OLR Bill Analysis
AN ACT CONCERNING THE ESTABLISHMENT OF THE SUSTINET PLAN.
This bill establishes the “SustiNet Plan,” a new state health care program intended to extend insurance coverage to the state's uninsured. Among its many provisions, the bill:
1. creates a large insurance pool that includes recipients of Medicaid and HUSKY, state employees and retirees, families without health insurance from an employer, and individuals having difficulty affording high-cost insurance on the job;
2. digitizes medical records linked to a central database that physicians and other providers must use as a condition of participation in SustiNet;
3. creates “medical homes” that offer patients round-the-clock central coordination of their health care as well as guidance in managing it;
4. relies on periodic quality review of providers and evidence-based medicine; and
5. provides for public health campaigns in support of such measures as health screenings and immunizations.
The bill establishes the “SustiNet” Authority operated by a nine member board of directors composed of health care consumers, employers, health care experts, providers, labor, and business. The authority's purpose is to develop and implement the SustiNet Plan, a self-insured health care delivery plan operated by a public-private partnership designed to ensure that plan enrollees receive high quality health care coverage without unnecessary costs.
The bill also creates task forces addressing obesity, tobacco usage, and the health care workforce.
EFFECTIVE DATE: July 1, 2009, except that the sections on indentifying uninsured children (§ 19) and eligibility determination (§ 20) take effect July 1, 2011, and the three task forces established (§§ 27-29) take effect upon passage.
§ 1 — DEFINITIONS
The bill defines the “ SustiNetPlan” as a self-insured health care delivery plan, administered by the SustiNet Authority (see § 2) and operated by a public –private partnership that is designed to ensure that plan enrollees receive high-quality health care coverage without unnecessary costs.
“Standard benefits package” means a set of covered benefits with out-of-pocket cost-sharing limits and provider network rules, subject to the same coverage mandates that apply to small group health insurance sold in the state. It includes: (1) coverage of medical home services; inpatient and outpatient hospital care; generic and name-brand prescription drugs; laboratory and x-ray services; durable medical equipment; speech, physical, and occupational therapy; home health care; vision care; family planning; emergency transportation; hospice; prosthetics; podiatry; short-term rehabilitation; identification and treatment of developmental delays from birth through age three; and evidence-based wellness programs; (2) a per individual and per family deductible that excludes drugs; (3) preventive care with no copayment; (4) prescription drug coverage with copayments; (5) office visits for other than preventive care with copayments, mental and behavioral health services coverage, including tobacco cessation services, substance abuse treatment services, and obesity prevention and treatment services (these services must have parity with coverage for physical health services); and (6) dental coverage.
“Employer-sponsored insurance” means a group health plan as defined by the federal Employee Retirement Income Security Act of 1974 (ERISA).
A “participating provider” is a licensed health care provider that agrees to provide nonemergency services to SustiNet members.
A “small employer” is a person, firm, corporation, limited liability company, partnership, or association actively engaged in business or self-employed for at least three consecutive months, which, on at least 50% of its working days during the preceding twelve months, employed up to 50 people, the majority of whom worked in the state. Small employers include a self-employed individual, a municipality procuring health insurance according to the Municipal Employee Health Insurance Plan (MEHIP; CGS § 5-259), a private school procuring health insurance through a health insurance plan or an insurance arrangement sponsored by an association of private schools, and a nonprofit organization, a community action agency, or an association of personal care assistants procuring health insurance through MEHIP.
§ 2 — ESTABLISHING THE SUSTINET AUTHORITY
The bill establishes the SustiNet Authority as a public instrumentality and political subdivision of the state deemed to perform an essential public and governmental function. The SustiNet Authority is governed by a nine member board of directors who must be appointed by August 15, 2009. The board members and appointing authority are as follows:
1. the governor appoints the chairperson, with the advice and consent of the House and Senate, who must be an expert in health economics for a two-year term;
2. the Senate president pro tempore appoints an expert on health care delivery, including primary care, for a two year term;
3. the House speaker appoints a representative of HUSKY beneficiaries for a three-year term;
4. The Senate majority leader appoints a representative of the Connecticut Hospital Association for a three-year term;
5. the House majority leader appoints a representative of the Connecticut State Medical Society for a four-year term;
6. the Senate minority leader appoints a representative of the Connecticut Nurses' Association for a four-year term;
7. the House minority leader appoints a representative of private employers for a five-year term; and
8. the “Coalition Committee” appoints two members, one representing labor unions and one representing business management (Coalition Committee apparently refers to the State Employee Bargaining Agent Coalition (SEBAC)). These members serve at the committee's pleasure.
The commissioners of the departments of Social Services (DSS), Public Health (DPH), Mental Health and Addiction Services (DMHAS) , Insurance (DOI), and the State Comptroller are ex-officio, non-voting members of the board.
Board Organization, Meetings, and Duties
After their initial terms, board members serve a five-year term. Board members can be reappointed when their term expires. The board annually elects a vice chairperson. Board members are not compensated, but can be reimbursed for expenses.
Six board members constitute a quorum. Resolutions must be passed by the majority of those present. Meetings are open to the public, with a public comment portion at each meeting, although the board can meet in executive session to discuss personnel and “proprietary” matters. Board meetings must be held in different locations throughout the state. It is subject to ethical and auditing requirements and board members may have to abstain from deliberations and voting when they have a conflict of interest.
The board can delegate by resolution to three or more of its members such powers and duties as it deems proper. At least one of these members must not be a state employee.
The board, within available appropriations, must appoint an executive director who is not a board member and whose compensation is determined by the board. The compensation must reflect that typically paid in the private insurance industry for positions of comparable responsibility as determined by the board.
The board must also adopt procedures governing how it: (1) adopts an annual budget and operational plan; (2) hires, dismisses, promotes, and compensates employees; (3) approves non-budgeted expenditures over $ 5,000; (4) contracts for professional services which it must do at least once every three years (e. g. , legal, financial, insurance); (5) awards loans and grants; and (6) contracts with insurers or other entities for administrative purposes, such as claims processing and credentialing of providers.
