OLR Bill Analysis

sSB 1048 (File 545, as amended by Senate "A" and "B")*

AN ACT CONCERNING BULK PURCHASING OF PRESCRIPTION DRUGS.

SUMMARY:

This bill requires the commissioners of the departments of social services (DSS) and administrative services (DAS) and the comptroller, in consultation with the commissioners of the departments of Public Health (DPH) and Insurance, to develop a plan concerning the bulk purchasing of pharmaceuticals. Specifically, the plan must implement and maintain a prescription drug purchasing program and procedures to aggregate or negotiate pharmaceutical purchases for HUSKY Part B, State Administered General Assistance, Charter Oak Plan and ConnPACE recipients, Department of Correction inmates, and people eligible for insurance under the state employees and municipal employee health insurance plans.

The plan must also have the state join an existing multistate Medicaid pharmaceutical purchasing pool. It must determine whether it is feasible to subject some or all of the programs listed above to the preferred drug lists adopted by DSS for its various programs.

The bill requires DSS to submit the plan to the Public Health and Human Services committees by December 31, 2009. The plan must include (1) an implementation timetable, (2) anticipated costs or savings, (3) a timetable for achieving any savings, and (4) legislative recommendations.

The bill also makes changes to existing law on (1) adverse event reporting and disclosure and (2) nonpayment to hospitals and outpatient surgical facilities in cases of certain hospital-acquired conditions.

Finally, the bill prohibits specified health care practitioners from charging for certain imaging services.

*Senate Amendment “A” adds the insurance commissioner to the bulk purchasing consultation process.

*Senate Amendment “B” adds the provisions on adverse event reporting, nonpayment for certain hospital-acquired conditions, and imaging services. It also changes the committees that receive the bulk purchasing plan.

EFFECTIVE DATE: July 1, 2009 for the bulk purchasing provisions; upon passage for the adverse event reporting and the provision requiring a change to the Medicaid state plan concerning hospital-acquired conditions; October 1, 2009 for the imaging service provision; and January 1, 2010 for the provision on hospitals and outpatient surgical facility billing for hospital-acquired conditions.

ADVERSE EVENT REPORTING

By law, hospitals and outpatient surgical facilities must report adverse events to DPH. DPH is required to report annually to the Public Health Committee on the adverse events reported to the department. By law, the information collected on adverse events must not be disclosed and is not subject to subpoena, discovery, or introduction into evidence in any judicial or administrative proceeding, except as specifically provided by law. The law also specifies that it should not be construed as limiting access to or disclosure of investigative files maintained by DPH, including adverse event reports.

The bill specifies that it does not prohibit the DPH commissioner from sharing this information with DSS.

PAYMENT FOR HOSPITAL-ACQUIRED INFECTIONS

The bill prohibits hospitals and outpatient surgical facilities from seeking payment for any increased costs they incur as a direct result of a hospital-acquired condition identified as nonpayable by Medicare according to federal law (see BACKGROUND). This applies regardless of the patient's insurance status or sources of payment (including self-pay) except as otherwise provided by federal law or PA 09-2, § 8.

That state law requires the DSS commissioner to amend the Medicaid state plan to indicate that the approved inpatient hospital rates it pays for Medicaid-eligible patients are not applicable to hospital-acquired conditions that the Medicare program identifies as “nonpayable” (also referred to as “never events”) in accordance with a 2005 federal law to ensure that hospitals are not paid for these conditions.

The bill amends the DSS commissioner's responsibilities under PA 09-2 by requiring him to amend the Medicaid state plan to instead indicate that when reimbursement for inpatient hospital care includes hospital-acquired conditions identified as nonpayable by Medicare, the reimbursement is limited to the amount that would have been paid if the condition was not present.

Under the bill, “hospital” means an acute care hospital subject to the federal inpatient prospective payment system. An “outpatient surgical facility” is an entity, individual, firm, partnership, corporation, limited liability company, or association, other than a hospital, providing surgical services or diagnostic procedures for human health conditions that include use of moderate or deep sedation, moderate or deep analgesia or general anesthesia, as these levels are defined by the American Society of Anesthesiologists or by other professional or accrediting entity recognized by DPH.

IMAGING SERVICES

The bill prohibits specified health care providers from charging patients, insurers, or other responsible third-party payors for performing the “technical components” of CAT scans, PET scans, and MRIs if they, or someone under their direct supervision, did not actually perform the service. (The bill does not specify what constitutes the technical components of these imaging services. ) The prohibition applies to physicians, chiropractors, podiatrists, naturopaths, and optometrists.

Under the bill, radiological facilities and imaging centers must directly bill the patient or third party payor for their services. They cannot bill the practitioner who requested the service.

BACKGROUND

Hospital-Acquired Conditions

The federal Deficit Reduction Act of 2005 required the federal Medicare agency, beginning October 1, 2008, to limit payments to hospitals for preventable medical errors that result in serious consequences for patients. Since then, the Medicare program has identified selected costly or common conditions that it considers to be reasonably preventable by following evidence-based guidelines. When this occurs, Medicare will not pay a hospital for any increased costs it incurs as a result of one of these events occurring (i. e. treating a condition that was not present when the patient was admitted to the hospital. ) Medicare continues to pay for the physician and other covered items or services needed to treat the hospital-acquired condition.

The following conditions have been identified:

COMMITTEE ACTION

Public Health Committee

Joint Favorable Substitute

Judiciary Committee

Joint Favorable

Human Services Committee

Joint Favorable

Government Administration and Elections Committee

Joint Favorable

Insurance and Real Estate Committee

Joint Favorable