DelawareSS 2 for SB 1153rd General Assembly (2024–2026)SenateWALLET

AN ACT TO AMEND TITLE 16, TITLE 18, TITLE 29, AND TITLE 31 OF THE DELAWARE CODE, AND CHAPTER 237, VOLUME 83 OF THE LAWS OF DELAWARE, RELATING TO PRIMARY CARE SERVICES.

Sponsored By: Bryan Townsend (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 10 benefits, 1 costs, 0 mixed.

Balance-bill protection for state employees

Beginning in plan year 2030, state-plan members get protection from extra bills for hospital services subject to Medicare-based pricing. Providers cannot bill members beyond the carrier’s allowed payment amount. Members still owe their plan’s copays, coinsurance, and deductibles. Those amounts must be calculated using the carrier’s allowed payment.

Hospital price limits for state employees

Starting in plan year 2030, the state employee health plan must limit payments for inpatient, outpatient, and emergency hospital care. For hospitals other than free-standing children’s hospitals, outpatient limits are 275% of Medicare in 2030–2031 and 250% from 2032; inpatient and emergency limits are 310% in 2030–2031, 275% in 2032–2033, and 250% from 2034. Free-standing children’s hospitals follow the same percentages, using Medicare outpatient rates for outpatient and emergency care and TEFRA rates for inpatient care. Exemptions cover qualifying Medicare-dependent rural hospitals, urban Medicaid disproportionate-share hospitals, and approved global-budget participants; one rural exemption requires demonstrated progress on value-based payments. When no comparable Medicare rate exists, the Statewide Benefits Office selects Medicare rates for similar services.

More primary care for state employees

In plan year 2029, the state employee health plan must raise primary care spending by 1%. The starting point is the higher spending level from the two prior plan years. Spending must rise by 1% in 2030, 2031, and later years as needed, until it reaches 11.5% of medical costs, then stay at least that high. The State Employee Benefits Committee may allow some high-cost claims to be excluded from the calculation. State-plan carriers must also offer value-based care programs equivalent to those required of covered commercial insurers, without guaranteed services or savings.

More primary care in Medicaid plans

To the extent federal law allows, covered public-assistance health plans must raise primary care spending by 1% in their third plan year. The starting point is the higher spending level from the two prior years. In the fourth and later years, spending must rise by 1% until it reaches 11.5% of medical costs, then stay at least that high. The Division of Medicaid and Medical Assistance may exclude some high-cost claims from the calculation. These plans must also offer value-based care programs set by contract with the Division, without guaranteed services or household savings.

New limits on patient service costs

By January 1, 2029, the Office of Value-Based Health Care Delivery must issue rules limiting patients’ financial responsibility. The rules cover only services subject to the law’s specified rate-filing requirements. The law does not state the limit amounts or when those limits begin.

Medicare-based limits on hospital prices

For 2024–2027 rate filings, nonprofessional service price growth cannot exceed the greater of 2% or Core CPI plus 1%. That rule excludes free-standing children’s hospitals, qualifying Medicare-dependent rural hospitals, and urban Medicaid disproportionate-share hospitals. For other hospitals, Medicare-based limits in 2028–2029 filings are 275% for outpatient care and 310% for inpatient and emergency care; in 2030–2031 filings, they fall to 250% and 275%, respectively. From 2032 filings onward, all three limits are 250%; free-standing children’s hospitals follow the same percentage schedule using Medicare outpatient rates and TEFRA inpatient rates. The Medicare-based limits exempt qualifying rural hospitals, urban Medicaid disproportionate-share hospitals, and carrier-hospital participants in approved multi-payer global budgets; one rural exemption requires demonstrated progress on value-based payments.

Delaware tracks primary care performance

The state expands data collection to insurers, providers, and groups contracting for Delaware-licensed clinicians. Reports track insurer compliance and yearly quality, efficiency, and patient experience. The Office of Value-Based Health Care Delivery must set standard measures and methods for judging primary care performance. The Health Care Commission and Primary Care Reform Collaborative monitor providers’ use of and compliance with value-based care models. This replaces the Commission’s former role of advising on and approving a Delaware Primary Care Model.

Health insurers must fund primary care

Starting in 2026, covered insurers must spend at least 11.5% of total medical care costs on primary care each year. Five percent of that required primary-care spending must use upfront primary care management payments. The Insurance Commissioner must allow high-cost claims to be excluded from total medical costs and may allow other actual costs to be excluded. The state must also set minimum standards for payment models, provider price increases, and primary care investment; the former January 1, 2026 deadline is removed without a replacement. Insurers must report primary care spending for plan years 2027 and 2028, then annually until targets are met.

Health plans must offer value-based care

The state must design value-based care programs that increase provider accountability and improve access to added investment. Covered insurers must offer programs that follow the Insurance Department’s design rules. This starts by the first full plan year after the Department issues the required regulations. An insurer cannot exclude a contracted provider who accepts the same terms as other program participants. The law does not guarantee that a particular provider joins or that members save money.

Insurance penalties fund primary care work

The law creates a Primary Care Fund financed by specified insurance penalties. Annual legislative appropriations control spending by the Statewide Benefits Office and Medicaid Division on required implementation work. The fund can keep up to $5 million in uncommitted money at fiscal year-end; excess goes to the state retiree-benefits fund. Administrative penalty ceilings are $15,000 per violation for certain insurance licensees and $50,000 for insurers, holding companies, and other licensees. For the four specified spending and rate-filing violations, a penalty also cannot exceed the violation’s monetary value.

Large insurers face payment-contract requirements

These rules apply to insurers with two years in Delaware’s commercial market and more than 5,000 fully insured members. Their rate filings must tie at least 50% of total care costs to HCP-LAN Category 3 or 4 payment contracts. At least 15% must use Category 3B or 4 contracts, which include provider financial risk. Each threshold can instead be the highest percentage achievable under the law’s actuarial credibility requirements.

Sponsors & Cosponsors

Sponsor

Bryan Townsend
Democratic • Senate

Cosponsors

Eric Buckson
Republican • Senate
Nnamdi O. Chukwuocha
Democratic • House
Krista Griffith
Democratic • House
Kerri Evelyn Harris
Democratic • House
S. Elizabeth Lockman
Democratic • Senate
Melissa Minor-Brown
Democratic • House
Edward S. Osienski
Democratic • House
Ray Seigfried
Democratic • Senate
David P. Sokola
Democratic • Senate
Laura V. Sturgeon
Democratic • Senate
Madinah Wilson-Anton
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 62 • No: 0

House vote • 7/1/2026

Passed (SM required)

Yes: 41 • No: 0

Senate vote • 5/19/2026