The bill requires each board member to execute a surety bond in the sum of $ 50,000, while the executive director and other authority officers must execute a $ 100,000 surety bond. In lieu of this, the board chairman may execute a blanket position bond covering each member, the executive director, and authority employees. This must be approved by the attorney general and filed with the secretary of the state. The authority must pay for the bonds.
§ 3 — PURPOSES AND POWERS OF THE SUSTINET AUTHORITY
The bill establishes the purpose of the authority and its responsibilities. Its purpose is to design and implement the “SustiNet Plan”, a self-insured health care delivery plan, administered by the authority and operated by a public-private partnership, designed to ensure that plan enrollees receive high quality health care coverage without unnecessary costs. All state and municipal agencies, departments, boards, commissions and councils must fully cooperate with the SustiNet Authority.
The purpose of the SustiNet Plan is to:
1. improve the health of state residents;
2. improve the quality of health care and access to health care;
3. provide health insurance coverage to Connecticut residents who would otherwise be uninsured;
4. increase the range of health care insurance coverage options available to residents and employers; and
5. slow the growth of per capita health care spending both in the short-term and in the long-term.
Within available appropriations, the authority is authorized and empowered to:
1. have perpetual succession as a body politic and corporate and to adopt bylaws for regulation and conduct of its operations, adopt an official seal; and maintain an office at a place it designates;
2. sue and be sued;
3. adopt guidelines, policies and regulations necessary to implement the bill's provisions (other state quasi-public agencies are not authorized to adopt regulations);
4. invest any funds in specified ways (the authority may delegate its investment powers to the state treasurer);
5. contract with insurers or other entities for administrative purposes, such as claims processing and credentialing of providers, taking into account their capacity and willingness to offer networks of participating providers both within and outside the state and their capacity and willingness to help finance the administrative costs involved in establishment and initial operation of the SustiNet plan and reimbursing them using per capita fees or other methods that do not create incentives to deny care;
6. solicit bids from individual providers and provider organizations to insure adequate provider networks and provide all SustiNet Plan members with excellent access to high-quality care throughout the state and, in appropriate cases, outside the state's borders;
7. establish appropriate deductibles, minimum benefit packages, and out-of-pocket cost-sharing levels for different providers that may vary based on quality, cost, provider agreement to refrain from balance billing SustiNet Plan members, and other factors relevant to patient care and financial sustainability;
8. commission surveys of consumers, employers, and providers on issues related to health care and health care coverage;
9. negotiate on behalf of providers participating in the SustiNet Plan to obtain discounted prices for vaccines and other health care goods and services;
10. contract for such professional services as financial consultants, actuaries, bond counsel, underwriters, technical specialists, attorneys, accountants, medical professionals, consultants, and bio-ethicists as the board deems necessary;
11. purchase reinsurance or stop loss coverage, set aside reserves, or take other prudent steps that avoid excess exposure to risk in the administration of a self-insured plan;
12. enter into interagency agreements for performance of SustiNet Plan duties that may be implemented more efficiently or effectively by a state agency, including DSS and the office of the state comptroller;
13. set payment methods for providers that reflect evolving research and experience both within the state and elsewhere, promote patient health, prevent unnecessary spending, and ensure sufficient compensation to cover the reasonable cost of furnishing necessary care;
14. arrange loans on favorable terms that facilitate the development of necessary health care infrastructure, including community-based providers of medical home services and community-based preventive care service providers;
15. arrange for reduced price consultants to help health care providers restructure their practices and offices to function more effectively and efficiently in response to changes in health care insurance coverage and service delivery attributable to the implementation of the SustiNet Plan;
16. arrange for continuing medical education courses for physicians, nurses, and other clinicians, including training in culturally competent delivery of health care services;
17. appoint advisory committees to successfully implement the SustiNet Plan, further the objectives of the authority, and secure necessary input from various experts and stakeholder groups;
18. establish and maintain an Internet web site that provides for timely posting of all public notices issued by the authority or the board and such other information the authority or board deems relevant in educating the public about the SustiNet Plan; and
19. perform other acts and activities necessary to carry the authority's purposes and powers under the bill.
§ 4 — SUSTINET PLAN
The board must develop the procedures and guidelines for the SustiNet Plan which must comport with these five Institute of Medicine (IOM) principles:
1. health care coverage should be universal;
2. health care coverage should be continuous;
3. health care coverage should be affordable to individuals and families;
4. the health insurance strategy should be affordable and sustainable for society; and
5. health care coverage should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered and equitable.
The board must adopt action plans with measurable objectives in such areas as:
1. effective management of chronic illness,
2. preventive care,
3. reducing racial and ethnic disparities in health care and health outcomes, and
4. reducing the number of uninsured state residents.
The board must (1) monitor the progress made toward achieving these objectives and modify the action plans as necessary and (2) identify all funding sources that will be used to establish and administer the SustiNet Plan. It must report to the legislature on these activities.
§ 5 — HEALTH INFORMATION TECHNOLOGY
The bill delineates how electronic health records will be established for SustiNet members and how participating providers may gain access to hardware and approved software for interoperable electronic medical records. For these purposes, the bill defines:
1. “electronic medical record” as a record of a person's medical treatment created by a licensed health care provider and stored in an interoperable and accessible digital format;
2. “electronic health record” as an electronic record of health-related information on an individual that conforms to nationally recognized interoperability standards and that can be created, managed and consulted by authorized clinicians and staff across more than one health care organization;
3. ”subscribing provider” as a licensed health care provider that (a) either is a participating provider in the SustiNet plan or provides services in the state; and (b) agrees to pay a proportionate share of the cost of the goods and services described in this section, consistent with board-adopted guidelines; and
4. “approved software” as electronic medical records software approved by the board, after receiving recommendations from the information technology committee the bill establishes.
Information Technology Committee and Plan Developmen
The bill establishes an information technology committee to make a plan, subject to board approval, for developing, acquiring, financing, leasing, or purchasing fully interoperable electronic medical records software and hardware packages for subscribing providers.
