PA 15-146—SB 811
Public Health Committee
Finance, Revenue and Bonding Committee
AN ACT CONCERNING HOSPITALS, INSURERS AND HEALTH CARE CONSUMERS
SUMMARY: This act includes numerous provisions affecting hospitals and health systems, health care providers, and health carriers (e. g. , insurers and HMOs), as described in the section-by-section analysis below.
With respect to hospitals and health systems, the act:
1. places certain limits on allowable facility fees for outpatient services;
2. adds to the factors that the Department of Public Health's (DPH) Office of Health Care Access (OHCA) must consider when reviewing a certificate of need (CON) application for a hospital ownership transfer;
3. sets certain requirements when OHCA places conditions on its approval of a CON application involving a hospital ownership transfer;
4. requires OHCA to hire a post-transfer compliance reporter for three years after certain hospital ownership transfers are completed; and
5. requires OHCA to conduct a cost and market impact review for certain hospital ownership transfers that considers factors related to the transacting parties' business and relative market positions.
Among other provisions concerning health care providers, the act (1) requires them to give patients notices of costs for nonemergency services in certain circumstances, (2) creates notice requirements when providers refer a patient to an affiliated provider, and (3) expands what provider conduct constitutes an unfair trade practice.
Regarding health carriers, it requires them to (1) provide insureds notice about covered benefits, the network status of health care providers, and surprise bills and (2) bill insureds at the in-network level for services if the services were emergency in nature or resulted in a surprise bill. The act also requires the Connecticut Health Insurance Exchange (“Access Health CT”) to (1) encourage health carriers to offer plans with tiered networks and (2) offer those plans through the exchange.
The act requires each health carrier to maintain a website and toll-free telephone number allowing consumers to obtain information on in- and out-of-network costs. It also sets certain limits on the copayments insurers can collect for facility fees.
It requires Access Health CT, within available resources, to establish a consumer health information website with comparative price, quality, and related information.
It establishes a statewide health information exchange, to be overseen by the Department of Social Services (DSS), and sets deadlines for hospitals, clinical laboratories, and certain providers to connect to and participate in the exchange. Among other changes concerning health information technology, it establishes an advisory council to advise the DSS commissioner on various related matters.
Some of the act's other changes include:
1. narrowing the current exemption from the CON requirement for a group practice of eight or more physicians transferring ownership to another group practice;
2. requiring the state's Health Care Cabinet to study health care cost containment models in other states and report its findings and recommendations to the legislature by December 1, 2016;
3. requiring the insurance commissioner to convene a working group to study rising health care costs that includes the state comptroller, health care advocate, and DPH commissioner;
4. requiring DPH to report to the Public Health Committee on recommendations for eliminating CON approval requirements or creating an expedited approval process for certain health care facility transactions that currently require such approval;
5. requiring the chair of the Connecticut Health and Education Facilities Authority board of directors to study and report to the Public Health Committee on financing options for community hospitals to make certain improvements, such as purchasing medical equipment or updating information technology; and
6. eliminating the CON requirement for the acquisition of certain replacement scanners.
The act also makes minor, technical, and conforming changes.
EFFECTIVE DATE: Various, see below.
§§ 1 & 2 – CONSUMER HEALTH INFORMATION WEBSITE
The act requires the Connecticut Health Insurance Exchange (“Access Health CT”), starting July 1, 2016 and within available resources, to establish and maintain a consumer health information website. The website must be designed to help consumers and institutional purchasers make informed decisions about health care and their choice of health care providers. It also must allow comparisons of health carrier reimbursement amounts to providers.
The website must present information in language and a format understandable to the average consumer. Access Health CT must publicize the website.
EFFECTIVE DATE: October 1, 2015
Under the act, the website must contain information comparing the quality, price, and cost of health care services. This must include, to the extent practicable:
1. comparative price and cost information for the primary diagnoses and procedures reported by the insurance and DPH commissioners (see below), categorized by payer and listed by provider;
2. links to the websites for The Joint Commission (see BACKGROUND) and Medicare hospital compare tool where consumers may obtain comparative quality information;
3. definitions of common health insurance and medical terms so consumers may compare health coverage and understand coverage terms;
4. factors consumers should consider when choosing an insurance product or provider group, including provider network, premium, cost-sharing, covered services, and tier information; and
5. patient decision aids.
