AUGUSTA – Gov. Paul LePage and the Legislature’s Republican leaders may have found a way to avoid an embarrassing intraparty squabble over the governor’s veto last week of a health insurance bill that had won unanimous approval from the Legislature.

They have agreed on a compromise that would allow Republican lawmakers to vote to sustain the governor’s veto when the House acts on it today.

For his part, LePage has submitted the compromise legislation, which he expects will appease Republicans who had supported the original bill.

“The governor has heard from legislators. He has listened to their concerns,” said LePage spokeswoman Adrienne Bennett.

Last week, LePage surprised members of his own party when he vetoed L.D. 1222. The bill would bar insurers from requiring a health care provider to charge an insurance company the lowest rate the provider negotiates with any other insurance carrier.

The requirements are known as “most favored nation” clauses because similar terms are used in tariff agreements among nations.

Physicians and physical therapists lobbied to ban such clauses, arguing that they are anti-competitive and make it harder for them to survive as independent businesses because they lack the negotiating power of hospitals.

In his veto message to the Legislature on Tuesday, LePage said he strongly believes that businesses have a right to contract with each other as they deem appropriate.

After some Republicans complained about the veto, LePage met Wednesday with GOP leaders and co-chairs of the Legislature’s Insurance and Financial Services Committee, which unanimously endorsed the bill last month.

LePage then submitted legislation that would ban most favored nation clauses but also allow Maine’s superintendent of insurance to issue a waiver, Bennett said.

“This is a move that will bring this legislation forward,” she said. “It’s more of a targeted approach rather than a one-size-fits-all approach.”

It is unclear what conditions an insurer would have to meet to earn a waiver. The bill’s language is still being reviewed by staff in the Legislature’s Revisor’s Office and is not yet available to the public.

The Legislature would take up the bill next year because there’s no time left to do it this year.

Lance Dutson, spokesman for House Speaker Robert Nutting, R-Oakland, said GOP leaders agree with the compromise.

House Minority Leader Emily Cain, D-Orono, noted that no one from the governor’s office got involved with the bill until after the Legislature passed it. She said it would be a shame to kill legislation that had unanimous support simply because the governor didn’t like it.

“It’s a good bill,” she said. “I understand the politics might seem tricky, but the policy is easy.”

The bill’s sponsor, Rep. Sharon Treat, D-Hallowell, agreed, saying the compromise appears to be similar to the original legislation. “If it’s worth doing,” she said, “it’s worth doing now and not waiting until next year.”

The bill faced no opposition at a public hearing.

Anthem Blue Cross and Blue Shield, which controls more than 50 percent of the commercial insurance market in Maine, later sent the committee a letter in opposition, arguing that most favored nation clauses ensure lower health care costs for consumers.

But Gwen Simons, past president of the Maine Chapter of the American Physical Therapy Association, said physical and occupational therapists in private practice need the bill if they are to stay in business.

Although waiting until next year for legislation is an unfortunate delay, she said, it may nevertheless give lawmakers more time to examine other contract language demanded by insurers that hurts private practitioners, such as the ability to unilaterally reduce fees without consulting providers.

In some instances, a most favored nation clause can encourage competition, Simons said, and she hopes the bill will establish a process that only grants a waiver in those cases.

MaineToday Media State House Reporter Tom Bell can be contacted at 699-6261 or at [email protected]