The plan must include the development of a payment system that allows subscribing providers to pay for approved software and hardware and to receive other support services for the implementation of electronic medical records. Unless the board decides on an alternative financing method, capital acquisition costs must be funded through tax exempt bonds issued by the Connecticut Health and Educational Facilities Authority (CHEFA). Subscribing providers repay these bonds.
Implementation is coordinated with DPH, Office of Health Care Access (OHCA), and other state agencies to ensure “efficiency and compatibility. ”
Software and Hardware Options and Availability
Within available appropriations, the board must (1) provide approved software to subscribing providers and participating providers, consistent with the bill's capital acquisition, technical support, reduced-cost digitization of existing records, software updating, and software transition procedures and (2) develop and implement procedures to ensure that individual providers and hospitals have access to hardware and approved software for interoperable electronic medical records and establishment of electronic health records for SustiNet Plan members.
The information technology committee must consult with technology specialists and health care providers to select software and hardware options that meet the needs of the full array of health care practices. The bill requires the authority to procure hardware, software, and services. Vendors must be chosen through competitive bidding. But it also requires the committee to negotiate with vendors to obtain reasonable prices. The committee must insure, to the extent feasible, that the recommended electronic medical records packages can interact with other pertinent practice management modules including patient scheduling, claims submission, billing, and tracking of laboratory orders and prescriptions
The committee must also seek systems that have features which will help support more efficient and effective health care delivery. These features help with the implementation of evidence-based medicine, chronic care management, and care coordination and must include to the maximum extent feasible:
1. automated patient reminders concerning upcoming appointments;
2. recommended preventive care reminders;
3. automated provision of test results to patients;
4. decision support, including notice of recommended services not yet received by a patient;
5. notice of potentially duplicative tests;
6. notice of potential drug interactions and past adverse drug reactions to similar medications;
7. notice of possible violation of patient wishes for end-of-life care; and
8. notice of services provided inconsistently with care guidelines.
Approved software must be able to gather information to help the authority assess health outcomes and track the accomplishment of clinical care objectives. The board must ensure that SustiNet Plan providers who use approved software are able to electronically transmit to, and receive information from, all laboratories and pharmacies participating in the plan, without the need to construct interfaces other than those constructed by the authority.
The information technology committee must establish, within existing appropriations, a system of integrating information from subscribing providers' electronic medical records systems into a single electronic health record for each SustiNet Plan member. This integrated record must be updated in real time and accessible to any participating or subscribing provider serving the member.
The bill requires the board to establish guidelines for safeguarding privacy and data security, which include remedies and sanctions in cases where guidelines are not followed.
Condition of Participation in SustiNet
Under the bill, use of electronic medical records becomes a condition of provider participation in the SustiNet plan by July 1, 2015, with possible time extensions or exemptions made for special hardships for providers who do not meet the timeframe and whose participation in SustiNet is necessary to assure geographic access to care.
The bill includes specific incentives to help providers meet the goal of adoption of electronic medical records by July 1, 2015. The board must:
1. negotiate with one or more vendors to provide reduced-cost digitization of paper records;
2. help providers transition to another package “free of additional charge” if one of the approved packages is no longer satisfactory;
3. within available appropriations, hire or contract with health information technology professionals to provide training and technical assistance to subscribing health care providers;
4. provide technical assistance for providers who had previously implemented electronic medical or health records systems to transition to new software or assure existing software can connect and integrate;
5. share systemic cost savings achieved by implementing electronic medical and health records with subscribing providers. The amount of savings the board shares with a provider is limited to the amount of net financial loss experienced by the provider due to the implementation process;
6. offer implementation incentives, such as discounted fees, for early subscribers;
7. structure electronic health records to encourage the provision of medical home functions (see below). Electronic health records must generate automatic notices to medical homes that: (a) report when an enrolled member receives services outside the medical home, (b) describe member compliance or noncompliance with provider instructions, and (c) identify the expiration of refillable prescriptions.
§ 6 — MEDICAL HOMES
Medical Home Advisory Committee
The bill establishes a Medical Home Advisory Committee composed of physicians, nurses, consumer representatives and other qualified individuals to develop procedures and proposed regulations for the operation of medical homes. The committee must forward these to the board.
Medical Home Functions
Under the bill, the board defines medical home functions on an ongoing basis, incorporating evolving research on delivery of health care services. If provider infrastructure limits prevent all SustiNet plan members from enrolling in a medical home, then enrollment in medical homes must be implemented in phases with priority given to members where cost savings appear most likely, including members with chronic health conditions.
Under the bill, the he functions of a medical home include:
1. Assisting members to safeguard and improve their own health by:
a. advising members with chronic health conditions on how to monitor and manage their conditions;
b. working with members to set and accomplish goals related to exercise, nutrition, use of tobacco, among other behaviors;
c. implementing best practices to insure members understand and follow medical instructions; and
d. providing translation services and culturally competent communication strategies.
2. Care coordination that includes:
a. managing transitions between home and hospital;
b. proactive monitoring to ensure members receive all recommended primary and preventive care services;
c. providing basic mental health care, including screening for depression, with referral for those who require additional assistance;
d. addressing workplace, home, school, and community stress;
e. Referring to nonmedical services such as housing, nutrition, domestic violence programs, support groups; and
f. Ensuring information about members with complex health conditions is shared when multiple providers are involved and that they follow a single integrated treatment plan; and
3. Providing 24 hour access by telephone, secure email or quickly scheduled office appointments in order to reduce the need for hospital emergency room visits.
The board can assist in developing community-based resources to enhance medical home functions, including linguistically and culturally competent member education and care coordination. This can include hiring or contracting with necessary staff and arranging for low-interest loans that support development of community-based entities capable of fulfilling medical home functions.