(PA 15-242, § 58, removes the requirement that the website contain information on patient decision aids. )
The act allows Access Health CT to consider adding quality measures to the website as recommended by the State Innovation Model Initiative program management office.
Data Submission and Reporting Requirements
The act establishes data submission and reporting requirements to collect data for the consumer website. It requires Access Health CT to post all such information on the website. (PA 15-242, § 58, instead requires this posting to occur on a website Access Health CT establishes, in a manner and timeframe that is organizationally and financially reasonable, in its sole discretion. )
The act provides that all information Access Health CT collects, stores, and publishes under these provisions is subject to the federal Health Insurance Portability and Accountability Act (HIPAA).
Insurance and Public Health Commissioners. The act requires the insurance and DPH commissioners, by July 1, 2016 and annually after that, to jointly report to Access Health CT and make available on their departments' websites the following information on health procedures in the state, to the extent it is available:
1. the 50 most frequent inpatient primary diagnoses and procedures,
2. the 50 most frequent outpatient procedures,
3. the 25 most frequent surgical procedures, and
4. the 25 most frequent imaging procedures.
The lists may include bundled episodes of care (i. e. , all health care services related to the treatment or a service category for that treatment). The lists may be compiled using discharge and claims data available to the departments.
The act allows Access Health CT to expand this requirement to include more admissions and procedures.
Health Carriers. Starting by January 1, 2017, the act requires health carriers to annually submit to Access Health CT, in a format it prescribes, a report listing, by provider:
1. the billed and allowed amounts (i. e. , maximum reimbursements) paid to in-network providers for each diagnosis and procedure included in the commissioners' report described above and
2. out-of-pocket costs for each such diagnosis and procedure (i. e. , unreimbursed costs such as deductibles, coinsurance, and copayments).
For this purpose, “health carriers” are insurers, HMOs, hospital or medical service corporations, fraternal benefit societies, or other entities delivering, issuing, renewing, amending, or continuing individual or group health insurance policies in Connecticut that cover (1) basic hospital expenses; (2) basic medical-surgical expenses; (3) major medical expenses; or (4) hospital or medical services, including coverage under an HMO plan.
DSS Commissioner. The act requires the DSS commissioner to submit to Access Health CT all Medicaid data it requests for the all-payer claims database (APCD), which Access Health CT administers. The commissioner must do this for purposes of administering the state's Medicaid program and to the extent federal law allows.
§§ 2 & 3 – NOTICES TO PATIENTS
Providers: Nonemergency Care
Beginning January 1, 2016, the act requires all licensed health care providers, before any scheduled nonemergency admission, procedure, or service, to determine whether the patient is insured.
If the patient is uninsured or the provider is out-of-network, the provider must notify the patient in writing, electronically or by mail, (1) of the charges for the admission, procedure, or service; (2) that the patient may be charged for unforeseen services that may arise, and is responsible for these charges; and (3) that if the provider is out-of-network, the admission, service, or procedure will likely be deemed out-of-network and applicable out-of-network rates may apply. The act specifies that these provisions do not prevent a provider from charging for such unforeseen services.
Hospitals: Nonemergency Procedures Listed in Commissioners' Report
Under the act, beginning January 1, 2017, hospitals must notify patients at the time they schedule a nonemergency diagnosis or procedure included in the DPH and insurance commissioners' report described above (e. g. , the 50 most frequent outpatient procedures) of their right to request related cost and quality information.
If a patient requests a diagnosis or procedure listed in the report, the hospital must provide written notice to the patient within three business days after scheduling the diagnosis or procedure, with the following information:
1. for uninsured patients, (a) the amount to be charged if all charges are paid in full without a third party paying any portion, including any facility fee, or (b) if the hospital cannot predict the specific treatment or diagnostic code and is thus unable to provide a specific amount to be charged, the estimated maximum allowed amount or charge, including any facility fee;
2. the Medicare reimbursement amount;
3. for insured patients, (a) the allowed amount and (b) toll-free telephone number and website of the patient's health carrier where the patient can obtain information on charges and out-of-pocket costs;
4. The Joint Commission's composite accountability rating and the Medicare hospital compare star rating for the hospital, as applicable; and
5. the websites for The Joint Commission and the Medicare Hospital Compare tool where the patient may obtain information on the hospital.
