OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

HB-6431

AN ACT CONCERNING COOPERATIVE HEALTH CARE ARRANGEMENTS.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 14 $

FY 15 $

Attorney General

GF - Cost

555,000

555,000

State Comptroller - Fringe Benefits1

GF - Cost

157,157

157,157

Attorney General; Consumer Protection, Dept.

GF - Revenue Gain

Less than 50,000

Less than 50,000

Municipal Impact: None

Explanation

The bill results in an estimated annual cost of $712,157 for four attorneys, one paralegal and one health care analyst in the Attorney General's office (AG) to certify and oversee authorized cooperative health care arrangements. This cost includes $455,000 in Personal Services, $25,000 in Other Expenses, $75,000 in consultant fees and $157,157 to provide fringe benefits. These employees would be necessary to review these arrangements and issue written decisions approving or denying applications for certificates of public advantage, which authorize health care providers to engage in conduct that could lessen health care competition. Hearings may be necessary to obtain background information. In addition, the AG must actively supervise authorized cooperative health care arrangements and review annual reports submitted by parties to authorized cooperative health care arrangements. It is anticipated that in excess of ten cooperative arrangements may occur.

The bill results in a potential revenue gain of less than $50,000 as it requires managed care companies to negotiate in good faith with health care providers holding a certificate of public advantage issued by the AG. A company that fails to do so faces a daily $25,000 civil fine and is in violation of the state's Unfair Trade Practices Act.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation and the number of future violations.

1 The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller. The estimated active employee fringe benefit cost associated with most personnel changes is 34.54% of payroll in FY 14 and FY 15.