Health Care Providers Who Can Serve as a Medical Home
Under the bill, a licensed health care provider who is capable of providing all core medical home functions as prescribed by the board can serve as a medical home. A group practice or community health center serving as a medical home must identify, for each member, a lead provider with primary responsibility for the member's care. In appropriate cases, as determined by the board, (1) a specialist may serve as a medical home and (2) a patient's medical home may temporarily be with a health care provider who is overseeing the patient's care for the duration of a temporary medical condition, including pregnancy.
Each medical home provider must be given a list of all medical home functions, including patient education, care coordination, and 24 hour accessibility. If a provider does not wish to perform, within his or her office, certain functions outside core medical home functions, the provider must arrange for other qualified entities or individuals to perform these functions in a way that integrates them into the medical home's clinical practice. The authority must assist the provider with this. These qualified entities or individuals may be employed by or under contract with the authority, health care insurers, or other individuals. They must be certified by the authority based on the quality, safety, and efficiency of the service they provide. The authority must make all arrangements required for a qualified entity or individual to perform any medical home function (not just non-core functions) the core provider does.
Medical home functions are reimbursable. The authority must set payment levels for those that are not normally reimbursed by commercial insurers, using different possible rate-setting mechanisms, including using Medicare rate-setting methods or setting a monthly case management fee.
The medical home provider must discuss possible referral with the specialist to determine if it is medically indicated and if so, what tests should be done in advance. This consultation is reimbursable.
§ 7 — HEALTH CARE PROVIDER COMMITTEE; CLINICAL CARE AND SAFETY GUIDELINES
The bill requires the board to establish a health care provider committee to develop clinical care and safety guidelines for use by participating health care providers. The committee must choose from existing nationally and internationally recognized care guidelines. It must continually assess the quality of evidence, the relevant costs, and the risks and benefits of treatments. It must forward its recommendations to the board. The committee must have provider and consumer members.
Under the bill, SustiNet providers must receive confidential reports comparing their practice patterns with their peers. The report must include opportunities for continuing education.
The board, in consultation with the committee, must approve quality of care standards for particular medical conditions. Such standards may reflect outcomes over the entire care cycle for each health care condition, adjusted for patient risk and general consistency of care with approved guidelines and other factors. Providers who meet or exceed the standards for a particular condition must be publicly recognized and made known to SustiNet members, including those who have been diagnosed with that particular medical condition.
The board must develop procedures requiring hospitals to periodically conduct quality of care reviews and develop quality of care improvement plans. Such reviews must include the identification of potential problems manifesting as adverse events or events that could have resulted in negative patient outcomes. As appropriate, they must incorporate confidential consultation with peers and colleagues, opportunities for continuing medical education, and other interventions and supports to improve performance. To the maximum extent permissible, the reviews must incorporate existing peer review mechanisms and are subject to the law's protections concerning peer review (CGS § 19a-17b).
The board, in consultation with hospitals serving SustiNet plan members, must develop safety standards for implementation in these hospitals. It must establish procedures to monitor and impose sanctions to ensure compliance with the standards. The board may also establish performance incentives to encourage hospitals to exceed such safety standards.
The board may provide participating providers with information about prescription drugs, medical devices, and other goods and services used in health care delivery. This information can address emerging trends involving the use of goods and services that the board judges are less than optimally cost effective. The board may give participating providers free samples of generic or other prescription drugs. It may also use procedures and incentives to encourage participating providers to furnish SustiNet members with appropriate evidence-based health care.
§ 8 — PREVENTIVE HEALTH CARE AND COMMUNITY-BASED PREVENTIVE HEALTH INFRASTRUCTURE
The bill requires the board to establish a “Preventive Health Care Committee” to make recommendations to improve health outcomes for members in areas of nutrition, physical exercise, tobacco use, addictive substances, and sleep, taking into account programs already underway in the state. The committee must include providers, consumers, and others chosen by the board. These recommendations may be targeted to special member populations where they are most likely to benefit members' health. They can include behavioral components and financial incentives for participants. By July 1, 2010 and annually afterward, the committee must submit its recommendations to the board and to the Public Health, Appropriations, and Finance, Revenue, and Bonding committees.
The bill requires all SustiNet plans sold to employers or individuals to cover community-based preventive care services that can be administered safely in community settings. Examples of these services are immunizations, simple tests, and health care screenings and examples of locations are workplaces, schools, or other community locations. Under the bill, community-based preventive care providers must use the patient's electronic health record to confirm that the service is needed and is not contra-indicated. They must furnish test results or documentation of the service to the patient's medical home or primary care provider.
§ 9 — ENROLLMENT OF VARIOUS GROUPS IN SUSTINET
State Employees, Retirees
Under the bill, as of July 1, 2011, SustinNet becomes the only source of health care coverage for qualified state employees and retirees and their dependents, including those who would have qualified under laws in effect on January 1, 2009. The SustiNet benefits, access to providers and cost-sharing rules must be consistent with collective bargaining agreements. The “coalition committee” retains jurisdiction over policy and practice matters that pertain exclusively to coverage for state employees and retirees, and may overrule any board decision concerning them that would reduce benefits or access to care, or increase enrollee costs.
HUSKY PLAN Part A and B Beneficiaries
The board must develop policies and procedures to ensure that HUSKY Plan part A and part B beneficiaries enroll in SustiNet. The policies and procedures must minimally provide that, to the extent permitted by federal law:
1. HUSKY beneficiary enrollment is phased in between July 1, 2011, and June 30, 2013;
2. be phased in geographically at the board's discretion;
3. provider reimbursement must gradually increase so that on or after July 1, 2011 per member per month costs calculated separately for children and adults do not fall below the percentages of median costs for large group coverage in the state (the bill does not define “large group”);
4. there is no reduction in HUSKY A, B, Medicaid, or SAGA benefits or increase in out of pocket cost sharing or premiums for people who qualified or would have qualified for benefits as of January 1, 2009; and
5. SustiNet does not enroll HUSKY plan part A beneficiaries who qualify for (a) Medicare, (b) Supplemental Security Income, or (c) any category of Medicaid eligibility based on a disability, provided this exemption does not apply to any person who intermittently qualifies for Medicaid as medically needy based on incurring medical bills for services not involving long-term care.