The notice may be provided electronically or by mail.
If the patient is insured and the hospital is out-of-network, the notice must state that the diagnosis or procedure likely will be deemed out-of-network and applicable out-of-network rates may apply.
Plain Language on Notices, Bills, and Benefit Statements
The act requires providers and carriers to ensure that any notice, billing statement, or explanation of benefits they submit to a patient or insured is written in language an average reader can understand.
EFFECTIVE DATE: October 1, 2015
§ 4 – DISCLOSURE OF ALLOWED AMOUNTS AND RELATED INFORMATION
On and after January 1, 2016, the act prohibits contracts between providers and carriers from restricting the disclosure of (1) billed or allowed amounts, reimbursement rates, or out-of-pocket costs or (2) any data to the APCD for the purpose of helping consumers and institutional purchasers make informed decisions regarding their health care and informed choices among providers, and allowing comparisons between prices paid by various carriers to providers.
EFFECTIVE DATE: October 1, 2015
§ 5 – CARRIER COSTS, WEBSITE, AND INFORMATION
On and after July 1, 2016, the act requires each health carrier to maintain a website and toll-free telephone number that allow consumers to request and obtain information on in-network and out-of-network costs for health care procedures, services, and inpatient admissions.
The in-network information must include:
1. the allowed amount for at least the admissions and procedures reported to the exchange under the act, for each provider in the state;
2. the estimated out-of-pocket costs that the consumer would be responsible for paying for these admissions or procedures that are medically necessary; and
3. data or other information on (a) quality measures for the provider; (b) patient satisfaction, if this information is available; (c) a list of in-network providers; (d) whether a provider is accepting new patients; and (e) languages spoken by providers.
The act requires carriers to advise consumers, when providing information on out-of-pocket costs, that the amounts are estimates and the consumer's actual cost may vary due to (1) provider contractual changes, (2) the need for unforeseen services, or (3) other circumstances.
EFFECTIVE DATE: October 1, 2015
§ 6 – NOTICE WHEN PROVIDER STOPS ACCEPTING INSURER; PROVIDER DIRECTORY
The act requires providers to send written notice to the applicable carrier within 30 days after they stop accepting patients enrolled in an insurance plan.
It also requires carriers to update their provider directories, at least monthly.
EFFECTIVE DATE: October 1, 2015
§ 7 – CARRIERS TO PROVIDE CONSUMERS INFORMATION
The act requires health carriers to disclose specified information to consumers at enrollment and post the information on their websites. The carriers must disclose the following for each applicable health insurance policy, in an easily readable and understandable format:
1. any coverage exclusions;
2. any restrictions on the use or quantity of a covered benefit, including prescription drugs;
3. a description of the deductible and other out-of-pocket expenses that apply to prescription drugs; and
4. the applicable copayment and coinsurance percentage for each covered benefit, including each covered prescription drug.
In addition, the carriers must give consumers a way to accurately determine:
1. whether a prescription drug is covered under the policy's drug formulary (i. e. , list of covered drugs);
2. the coinsurance, copayment, deductible, or other out-of-pocket expense applicable to a prescription drug;
3. whether a prescription drug is covered when a physician or clinic dispenses it;
4. whether a prescription drug requires preauthorization or the use of step therapy (i. e. , a protocol establishing the sequence for prescribing drugs for a specific medical condition); and
5. whether specific health care providers, hospitals, or types of specialists are in the policy's provider network.
The act requires Access Health CT to post links on its website to the carriers' information for each qualified health plan offered or sold through the exchange. It also requires the insurance commissioner to post links on the Insurance Department's website to any online tools or calculators available to help consumers compare and evaluate health insurance policies and plans. By law, the department must already post certain tools on its website, including the annual Consumer Report Card on Health Insurance Carriers in Connecticut.
