Connecticut laws/regulations;

OLR Research Report

August 29, 2001





By: John Kasprak, Senior Attorney

You asked for a summary of health maintenance organization (HMO) and managed care-related legislation over the past ten years.


The two major pieces of legislation concerning managed care over the past decade are PA 97-99 (An Act Concerning Managed Care), and PA 99-284 (An Act Concerning Managed Care Accountability). The 1997 act established a system for regulating managed care organizations (MCOs) and managed care plans. It (1) defined a number of managed care-related terms, (2) required MCOs to annually provide information to the Insurance Department, (3) required each managed care contract to include specific information, (4) required development of a consumer report card, (5) required each MCO to have an internal grievance procedure, (6) amended the department's regulatory authority over utilization review companies, (7) created an external appeals process within the Insurance Department, (8) established mental health parity requirements, (9) addressed emergency care coding, and (10) established other requirements concerning managed care.

PA 99-284 further regulated managed care in the state by (1) establishing the Office of Managed Care Ombudsman, (2) extending to MCOs certain insurance law provisions on unfair methods of competition and unfair or deceptive acts or practices, (3) expanding the mental health parity requirement, (4) requiring coverage of experimental treatments under certain conditions, (5) requiring MCOs to promptly pay claims, (6) requiring coverage determinations within a certain time period, (7) prohibiting selling of certain health information and requiring privacy standards for medical records, (8) requiring MCOs to resolve internal complaints within a certain time, (9) requiring authorization of currently prescribed drugs for chronic conditions, and (10) requiring coverage for outpatient self-management training for diabetes treatment, prostate screenings for certain men, and for Lyme disease treatment under certain conditions. This act also created the “physician profile” program in the Department of Public Health (DPH).

Other laws requiring coverage for a variety of treatments and procedures, that apply to HMOs as well as other health insurers, were passed over this time period. These include (1) medically necessary specialized formula for children, cancer clinical trials, annual mammograms, pap smear tests, colorectal cancer screening, and some hearing aids (all 2001 legislation); (2) amino acid preparation and low-protein modified food for treatment of inherited metabolic diseases (1997); (3) minimum stay following a mastectomy and reconstructive surgery (1997), (4) laboratory and diagnostic tests to treat diabetes (1997), (5) minimum maternity stays for mothers and their newborns (1996), and (6) direct access to obstetrician-gynecologists (1996).


Table 1 highlights managed care legislation from 1991 to the present.


Public Act

Act Summary


Requires health insurers, including Health Maintenance Organizations (HMOs), to cover (1) routine patient care costs associated with cancer clinical trials for treatment or palliation and Phase III trials for prevention involving therapeutic intervention; (2) annual mammograms beginning at age 40 instead of 50; (3) pap smear tests conducted as part of primary and preventive services that participating in-network obstetrician-gynecologists (OB/GYNs) must provide to those choosing direct access to OB/GYNs; (4) colorectal cancer screening; and (5) hearing aids for children on a limited basis.

Also prohibits use of drugs formularies or other restrictions on obtaining prescription drugs for mental health treatment.


Requires insurers, including HMOs, to offer small employers (including those consisting of one member) every group health insurance plan they offer to the small employer market unless it adversely affects the insurer's financial condition.


Requires health insurers, including HMOs, to cover medically necessary specialized nutritional formula administered under a doctor's direction and used to treat disease and other conditions in children up to age 3.


Clarifies the definition of “health care provider” for purposes of prompt payment of claims by insurers.


(June Special Session)

Requires that Preferred Provider Network (PPN) filings be made with the Insurance Department instead of Office of Health Care Access (OHCA).

00-57 and 00-216

Requires each managed care organization (MCO) and hospital to submit annual report to Department of Public Health (DPH) on its “community benefits” program. (00-216 addresses funding for DPH to compile and analyze these reports.)


Updates Connecticut's statutory accounting rules for insurance entities, including HMOs.


Excludes from the tax on HMO subscriber charges those the state pays under new or renewal contracts or policies (1) entered into on or after February 1, 2000 and (2) covering retired teachers and their spouses under health insurance plans provided by the state Teachers' Retirement System.


(credits raised in PA-01-6 June Special Session)

Gives tax credits to HMOs for providing health coverage to children under the HUSKY Plans.


(some changes to act made in PA 99-2, June Special Session)

Significant managed care reform act; creates managed care ombudsman office and addresses unfair methods and practices, mental health parity, experimental treatments, prompt claims payment, coverage determinations, health information and medical records, internal grievance procedures, chronic illness, diabetes, prostate cancer, Lyme disease, physician profiles, and public education outreach.



Requires MCOs and hospitals to report on their community benefits activities.


(subsequent changes made to act in PA 97-8, June Special Session)

Significant managed care reform act; establishes a system for regulating MCOs and managed care plans; requires annual information submittals by MCO to insurance commissioner; specifies requirement for managed care contracts and plan descriptions; establishes consumer report cards, utilization review, internal grievance procedures, external appeals, emergency care coding, mental health parity coverage, and provider-related provisions for medical protocols, gag clauses, and terminations.


Requires health insurers, including HMOs, to cover amino acid modified preparations and low-protein modified food for treatment of inherited metabolic diseases, under certain conditions.


Requires health insurers, including HMOs, to cover a minimum 48-hour hospital stay following a mastectomy or lymph-node dissection; also requires coverage of reasonable cost of breast reconstructive surgery after a mastectomy.


Requires health insurers, including HMOs, to cover laboratory and diagnostic tests to treat diabetes.


June 18 Special Session

Exempts HMOs from paying the 1.75% tax on subscriber charges for new or renewal health care coverage policies with the state that (1) are entered into after July 1, 1997 and (2) cover state workers, retirees, and their dependents. Also exempts subscriber charges HMOs receive from the federal government to cover Medicare recipients.


Requires insurers, including HMOs, covering maternity to provide mothers and their newborns with at least 48 hours of inpatient care following a vaginal delivery and at least 96 hours following a cesarean. Act also prohibits insurers from refusing to cover an applicant who once suffered from breast cancer if she remains breast cancer-free for at least five years before applying for coverage.


● Extends to HMOs the requirement (originally established in 95-199) that health insurers give female policy holders direct access to network obstetrician-gynecologists for certain health care services.

● Also extends to HMOs the prohibition against insurers advertising as their own, assets or funds that are not in their possession and available to pay claims.


Requires health insurers, including HMOs, to provide coverage for physician assistant services.


Modifies and adds filing requirements concerning PPNs (see PA 93-358).


Requires HMOs to participate in the Health Reinsurance Association (HRS), a nonprofit entity of insurers and self-insurers doing business in the state.


Establishes filing and notice requirements for PPNs operating in the state. PPNs must file information with the Office of Health Care access (OHCA).


Requires small employer health insurance carriers, including HMOs, to use adjusted community rating in establishing premium rates for small employer group health insurance plans.


Makes a number of changes to the law concerning health insurance for small groups (originally PA 90-134 which requires small employers' health insurers and HMOs to offer specific insurance products for small employers).


Establishes licensing requirements, minimum standards, and other procedures for companies engaged in utilization review.