Those Not Offered Employee Sponsored Insurance (ESI)
Under the bill, people not offered employer sponsored insurance (ESI) can enroll in SustiNet beginning July 1, 2011. Those above 300% of the federal poverty level (FPL) (i. e. , not HUSKY-eligible) will be offered a standard benefits package with the option to purchase additional benefits at their full cost.
Anyone above 400% of FPL pays the full cost of premiums. Those with pre-existing conditions who have had continuous coverage cannot be excluded and will not have a waiting period for their pre-existing conditions to be covered. Enrollment within 60 days is considered continuous coverage. Those without continuous coverage who do not enroll within that period may be charged an increased premium.
Those between 301% and 350% FPL receive a subsidy to reduce premiums to 5% of household income at 300% of FPL. Those between 351% and 400% FPL receive a subsidy to reduce premiums to 7% of household income at 350% of FPL.
The authority will investigate the possibility of having premiums withheld and deposited directly into the SustiNet account. Unpaid premiums must be added to the individual's state income tax liability, including interest and penalties.
Those Offered Unaffordable or Inadequate ESI
The board must develop policies and procedures to give certain state residents who are offered ESI the option to enroll in SustiNet. This option is available on and after July 1, 2011. To be eligible for this option: (1) an individual must be ineligible for Medicare and (2) (a) the individual has family income at or below 400% FPL and the cost of the employee's share of premiums is more than 2% of household income above what the individual would pay for enrolling in SustiNet, (b) the individual's diagnosed health conditions make it highly probable that he or she will incur out-of-pocket costs over 7. 5% of household income, or (c) the actuarial value of the individual's ESI is less than 80% of the median actuarial value of health coverage offered by large employers in the Northeast. The board must establish a simplified enrollment procedure for those individuals who can enroll in the SustiNet plan under these provisions.
Employees who are covered by SustiNet under this method will still count toward the employer's “minimum participation” requirements for purchasing group coverage. When an employee enrolls in SustiNet through this method, his or her employer must pay SustiNet the money the employer would have paid for the individual's insurance in the form of an employer voucher payment.
Voucher payments are limited in two ways: (1) the total of employees who accept employer coverage and those for whom a firm makes voucher payments may not exceed the average percentage of workers and dependents who accept employer coverage offers at firms in the Northeast of the same general size and industry and (2) the cost of employer vouchers, plus the amount the employer pays for employer-sponsored insurance premiums cannot exceed what the employer would have paid for employer-sponsored health care coverage but for the implementation of the bill's provisions.
If the above described cap does not succeed in preventing vouchers from increasing an employer's health insurance costs, the employer may bring an appeal to reduce the required number of vouchers. An employer prevailing in such an appeal is granted costs and attorney's fees.
For an individual enrollee required to pay premiums to the SustiNet plan: (1) the authority must consult with the Department of Revenue Services (DRS) to develop and implement methods of withholding premium payments from the individual's paycheck and depositing the payments directly into the SustiNet account (see § 15) and (2) the amount of any unpaid premiums during a calendar year must be added to the individual's state income tax liability, with interest and penalties determined by treating the unpaid premium payments as state income tax obligations. Before DRS is informed of the enrollee's unpaid premiums, the board must provide the enrollee notice and an opportunity to be heard in order to challenge the board's determination that he or she did not pay the premiums or to allow the enrollee to arrange payment terms satisfactory to the board that do not involve a referral to DRS. The board and DRS must develop procedures through which the additional income tax payments made under this provision are forwarded to the SustiNet account.
§ 10 — OFFERING SUSTINET TO EMPLOYERS THROUGH EXISTING CHANNELS
The bill permits the authority to use various ways to sell SustiNet to employers, including public and private purchasing pools, agents, and brokers. It can offer multi-year contracts that have predictable premiums. The board must establish policies and procedures to ensure that employers can easily and conveniently purchase SustiNet plan coverage for their workers and dependents. These policies and procedures may include participation requirements, timing of enrollment, open enrollment, enrollment length, and other matters deemed appropriate by the board. The board must develop policies and procedures to prevent adverse selection. “Adverse selection,” in this context, means purchase of SustiNet Plan coverage by employers with unusually high-cost employees and dependents under circumstances where premium payments do not fully cover the probable claims costs of the employer's enrollees.
Small employers (up to 50 employees, see definition in § 1)) can purchase SustiNet beginning on July 1, 2011. Small group rating rules apply for setting premiums.
Larger employers can begin offering SustiNet on July 1, 2015. Further, to prevent adverse selection, SustiNet can take past claims experience and other employee and dependent characteristics into account in setting premiums, just as is done now in the insurance market for these types of employers. All employer premiums are subject to increases if premiums the previous year did not cover the group's costs. Increases must be applied uniformly to all employees with single-year contracts.
Both small and larger employers will be offered the standard benefits package. The authority can offer other benefits packages which cannot be any less comprehensive than the model benefits packages established by the bill in § 16.
§ 11 — INFORMATION CLEARINGHOUSE
The bill establishes an independent information clearinghouse to provide employers, individual consumers, and the general public with information about the care covered by the SustiNet Plan and by private health plans. The Office of the Healthcare Advocate (OHA) is responsible for establishing the clearinghouse and contracting with an independent research organization to operate it.
The purpose of the clearinghouse is to offer comparative information about quality of care, health outcomes for particular health conditions, access to care, patient satisfaction, adequacy of provider networks, and other performance and value information. The act charges OHA with developing such specifications.
The SustiNet Plan and health insurers must submit data to the clearinghouse, the latter as a licensing condition. Self-insured group plans may provide data voluntarily. Dissemination of information provided by any self-insured plan is limited, based on negotiations between the clearinghouse and the plan.
The clearinghouse must begin making its information public by August 1, 2012 and update it annually. It must avoid disseminating information that identifies individual patients or providers. To the extent possible, it must also adjust health outcomes based on patient risk levels so that provider outcome performance is more accurately captured.