EFFECTIVE DATE: January 1, 2016
§ 8 – INSURANCE COMMISSIONER TO EVALUATE COMPLIANCE WITH THE AFFORDABLE CARE ACT
The act requires the insurance commissioner to, within available appropriations, (1) evaluate health insurers', HMOs', fraternal benefit societies', and hospital and medical service corporations' compliance with the federal Affordable Care Act (ACA) and (2) report her findings annually to the Insurance and Real Estate Committee on her findings. It requires the carriers to give the commissioner, upon request, the following information for a specific health insurance policy or plan:
1. the benefits covered under each category of the essential health benefits package, as defined by the U. S. Health and Human Services secretary;
2. any coverage exclusions or restrictions on covered benefits, including prescription drug benefits;
3. any prescription drug formulary used, the tier structure of the formulary (tiers generally relate to the applicable copayments), and a list of each covered prescription drug and its tier placement;
4. the applicable coinsurance, copayment, deductible, or other out-of-pocket expense for each covered benefit; and
5. any other information the commissioner deems necessary to evaluate the entity's ACA compliance.
By law, the commissioner may adopt regulations to implement these provisions.
EFFECTIVE DATE: July 1, 2016
§§ 9-12 – BILLS FOR EMERGENCY SERVICES, SURPRISE BILLS, AND UNFAIR BILLING PRACTICES
§ 9 – Emergency Services
The act prohibits health carriers from requiring prior authorization for emergency services. It also prohibits health carriers from charging an insured a coinsurance, copayment, deductible, or other out-of-pocket expense for emergency services performed by an out-of-network health care provider that is greater than that charged when performed by an in-network provider.
The act requires health carriers to reimburse out-of-network providers who perform emergency services for insureds the greatest of the: (1) amount the health care plan would pay if the services were rendered by an in-network provider; (2) usual, customary, and reasonable rate; or (3) amount Medicare reimburses for those services. A health carrier and an out-of-network provider may agree to a greater reimbursement amount. The health care provider may bill the carrier directly.
Under the act, “usual, customary, and reasonable rate” means the 80th percentile of all charges for the service performed by a health care provider in the same or similar specialty and provided in the same geographical area, as reported in a benchmarking database maintained by a nonprofit organization specified by the Insurance Commissioner. That organization must not be affiliated with a health carrier.
As used in this section, “health carriers” include health insurers, HMOs, fraternal benefit societies, hospital and medical service corporations, and other entities that issue health care plans in Connecticut. “Emergency services” are medical screenings to evaluate an emergency condition and examinations and treatment to stabilize the patient.
§§ 9 & 10 – Network Status Notification
The act requires each health carrier to tell a covered person or his or her health care professional, when the person or professional requests a prospective or concurrent benefit review:
1. the professional's network status under the person's health benefit plan;
2. the estimated amount the health carrier will reimburse the professional; and
3. how that amount compares to the usual, customary, and reasonable charge, as determined by the federal Center for Medicare and Medicaid Services.
Under the act, if an out-of-network provider renders services to an insured and the health carrier did not inform the insured of the provider's network status, the health carrier is prohibited from imposing a coinsurance, copayment, deductible, or other out-of-pocket expense that is more than what would be imposed if an in-network provider rendered services.
§§ 9 & 10 – Surprise Bills
Under the act, if an insured receives a surprise bill, the insured is only required to pay the coinsurance, copayment, deductible, or other out-of-pocket expense that would apply if the services had been rendered by an in-network provider. A health carrier must reimburse an out-of-network provider or insured, as applicable, for the services at the in-network rate under the plan as payment in full, unless the carrier and provider agree otherwise.
The act requires a health carrier to include a description of what constitutes a surprise bill (1) in the insurance policy, certificate of coverage, or handbook given to a covered person and (2) prominently on its website.
Under the act, a “surprise bill” is a bill for non-emergency health care services received by an insured for services rendered by an out-of-network provider at an in-network facility during a service or procedure that was performed by an in-network provider or previously approved by the health carrier, and the insured did not knowingly elect to receive the services from the out-of-network provider. A bill is not a surprise bill if an in-network provider is available but an insured knowingly elects to receive services from an out-of-network provider.
§§ 11 & 12 – Unfair Billing Practices by Health Care Providers
The act expands what constitutes an unfair trade practice by a health care provider (CUTPA, see BACKGROUND). Under prior law, it was an unfair trade practice for a health care provider to request payment from a managed care plan enrollee for covered services, except for a copayment or deductible.
The act instead makes it an unfair trade practice for a health care provider to request payment from a health care plan enrollee, except for a copayment, deductible, coinsurance, or other out-of-pocket expense, for:
1. covered health care services or facility fees,
2. covered emergency services rendered by an out-of-network provider, or
3. a surprise bill.
