Rules and Regulations

Overview

Type of Filing: Adoption

Regulation Status: Active

Effective: 10/26/2022

Regulation Authority: R.I. Gen. Laws § 42-161-4

Purpose and Reason: These rules and regulations are promulgated to set forth the statewide policy for the use and operation of body-worn cameras. The policy is intended to govern Rhode Island law enforcement agencies using and operating body-worn cameras in connection with R.I. Gen. Laws Chapter 42-161, the Statewide Body-Worn Camera Program.

Rulemaking Documents

• Concise Explanatory Statement
• Notice of Proposed Rulemaking
• Proposed Rule
• Summary of Regulatory Analysis

Other Resources

• Recording of public meeting held on August 3, 2022, Rules and Regulations Establishing Statewide Policy for the Use and Operation of Body-Worn Cameras
• RI Secretary of State's Page on Rules and Regulations Establishing Statewide Policy for the Use and Operation of Body-Worn Cameras

Notice of Proposed Rulemaking

Title of Rule: Pre-Merger Notification for Medical-Practice Groups

Rule Identifier: 110-RICR-30-00-5

Rulemaking Action: Proposed Adoption

Rulemaking Authority:

R.I. Gen. Laws § 6-36-1 et seq.

R.I. Gen. Laws § 6-36-22

Summary of Rulemaking Action:

This Rule has been promulgated to set forth the notification requirements when there is a material change in the ownership or control of medical-practice groups in Rhode Island. To combat ever-increasing market concentration and rising costs in health care that do not result in increased quality of care, the Rule requires Rhode Island based medical-practice groups to notify the Rhode Island Attorney General’s Office of any merger, consolidation, or acquisition that would result in (1) ownership or control by a significant equity investor (defined to include private equity companies), (2) a group of eight (8) or more physicians, physician assistants, and/or nurse practitioners, or (3) any formation of a management services organization or similar entity created to administer contracts with health insurance carriers or third-party administrators on behalf of a medical-practice group. The increasing consolidation in the health services industry necessitates strengthened reporting requirements to ensure that the Attorney General’s Office, Rhode Island’s primary antitrust regulatory, is notified of potentially harmful transactions.

Additional Information and Public Comments:

All interested parties are invited to request additional information or submit written or oral comments concerning the proposed amendment, until a date to be determined, by contacting the appropriate party at the address listed below:

Farren Fuquea

Policy Analyst

150 S. Main Street

Providence, RI 02903 ffuquea@riag.ri.gov

In accordance with R.I. Gen. Laws § 42-35-2.8, an oral hearing will be granted if requested by twenty-five (25) persons, by a governmental agency or by an association having at least twenty-five (25) members. A request for an oral hearing must be made within ten (10) days of publication of this notice.

Regulatory Analysis Summary and Supporting Documentation:

To combat ever-increasing market concentration and rising costs in the healthcare market, the Rhode Island Attorney General’s Office (“RIAG”) is exercising its antitrust authority to regulate Rhode Island-based medical-services groups. Increased consolidation of healthcare providers “has driven American health care prices to new heights” without an attendant increase in quality of care.1 Accordingly, state Attorney General oversight of merger and acquisition activity in the health care services industry is essential to protect consumers and contain costs. The Rule ensures that the RIAG is made aware of non-hospital healthcare transactions and is thus able to effectively exercise its antitrust authority in the healthcare services industry.