§ 12 — UNFAIR COMPETITION
The bill discourages intentional interference with fair and open competition between SustiNet, ESI coverage, and any individual or group insurance sold in the state. In addition to other applicable penalties, the bill subjects breaches of this section to the same penalties that apply to bribery of officials.
§ 13 — EXPANSION OF MEDICAID AND HUSKY ELIGIBILITY
The act directs the DSS commissioner, to the extent allowed by federal law, to take all necessary steps to ensure that beginning July 1, 2011, HUSKY A includes all adults with incomes below 185% of the FPL, whether or not they are the custodial parents or caretaker relatives of minor children.
The bill also directs the commissioner to make adults with incomes from 186% to 300% FPL eligible for HUSKY B beginning July 1, 2011. Benefit levels and cost-sharing responsibilities for these adults must be comparable to those for households with children in HUSKY part B at the same income level. After accounting for differences in utilization between adults and children, it requires adults to be charged premiums that are no less than twice the amount charged to the household of a child enrolled at the same income level, calculated as a percentage of the federal poverty level.
Under the bill, beginning July 1, 2011 and to the extent allowed by federal law, immigration status cannot be a factor in determining eligibility for the HUSKY Plan A or B, or for SustiNet subsidies. The SustiNet Authority and DSS must obtain the maximum federal matching funds possible.
§ 14 — INDIVIDUAL MARKET REFORMS
The bill specifies that on or after July 1, 2011, the same rating rules existing in the small group market must apply in the individual market. Pre-existing conditions may not be excluded, except where it would be permitted if the policy were sold in the small group market (i. e. , based on gaps in continuous health coverage before enrolling in health insurance).
§ 15 — SUSTINET ACCOUNT AND FUNDING SOURCES
The bill establishes a separate, nonlapsing General Fund account (the “SustiNet Account”) for claims payment and related administrative costs. The bill charges the SustiNet Authority and DSS with ensuring that the costs of providing Medicaid, HUSKY Plan and SustiNet premium subsidies, as well as administrative costs, are sufficiently covered by deposits into the account.
It directs the authority to work with DSS to maximize the amount of federal funds used to help finance Medicaid, HUSKY, and SustiNet premium subsidies. DSS must seek any Medicaid and State Children's Health Insurance Plan waivers that are needed for the effective implementation of the bill. This includes a waiver to obtain the maximum amount possible in federal matching funds to provide coverage to childless adults.
The authority must determine premiums for individual enrollees and ensure premium payments are deposited in the SustiNet account.
Beginning January 1, 2012, the bill creates a shared responsibility requirement for employers who do not offer ESI coverage and their employees. These employers must pay a percentage of total payroll above a threshold amount established annually by DRS equal to the average payroll for a Connecticut employer with 10 employees.
For limited liability companies, S-corporations, and similar business entities “payroll” means income that is subject to federal payroll or federal self-employment taxation.
If an employer has total payroll above the threshold amount, and does not provide employer-sponsored coverage, the employer must make a shared responsibility payment equal to 3% of the employer's payroll above the threshold amount. The employees of such employers must collectively make annual shared responsibility payments of 1% of the employers' payroll that is above the threshold amount.
Employer and employee payments go into the SustiNet account. DRS must consult with the SustiNet board to develop policies and procedures for collecting shared responsibility payments through a modification of the existing payroll tax collection system.
The bill requires the state to deposit “maintenance of effort” payments into the SustiNet account. The SustiNet board must report annually, beginning December 31, 2009, to the governor , comptroller, and the Public Health, Human Services, Labor and Public Employees, and Appropriations committees on certified estimates of the maintenance of effort payment estimates needed for the succeeding two fiscal years. It must calculate maintenance of effort amounts equal to health care expenditures the state would have incurred under current law for state employees and retirees and for HUSKY, if not for SustiNet.
§ 16 — VALUE-BASED BENEFITS DESIGN
The bill requires OHA to develop model benefit packages that contribute the greatest possible amount of health benefit for enrollees, based on medical and scientific evidence, for the premium cost typical of private, employer-sponsored insurance in the northeast. By December 1, 2010, and then biennially, the office must report to the board and to the Public Health, Human Services, Labor and Public Employees, Appropriations, and Finance, Revenue and Bonding committees on the updated model benefits package. It may contract with an independent research organization for assistance.
After receiving these models, the SustiNet board may adjust the standard benefit package if it believes an adjustment would either yield better health outcomes for the same expenditure of funds, or provide additional health benefits or reduced cost-sharing for particular groups that justify an increase in net costs.
OHA must recommend guidelines for an incentive system to recognize employers who provide employees with benefits that are equivalent to or better than the model benefit packages.
By December 1, 2010, the office must report on these guidelines and recommendations to the governor, comptroller, and the Public Health, Labor and Public Employees, and Appropriations Committees.
§ 17 — PUBLIC EDUCATION AND OUTREACH CAMPAIGNS
The bill requires the SustiNet Authority board to establish public education and outreach campaigns to inform the public of SustiNet's availability and encourage enrollment. Community based organizations must be used to reach underserved populations. The campaign must be based on evidence of the cost and effectiveness of similar efforts in this state and elsewhere. The campaign must have an ongoing evaluation of its effectiveness, and changes in strategy as needed.
§ 18 — AUTOMATIC ENROLLMENT
The SustiNet board, in collaboration with state and municipal agencies, must, within available appropriations, develop systems to identify uninsured individuals and determine their eligibility for HUSKY coverage, SustiNet premium subsidies, or other sources of coverage, and to enroll them promptly into health insurance coverage. These systems must be in place by July 1, 2011. Three primary mechanisms to identify the uninsured must be employed:
1. By July 1, 2011, state income tax forms must, within available appropriations, be modified to request that taxpayers identify existing health coverage for each household member. DRS will, within available appropriations, notify taxpayers that restricting disclosure of income information may impede them from obtaining free or low-cost health coverage. DRS must provide the SustiNet board and DSS the necessary information for DSS to determine income eligibility and to automatically enroll the taxpayer into coverage for which he or she is eligible.