The act also makes it an unfair trade practice for a health care provider to report to a credit reporting agency an enrollee's failure to pay a bill for the above listed items when a health carrier has primary responsibility for paying. Under prior law, it was an unfair trade practice to report to a credit reporting agency an enrollee's failure to pay a bill for medical services that a managed care organization had primary responsibility for paying.
The act requires contracts between HMOs and participating providers to reflect what constitutes an unfair trade practice, as described above. It also makes technical and conforming changes.
EFFECTIVE DATE: July 1, 2016
§§ 13 & 14 – FACILITY FEES
Limits on Allowable Fees
By law, a “facility fee” is any fee a hospital or health system charges or bills for outpatient hospital services provided in a hospital-based facility that is (1) intended to compensate the hospital or health system for its operational expenses and (2) separate and distinct from the provider's professional fee.
On and after January 1, 2017, the act places certain limits on facility fees collected by hospitals, health systems, and hospital-based facilities. It prohibits them from collecting a facility fee for outpatient services that (1) use a current procedural terminology evaluation and management code and (2) are provided at a hospital-based facility, other than a hospital emergency department, that is not on a hospital campus. It prohibits them from collecting a facility fee from uninsured patients for outpatient services, other than those provided in off-site emergency departments, that exceeds the Medicare facility fee rate. A violation is an unfair trade practice.
If an insurance contract in effect on July 1, 2016 provides reimbursement for facility fees that are prohibited by these provisions, the hospital or health system may continue to collect reimbursement from insurers for these fees until the contract expires.
Billing Statement Notice
Beginning January 1, 2016, the act requires each billing statement that includes a facility fee to:
1. clearly identify the fee as a facility fee that is in addition to, or separate from, the provider's professional fee, if any;
2. provide the comparable Medicare facility fee reimbursement rate for the same service;
3. include a statement that the fee is intended to cover the hospital's or health system's operational expenses;
4. inform the patient that his or her financial liability might have been less if the services had been provided at a facility not owned or operated by the hospital or health system; and
5. include notice of the patient's right to request a reduction in the facility fee, or any portion of the bill, and a telephone number that the patient may use to make this request.
These requirements do not apply to billing statements for Medicare or Medicaid patients or those receiving services under a workers' compensation plan.
Notice of Transaction Resulting in Hospital-Based Facility; Stay on Collecting Facility Fees
Under the act, on and after January 1, 2016, if a transaction materially changes the business or corporate structure of a physician group practice and establishes a hospital-based facility at which facility fees will likely be billed, the hospital or health system purchasing the practice must notify each patient the practice served in the previous three years. The purchaser must send the notice by first class mail, within 30 days after the transaction.
The notice must include the following:
1. a statement that the purchased facility is now a hospital-based facility and is part of a hospital or health system;
2. the purchaser's name, business address, and telephone number;
3. a statement that the hospital-based facility bills, or is likely to bill, a facility fee that may be in addition to, and separate from, any provider professional fees;
4. a statement that the patient's actual financial liability will depend on the medical services provided him or her;
5. an explanation that the patient may incur greater financial liability than if the facility were not hospital-based;
6. the estimated facility fee amount or range of amounts the facility may bill or an example of the average facility fee it bills for its most common services; and
7. a statement that, before seeking services at the facility, an insured patient should contact his or her insurer for additional information on hospital-based facility fees, including any potential financial liability for the patient.
Some of these requirements are similar to existing notice requirements for facilities that already charge facility fees.
The purchaser also must provide a copy of this notice to OHCA, which must post a link to the notice on its website.
The act prohibits a hospital, health system, or hospital-based facility from collecting a facility fee for services provided at a purchased facility subject to these notice provisions from the transaction date until at least 30 days after the required notice is mailed to the patient or a copy is filed with OHCA, whichever is later. A violation is an unfair trade practice.
Form of Written Notices
Existing law sets certain notice requirements for hospitals or health systems that charge facility fees, and requires notices to patients to be in plain language and in a form reasonably understandable to someone without special knowledge of these fees. The act extends this requirement to the (1) billing statement notice and notices following certain group practice acquisitions as described above and (2) other existing notice requirements (such as required signs in waiting rooms about potentially greater financial liability due to facility fees, compared to facilities that are not hospital-based).
