(a) The board is authorized to establish a health insurance plan for public school employees of this state and to adopt and promulgate rules and regulations for its administration, subject to the limitations contained in this subpart. Such plan may provide for group hospitalization, surgical, and medical insurance against the financial costs of hospitalization, surgery, and medical treatment and care and may also include, among other things, prescribed drugs, medicines, prosthetic appliances, hospital inpatient and outpatient service benefits, and medical expense indemnity benefits, including major medical benefits.

(b) The board shall investigate fees of hospitals, pharmacists, and practitioners of the healing arts and present recommendations to the General Assembly by not later than January 15, 1991, for a schedule of maximum fees for hospitals and practitioners of the healing arts. The recommended fees for hospitals shall be determined based upon a statistical analysis of the peer groups adjusted for the intensity of the case mix for hospitals of same licensure classification or subclassification (e.g., general, pediatric, psychiatric, rehabilitation, etc.) and of similar services in the same geographic area. The recommended fee schedule shall not be at the average of the usual and customary charges if the board determines that the average represents an unreasonably high or low charge.

(c) The recommended fees for practitioners of the healing arts and pharmacists shall be determined based upon a statistical analysis of the peer groups for such practitioners and pharmacists of the same licensure classification (e.g., internists, family practitioners, cardiologists, neurosurgeons, etc.) and of similar services in the same geographic area. The recommended fee schedule shall not be at the average of the usual and customary charges if the board determines that the average represents an unreasonably high or low charge.

(d) The recommendations shall include an analysis of all hospitals, pharmacists, and practitioners accepting assignment of benefits for such services not to exceed the amount authorized by the fee schedule. The board shall publish a list of practitioners that accept assignment of benefits under the plan.

(e) The recommendations shall include an analysis of the impact of practitioners agreeing to provide medical or surgical services at a reduced rate for members of the health insurance plan and of pharmacists and hospitals agreeing to provide hospital services, medical equipment, or pharmaceuticals at a reduced rate for members of the health insurance plan. The board shall publish a list of practitioners of the healing arts, pharmacists, and hospitals that offer a reduced rate for members and the rate at which those services, equipment, or pharmaceuticals have been offered.