2. By July 1, 2011, the Department of Labor (DOL) must, within available appropriations, modify its unemployment insurance claims forms to request information about health insurance status for the applicant and his or her dependents. Applicants must be informed that this information will be shared with the SustiNet board and DSS.
3. By July 1, 2011, the SustiNet Board, in collaboration with DSS, must develop a method by which hospitals, community health centers, and other health care providers will identify uninsured individuals who seek health care, and transmit information to DSS. SustiNet must reimburse such health care providers retroactively for the cost of care if the individual is enrolled in SustiNet.
The SustiNet board, in collaboration with DSS and within available appropriations, must develop procedures to cross-reference databases of state residents with databases of residents with health insurance coverage. Beginning July 1, 2011, before enrolling any individual who appears to be uninsured in a state-administered health plan, the identity of the person must be cross-matched to confirm his or her insurance status. The board must develop notice and hearing procedures that allow people to contest a determination concerning insurance coverage status.
Beginning July 1, 2011, when an individual is determined to be uninsured, the SustiNet board must notify him or her in writing that he or she will be enrolled in health insurance coverage, with premiums based on income, unless the individual opts out of coverage. Premium payments are due and payable within 45 days of this notice. Individuals have 45 days to contest the determination that they are uninsured and provide proof of coverage or affirmatively opt to remain uninsured.
Income verification must be done by matching the individual with all accessible, cost-effective sources of information concerning the individuals' income. Individuals can challenge an initial income determination and demonstrate lower income that lowers the cost of health insurance coverage through SustiNet.
The initial health insurance premium invoice must be accompanied by a notice of the final opportunity to opt out of health insurance coverage. Individuals have 50 days from receiving the invoice to do this. An individual opting out will be disenrolled and will not be liable for past due premium payments.
The SustiNet board must provide written information to all individuals it determines are uninsured about the potential risks of remaining uninsured. Individuals who decide to opt out must notify the SustiNet board in writing of their choice to remain uninsured. The decision to remain uninsured is effective for no more than one year and must be renewed annually in writing.
Under the bill, a person who does not have access to ESI must be enrolled in SustiNet. An individual with access to ESI must enroll in it unless it is unaffordable or inadequate, in which case he or she can enroll in SustiNet or they can opt out of insurance as the bill provides.
Automatic enrollment procedures must be phased in beginning January 1, 2011 through July 1, 2014. The bill gives the board discretion to determine the phase-in approach and modify it as needed.
§ 19 — IDENTIFYING UNINSURED CHILDREN
The bill directs the DSS and education commissioners, in consultation with the SustiNet Authority Board to jointly establish procedures for sharing data from the National School Lunch Program to identify income eligible children for enrollment in the SustiNet Plan or HUSKY A and B.
§ 20 — ELIGIBILITY REDETERMINATION
Under the bill, the SustiNet Board and DSS must ensure that the redetermination of eligibility for SustiNet premium subsidies and for continued coverage in HUSKY A or B is convenient, consumer friendly, and safeguards privacy. The redetermination process must be designed in a manner that it is consistent with obtaining federal matching funds.
Eligibility for SustiNet premium subsidies or enrollment in HUSKY must be certified for a 12-month period. Changes in household circumstances (loss of income, loss of health insurance coverage, divorce, re-marriage, etc. ) during this period cannot adversely affect eligibility. But depending on the nature of the changed circumstances, individuals may qualify for less costly coverage or additional benefits.
The bill requires DSS, when claiming federal matching funds based on immigration status, to the extent permitted by federal law, to base them on statistically valid caseload samples and data matches with federal authorities rather than requiring applicants to provide documents.
DSS, when redetermining eligibility for the HUSKY A and B, and for SustiNet premium subsidies, must minimize procedural terminations of benefits through use of administrative renewals, ex-parte renewals, and telephonic renewals.
§ 21 — EVALUATING OUTCOMES AND MAKING POLICY AND PROCEDURAL CHANGES
Under the bill, the board is responsible for monitoring health care delivery system improvements under SustiNet and making policy and practice adjustments based on best practice evidence.
The board must examine electronic health records to identify outstanding medical practices and factors contributing to outstanding performance and incorporate them into the SustiNet plan. Electronic health records must also be used to evaluate comparative effectiveness of alternative treatments.
The board must regularly evaluate:
1. the application and enrollment process;
2. access to, utilization of, and quality of health care;
3. overall health status of SustiNet members; and
4. the effectiveness of any policies and practices that are revised.
The board must use these evaluations to revise policies and practices to improve outcomes for members or vulnerable subsets of members.
If, in evaluating performance, the board judges that the SustiNet Plan is causing a significant shift of insurance coverage responsibility from employers to consumers or to the public sector (“crowd out”), it may modify plan coverage to remedy the situation. Remedies can include modifying eligibility criteria for SustiNet premium subsidies and adult coverage through HUSKY B. However, those individuals qualifying for state-sponsored coverage under current law cannot be affected by such modifications.
The board can also revise the terms and conditions of SustiNet enrollment if it (1) judges that the plan is experiencing significant harm from “adverse selection,” (2) significant numbers of people are receiving inadequate employer-sponsored coverage, and (3) large numbers of people are deterred from enrolling in SustiNet because of its cost. In this case, the board can increase premium subsidies.
Before the board implements a policy decision it must, after newspaper, internet, and other notice, conduct a public hearing to obtain public input on the proposed revision. The board must monitor federal law, regulations, and policies to make recommendations to the General Assembly for any necessary or advisable changes to the bill as needed.
§ 22 — AUTHORITY REPORTING REQUIREMENTS
The SustiNet Authority must report annually to the appointing authorities of the board of directors and to the Public Health, Human Services, Labor and Public Employees, Appropriations, and Finance, Revenue and Bonding committees, starting December 1, 2010. The board must report in detail on the state of health care in the state and on the implementation of the SustiNet Plan. The report must include recommendations for legislative changes concerning the administration of the SustiNet Plan.