Per-person spending on healthcare in Rhode Island is 2.45 times higher today than it was in 2000,2 and from 2016 to 2020 Rhode Island spent more on health care per capita than 70% of states.3 Market consolidation has been a primary driver of increased prices nationwide.4 Under R.I. Gen. Laws § 6-36-9, the RIAG is tasked with enforcing the state's antitrust laws, which serve to prohibit “unreasonable restraints of trade and monopolistic practices” in order to ensure that “the prices of goods and services … be fairly determined by free-market competition.”5 And under the Hospital Conversions Act, the Attorney General has the power to “adopt rules and regulations to accomplish the purpose” of the Hospital Conversions Act (“HCA”). The defined purposes of the HCA include “establish[ing] a review process and criteria for review of hospital conversion” and “assur[ing] the viability of a safe, accessible and affordable healthcare system.”6 The HCA requires parties to obtain RIAG approval prior to horizontal hospital conversion or consolidation.7 At the federal level, the Hart-Scott-Rodino Act (“HSR”) requires federal notification of deals that will surpass certain monetary thresholds.8 And yet, “the bulk of the growth of the largest [physician] groups” from 2007 to 2013 did not necessarily result from large or horizontal mergers, but from “hiring new physicians or acquiring very small groups.”9 These transactions are frequently below the HSR reporting threshold and go undetected, yet have been shown to lead to health care market consolidation, worse patient outcomes, and higher rates of mortality.10 And while the RIAG has the authority to block small-group consolidations that are “monopolistic” or “unreasonable restraints of trade,” there is no rule requiring notification to the RIAG or federal regulators of small, non-hospital transactions. It is near-impossible to investigate potentially anti-competitive combinations and behavior without the RIAG first knowing that a transaction will take place because plans for combination are generally closely held confidential commercial information. This Rule therefore serves to narrow the gap by ensuring that the RIAG has notice of potentially anticompetitive transactions with sufficient lead time to intervene before consolidation is consummated.

Concentration in the health care market is steadily increasing.11 Effective antitrust enforcement is a key means for restraining increases in market concentration.12 Because antitrust intervention depends upon RIAG notification, without the proposed rule, the health care services market will likely continue to consolidate in accordance with recent trends. Two sources of concentration in healthcare services are hospital-physician integration (when hospitals acquire physicians or physician groups), as well as acquisition of small group physician practices or individual physicians by larger physician groups. Evidence suggests that both types of concentration are occurring in Rhode Island. Health care services consolidation significantly harms consumer welfare. When physician groups are acquired by hospitals, their prices may increase with no corresponding increase in quality of care.13 Vertical integrations among physician groups and specialists similarly lead to higher costs and can result in “significantly” altered physician care practices.14

In addition to medical-practice group transactions involving hospitals and other medical groups, there have been more frequent reports and studies finding significant private equity consolidation among medical groups.15 Private equity companies and investors may structure their investments with respect to medical-practice groups by using management services organizations or similar affiliate entities that purportedly provide administrative/nonclinical services to the medical group, often in exchange for substantial fees.16 Through the use of these and other vehicles, private equity investors may be able to exert effective administrative control over multiple medical-group practices throughout a market. Researchers have previously found that increasing private equity consolidation among medical-group practices can result in significant increases in health care prices in certain markets,17 higher rates of practitioner turnover,18 or potential deteriorations in quality of care.19 Accordingly, to ensure appropriate monitoring of private equity-related transactions affecting Rhode Island based medical-practice groups, this Rule would require notification to the Office of the Attorney General of transactions involving significant equity investors.

The benefits of the Rule greatly outweigh the costs. By empowering the RIAG to investigate potentially anticompetitive transactions, the Rule will prevent excessive market consolidation, slow the growth of health care prices, and prevent degradation in quality of care. A pre-merger notification rule is essential for effectuating the Office’s antitrust powers and thus falls within the scope of the statute’s grant of regulatory authority.

Regulatory Analysis Summary and Supporting Documentation

Title of Rule: Guidelines to Prevent Deceptive Trade Practices in the Use of Artificial Intelligence Decision-Making that Impacts Rights, Opportunities, or Access to Resources or Services

Rule Identifier: 110-RICR-40-00-5

Rulemaking Action: Advance Notice of Proposed Rulemaking

Rulemaking Authority: R.I. Gen. Laws § 6-13.1 et seq.

Advance Notice Details:

Systems that use computer algorithms and other methods, including large language models or artificial intelligence (AI), fundamentally impact the lives of Rhode Islanders. Many new software products are being developed and marketed to consumers and businesses with promises to increase efficiency in health care, employment, housing, education, and other services that are offered to the public. Some of these programs make decisions about who can see the doctor, whether a drug is approved, who qualifies for housing or whether your application will be seen by an employer. In the past, many communities have been unfairly impacted when the bias of human-designed systems excluded them from opportunities or participation in health care, education, housing, and employment. The Attorney General is particularly concerned with the consequences of unwittingly allowing computers to discriminate against people in ways long-determined are intolerable.