Beginning by July 1, 2016, the act requires each hospital and health system to annually report to the DPH commissioner on the facility fees it charged or billed the prior year at hospital-based facilities outside a hospital campus. The commissioner must publish the reported information or post a link to the information on OHCA's website.
Each report must include:
1. the name and location of each such facility that the hospital or health system owns or operates and that provides services for which a facility fee is charged or billed;
2. the number of patient visits at each such facility for which it charged or billed a facility fee;
3. the number, total amount, and range of allowable facility fees paid at each facility by Medicare, Medicaid, and private insurance policies;
4. the amount of the hospital's or health system's facility fee revenue from these facilities, per facility and in the aggregate;
5. a description of the 10 procedures or services that generated the most facility fee revenue and the total revenue derived from these fees for each such procedure or service; and
6. the top 10 procedures for which facility fees are charged, based on patient volume.
Insurance Copayments and Deductibles
The act prohibits health insurers and similar entities that reimburse a hospital, health system, or hospital-based facility for facility fees for outpatient services provided off-site from a hospital campus from imposing a separate copayment for these fees. If an insured person has not satisfied his or her deductible, the hospital, health system, or hospital-based facility may not collect from the person a facility fee exceeding the agreed-upon reimbursement rate under that contract.
These provisions apply to health insurers, HMOs, or other entities delivering, issuing, renewing, amending, or continuing individual or group health insurance policies or health benefit plans on or after January 1, 2016, that cover (1) basic hospital expenses; (2) basic medical-surgical expenses; (3) major medical expenses; and (4) hospital or medical services, including coverage under an HMO plan. The provisions apply to reimbursement agreements under contracts entered, renewed, or amended between these entities and a hospital, health system, or hospital-based facility on or after October 1, 2015. Due to the federal Employee Retirement Income Security Act (ERISA), state insurance benefit mandates do not apply to self-insured benefit plans.
EFFECTIVE DATE: October 1, 2015
§ 15 – PATIENT NOTIFICATION OF AFFILIATED PROVIDERS
The act requires health care providers to give patients written notice when referring them to an affiliated provider. The notification must (1) inform them that they are not required to see the affiliated provider and they have the right to seek care from the provider of their choice and (2) provide the website and toll-free telephone number of their health carrier to obtain information regarding in-network health care providers and estimated out-of-pocket costs for the referred services.
The act applies to providers referring patients to an affiliated provider who is not a member of the same partnership, professional corporation, or limited liability company as the referring provider. “Affiliated” means a relationship between two or more health care providers that permits them to negotiate, jointly or as members of a health care provider group, with third parties over rates for professional medical services.
The act exempts health care providers who provide a substantially similar notice pursuant to federal law.
EFFECTIVE DATE: October 1, 2015
§ 16 – TIERED NETWORKS
The act requires Access Health CT to (1) encourage health carriers to offer tiered network plans and (2) offer any such plans through the exchange. A tiered network plan has different cost-sharing rates for different health care provider tiers, and rewards enrollees with lower copayments, deductibles, or out-of-pocket expenses for choosing providers in certain tiers.
EFFECTIVE DATE: October 1, 2015
§§ 17 & 18 – HEALTH CARE CABINET
The act renames the 28-member “Sustinet Health Care Cabinet” the “Health Care Cabinet” to conform to current practice and adds to its duties studying health care cost containment models in other states. It also makes related technical and conforming changes.
By law, the cabinet is within the Office of the Lieutenant Governor and advises the governor on the development of an integrated health care system for Connecticut.
Health Cost Containment Model Study
The act requires the cabinet, within available appropriations, to study health care cost containment models in other states, including Maryland, Massachusetts, Oregon, Rhode Island, Vermont, and Washington. It must identify successful practices and programs that may be implemented in Connecticut to:
1. monitor and control health care costs,
2. enhance health care market competition,
3. promote the use of high-quality health care providers with low total medical expenses and prices,
4. improve health care cost and quality transparency,
5. increase cost effectiveness in the health care market, and
6. improve quality of care and health outcomes.
The cabinet must report to the legislature on the study by December 1, 2016. The report must include recommendations for administrative, regulatory, and policy changes that will provide a framework for:
1. monitoring and responding to health care cost growth on a provider and statewide basis that may include establishing statewide-, provider-, or service-specific benchmarks or limits;
2. identifying providers that exceed these benchmarks or limits; and
3. helping these providers meet the benchmarks or holding them accountable to such limits.