Each report filed on or after December 1, 2011 must include:
1. general trends in coverage, health outcomes, quality, and access for SustiNet Plan members;
2. health care provider workforce issues;
3. the extent to which ESI provides affordable access to necessary health care for employees and their dependents, including those with low incomes and health problems, along with policy options for addressing any problems identified; and
4. whether provider networks are sufficient to furnish all SustiNet Plan members with “excellent access” to care and if not, proposals to address this.
Each report filed on or after December 1, 2012 must include: (1) recommendations as to whether SustiNet Plan coverage should be extended to Medicare enrollees who are not state retirees; (2) a recommendation as to whether plan coverage should be extended to include Medicaid enrollees who are not enrolled in SustiNet due to age or disability; (3) whether SustiNet implementation has caused a cost shift from employers to taxpayers and if so, proposals to fix this; (4) whether additional changes to individual market regulation are needed; and (5) whether shared responsibility payments should be modified to reflect an employer's ability to pay based on size, wage level, industry, and other factors.
Reports filed on or after December 1, 2013 must indicate whether deficits or excesses in the physical infrastructure of the health care system are increasing health care costs without yielding corresponding gains in health outcomes, and if so, proposals to remedy this.
Each report filed after December 1, 2014 must address the effectiveness of the state's voluntary system of providing health care coverage to all state residents, including those who are young and healthy, and the advantages and disadvantages of mandating each resident to obtain coverage.
§ 23 — SUSTINET AUTHORITY AS A QUASI-PUBLIC AGENCY
The bill makes the SustiNet authority a “quasi-public agency. ”
§ 24 — INDEMNIFICATION OF THE SUSTINET AUTHORITY AND ITS DIRECTORS, OFFICERS, CONTRACTORS, AND EMPLOYEES
The bill requires the state to protect, hold harmless, and indemnify the SustiNet Authority and its directors, officers, contractors, and employees from financial loss and expense, including legal costs, arising out of any claim, demand, suit, or judgment based on any alleged act or omission in connection with, or any other legal challenge to, the SustiNet Plan. This protection applies if the individuals are found to have been acting in the discharge of their duties or within the scope of their employment and the act or omission is not found to be wanton, reckless, willful, or malicious.
§ 25 — ERISA JURISDICTION
The bill specifies that no state court has jurisdiction to hear a claim that any of the bill's provisions violates the Employee Retirement Income Security Act of 1974 (ERISA).
§ 26 — ENFORCEABILITY OF PROVISIONS
The bill provides that if any of its provisions or their applicability is held invalid by a court of competent jurisdiction, the remaining provisions are not affected.
§ 27 — OBESITY TASK FORCE
The bill creates a task force to study childhood and adult obesity. It must examine evidence-based strategies for preventing and reducing obesity and develop a comprehensive plan that will result in a reduction in obesity.
The task force includes the following members:
1. a representative of a consumer group with expertise in childhood and adult obesity, appointed by the House speaker;
2. two academic experts in childhood and adult obesity , one each appointed by the Senate president pro tempore and the governor;
3. two representatives of the business community with expertise in the subject, one each appointed by the House majority and minority leaders; and
4. two health care practitioners with expertise on the topic, one each appointed by the Senate majority and minority leaders.
These members may be members of the General Assembly.
The commissioners of public health, social services, and economic and community development and a representative of the SustiNet board are ex-officio, non-voting members. Appointments must be made within 30 days after the effective date of this provision. Vacancies are filled by the appointing authority. The members appointed by the House speaker and the Senate president pro tempore serve as chairpersons. The first meeting must be held within 30 days after the bill's effective date. The Public Health committee staff serves as the task force's administrative staff.
By July 1, 2010, the task force must report to the Public Health, Human Services, and Appropriations committees. The task force terminates when the report is submitted or January 1, 2011, whichever is later.
§ 28 — TOBACCO USE TASK FORCE
The bill establishes a task force to study tobacco use by children and adults. It must examine evidence-based strategies for preventing and reducing tobacco use and developing a comprehensive plan to cause a reduction in tobacco use by children and adults.
Its members are as follows:
1. a representative of a consumer group with expertise in tobacco use by children and adults, appointed by the House speaker;
2. two academic experts in the field, one each appointed by the Senate president pro tempore and the governor;
3. two representatives of the business community with expertise on the topic, one each appointed by the House majority and minority leaders;
4. two health care practitioners with expertise in the field, one each appointed by the Senate majority and minority leaders.
These task force members may be legislators.
The commissioners of public health, social services, and economic and community development and a representative of the SustiNet board are ex-officio, non-voting members. Appointments must be made, vacancies filled, and meetings held as described for the obesity task force. The chairpersons are the members appointed by the House speaker and the Senate president.
By July 1, 2010, the task force must report to the Public Health, Human Services, and Appropriations committees. It terminates when it submits the report, or January 1, 2011, whichever is later. The Public Health Committee staff serves as administrative staff.
§ 29 — HEALTH CARE WORKFORCE TASK FORCE
The bill establishes a task force to study the state's health care workforce. It must develop a comprehensive plan for preventing and remedying state-wide, regional, and local shortages of necessary medical personnel. Its members are as follows:
1. a representative of a consumer group with expertise in health care, appointed by the House speaker;
2. two academic experts on health care workforce, one appointed by the Senate president pro tempore, and the other by the governor;
3. two representatives of the business community with expertise in health care, one each appointed by the House majority and minority leaders; and
4. two health care practitioners, one each appointed by the Senate majority and minority leaders.
The commissioners of public health, social services, and economic and community development, the president of UConn, the chancellors of the Connecticut State University System and the regional Community-Technical Colleges , and a representative of the SustiNet board are ex-officio, non-voting members. Legislators may be on the task force. Appointments must be made, vacancies filled, and meetings held as described above for the previous two task forces. The chairs are the members appointed by the House speaker and the Senate president.
The Public Health Committee staff serves as administrative staff for the task force. The task force must report, by July 1, 2010, to the Public Health, Human Services, and Appropriations committees. The task force terminates as described above.
Public Health Committee
Joint Favorable Substitute