year after its enactment, during which insurers must enter into annual contracts with hospitals and providers that include rate increases equal to at least 33.33% of the Rhode Island payment shortfall plus the rate of healthcare inflation. Starting in 2028, the health insurance commissioner is required to update and publish the regional average rate at least every two years. The commissioner must also rescind any regulations inconsistent with the achievement and maintenance of regional rate parity. Any existing insurance contracts that do not meet the new rate requirements must be reopened to comply with the bill's provisions. The act is set to take effect upon passage.