A second concern is that consumers and businesses may be misled by sellers of these products about the product’s effectiveness. Research reflects that people credit decisions made by computers as more trustworthy than those made by humans. The risk of consumer confusion is therefore heightened in this area.

The Attorney General already monitors this sector and has and will use existing authority to enforce against unfair and deceptive trade practices in the marketing of software products containing algorithms and in new unfair and deceptive trade practices carried out through advanced technology in the sale and delivery of goods and services to the public, similar to federal law enforcement agencies.

The Attorney General is evaluating whether additional regulation in this area is necessary or beneficial.

Chapter 13.1 of Title 6 of the Rhode Island General Laws, the Deceptive Trade Practices Act (DTPA), was enacted in 1969 to protect all Rhode Islanders from deceptive or unfair business practices. A 2021 amendment made clear that the office of the Attorney General can investigate all violations of the statute. Section 6-13.1-7(c) of the Rhode Island General Laws tasks the Attorney General with promulgating rules and regulations to prevent unfair or deceptive acts or practices in the conduct of any trade or commerce. Specifically, the law delineates the power of the Attorney General to address violations of the DTPA:

To accomplish the objectives and to carry out the duties prescribed by this chapter, the attorney general, in addition to other powers conferred upon him or her by this chapter, may issue subpoenas to any person; administer an oath or affirmation to any person; conduct hearings in aid of any investigation or inquiry; and prescribe any forms and promulgate any rules and regulations that may be necessary, which rules and regulations shall have the force of law; provided that none of the powers conferred by this chapter shall be used for the purpose of compelling any natural person to furnish testimony or evidence that might tend to incriminate the person or subject him or her to a penalty or forfeiture; and provided further that information obtained pursuant to the powers conferred by this chapter shall not be made public or disclosed by the attorney general or his or her employees beyond the extent necessary for law enforcement purposes in the public interest.

Accordingly, the Attorney General is issuing this Advance Notice of Proposed Rulemaking to gather relevant information and input from the public, in advance of the possible promulgation of a proposed rule addressing deceptive trade practices related to the use of technologies that support or supplant human decision-making in ways that negatively impact consumers’ rights, opportunities, or access to resources or services, including through the use of algorithms, software, predictive and generative AI, and other new and emerging technologies.

We invite comments on the need for such regulation, the risks of bias in computer-aided decision-making, and on strategies to mitigate those risks.

Specifically, the Attorney General is seeking comments regarding:

• The nature, prevalence, and examples of products incorporating these technologies that have, or have the potential to, negatively impact Rhode Islanders and Rhode Island businesses through deceptive practices or unfair methods of competition, including but not limited to products within the fields of health care, housing, employment and education;
• How, if at all, the Attorney General should regulate these products;
• If any regulations should specifically address the topics listed below:
  • Automated decision-making systems;
  • Discrimination based on protected categories (i.e., race, national origin, gender, sexual orientation, etc.);
  • Validating claims regarding use and efficacy of AI;
  • Purpose limitations;
  • De-biasing or bias mitigation policies;
  • Whether safe harbors can adequately protect people from risk of harm;
  • What types of review policies or other practices might adequately constitute safe harbors that are sufficiently protective;
  • Consumer consent;
  • How state regulation may interact with future federal regulation; and
  • Notice, transparency, and disclosure;
  • Potential penalties or remedies if these products are regulated and those regulations, or other applicable laws, are violated; and
  • Other information regarding the impact of the proliferation of these new technologies on consumers, including supporting material and references.

Submission of Comment:

All interested parties are invited to request additional information or submit written or oral comments concerning the proposed amendment, until a date to be determined, by contacting the appropriate party at the address listed below:

Farren Fuquea

Policy Analyst

150 S. Main Street Providence, RI 02903 ffuquea@riag.ri.gov

In accordance with R.I. Gen. Laws § 42-35-2.8, an oral hearing will be granted if requested by twenty-five (25) persons, by a governmental agency or by an association having at least twenty-five (25) members. A request for an oral hearing must be made within ten (10) days of publication of this notice.