The recommendations must also include mechanisms to identify and mitigate factors contributing to health care price growth as well as price disparity between providers of similar services, including:
1. consolidation among providers of similar services,
2. vertical integration of providers of different services,
3. affiliations among providers that affect referral and utilization practices,
4. insurance contracting and reimbursement policies, and
5. government reimbursement policies and regulatory practices.
Additionally, the report must include recommendations on:
1. authority to implement and monitor delivery system reforms designed to promote value-based care and improved health outcomes;
2. developing and promoting insurance contracting standards and products that reward value-based care and promote the utilization of low-cost, high-quality providers; and
3. implementing other policies to (a) mitigate contributory factors to unnecessary health care cost growth and (b) promote high-quality, affordable care.
Under the act, any recommendations included in the report must, to the extent possible, (1) seek to limit any administrative burdens on providers and payers; (2) be consistent and integrated with existing regulatory practices; and (3) reduce or eliminate existing administrative, regulatory, and reporting requirements to improve the overall efficiency of the state's health care regulatory environment.
EFFECTIVE DATE: Upon passage, except the provisions making technical and conforming changes take effect July 1, 2015.
§ 19 – STUDY ON RISING HEALTH CARE COSTS
The act requires the insurance commissioner, within available appropriations, to convene a working group that includes the state comptroller, healthcare advocate, and public health commissioner. The working group must study rising health care costs, including:
1. increases in prices charged for health care services;
2. variation in provider charges;
3. the impact of these prices and variations on health insurance reimbursement rates; and
4. the impact of provider price variation on the state's health care spending as both a payer and provider of health care services, insurance premiums, and consumer out-of-pocket expenses.
Under the act, the state officials must examine:
1. policies to (a) enhance health care market competition, fairness, and cost-effectiveness and (b) reduce disparities in provider charges and insurance reimbursement rates and
2. variations in (a) provider charges within similar provider groups and for services of comparable acuity, quality, and complexity and (b) the volume of care provided by those with low and high levels of relative provider charges or health status adjusted total medical expenses.
Additionally, they must examine the correlation between:
1. provider charges and (a) quality of care; (b) patient acuity; (c) payer mix; (d) unique services provided, including specialty teaching and community services; and (e) providers' operational costs, including administrative and management costs;
2. for hospitals, their charges and status as disproportionate share hospitals, specialty hospitals, pediatric specialty hospitals, or academic teaching hospitals;
3. provider charges and market share, horizontal consolidation and vertical integration, and referral policies and patterns; and
4. facility fees and total medical spending, consumer out-of-pocket expenses, and price variation for services of comparable acuity, quality, and complexity.
The act authorizes the state officials to hold informational hearings, consult with the attorney general, and solicit information from, and the participation of, parties likely affected by its study. Such parties include hospitals with a high proportion of Medicaid and Medicare reimbursements, primary care providers, community health centers, health insurers, third-party administrators, employers, Health Care Cost Containment Committee representatives, and organizations representing consumers and the uninsured.
Under the act, the insurance commissioner may request relevant information and materials from health insurers, providers, or third-party administrators. Any information or materials they submit or disclose for the study are confidential and exempt from disclosure under the Freedom of Information Act (FOIA). But the act allows the state officials to disclose in the report data that (1) is not otherwise protected by law; (2) has identifying information removed; and (3) does not disclose the names of any health care provider, insurer, payer, or individual.
The insurance commissioner must report to the legislature by January 1, 2016 on the study findings and legislative recommendations to (1) reduce variation in provider prices, (2) promote the use of high-quality health care providers with low total medical expenses and prices, and (3) mitigate the impact of facility fees on consumer out-of-pocket expenses and total medical spending.
Under the act, these recommendations may include (1) expanding or modifying the limitations on facility fees; (2) establishing a reasonable maximum provider price variation limit and statewide median rate for certain services and procedures; and (3) implementing site-neutral payment policies for the state employee health plan, state-administered programs, and the commercial insurance market.
EFFECTIVE DATE: July 1, 2015
§ 20 – HEALTH INFORMATION ACCESS AND BLOCKING
The act provides that electronic health records, to the fullest extent practicable, must (1) follow and be accessible to the patient and (2) be shared and exchanged in a timely manner with providers of the patient's choice.
The act makes “health information blocking” an unfair trade practice, and specifies that a hospital, health system, or seller of electronic health record systems that engages in health information blocking is subject to certain civil penalties under the unfair trade practices law. It defines health information blocking as knowingly:
1. interfering with, or engaging in business practices or other conduct reasonably likely to interfere with, the ability of patients, providers, or other authorized persons to access, exchange, or use electronic health records or
2. using an electronic health record system to both (a) steer patient referrals to affiliated providers and (b) prevent or unreasonably interfere with referrals to non-affiliated providers.
Health information blocking does not include legitimate referrals between providers participating in an accountable care organization or similar value-based collaborative care model.
For this purpose, an affiliated provider is one that is:
1. employed by a hospital or health system,
2. under a professional services agreement with a hospital or health system that allows the hospital or health system to bill on the provider's behalf, or
3. a clinical faculty member of a medical school that is affiliated with a hospital or health system in a manner that allows the hospital or health system to bill on the faculty member's behalf.
A seller of electronic health record systems is any person or entity that directly, or indirectly through an employee, agent, independent contractor, vendor, or other person, sells, leases, or offers to sell or lease such a system or a license or right to use such a system.
The act also makes it an unfair trade practice for a seller of an electronic health record system to make a false, misleading, or deceptive representation that such a system is certified by the federal Office of the National Coordinator for Health Information Technology.
In addition, the act provides that (1) the attorney general must enforce these provisions and (2) these provisions must not be construed as limiting the power or authority of the state, the attorney general, or the consumer protection commissioner to seek administrative, legal, or equitable relief as provided by any state statute or the common law.
EFFECTIVE DATE: October 1, 2015
§§ 21 & 22 – STATEWIDE HEALTH INFORMATION EXCHANGE
§ 21 – Overview and Goals
The act establishes a Statewide Health Information Exchange, and gives DSS administrative authority over it. The exchange's purposes include (1) empowering consumers to make effective health care decisions; (2) promoting patient-centered care; (3) improving health care quality, safety, and value; (4) reducing waste and duplication of services; (5) supporting clinical decision-making; (6) keeping confidential health information secure; and (7) making progress toward the state's public health goals.
Under the act, the exchange's goals include:
1. allowing real-time, secure access to patient health information and complete medical records across all provider settings;
2. providing patients with secure electronic access to their health information, and allowing them to access their own health information free of charge;
3. supporting care coordination through real-time alerts and timely access to clinical information;
4. reducing costs associated with preventable readmissions, duplicative testing, and medical errors;
5. promoting the highest level of interoperability;
6. meeting all state and federal privacy and security requirements;
7. supporting public health reporting, quality improvement, academic research, and health care delivery and payment reform through data aggregation and analytics;
8. supporting population health analytics;
9. being standards-based; and
10. providing for broad local governance that (a) is committed to the exchange's successful development and implementation and (b) includes stakeholders, including representatives of DSS, hospitals, physicians, behavioral health providers, long-term care providers, health insurers, employers, patients, and academic or medical research institutions.
The act requires all contracts and agreements entered into by the state, or on the state's behalf, on health information technology or the exchange of health information to (1) be consistent with these goals and (2) use contractors, vendors, and other partners with a demonstrated commitment to them.
§ 21 – Request for Proposals (RFP)
Except as noted below, the act requires the DSS commissioner, in consultation with the Office of Policy and Management (OPM) secretary and the State Health Information Technology Advisory Council (see § 25), to develop and issue an RFP for the exchange's development, management, and operation. The commissioner must do so when the state bond commission approves legislatively authorized bond funds to establish the exchange.
Under the act, the RFP must promote the reuse of all enterprise health information technology assets, such as the existing Provider Directory, Enterprise Master Person Index, Direct Secure Messaging Health Information Service provider infrastructure, analytic capabilities, and tools that currently exist in, or are in the process of being deployed to, Connecticut.
The RFP may require an applying organization to have at least three years' experience operating a (1) statewide health information exchange in another state or (2) regional exchange serving a population of at least one million. This other exchange must:
1. enable the exchange of patient health information among providers, patients, and other authorized users regardless of location, payment source, or technology;
2. include behavioral health and substance abuse treatment information, with proper consent;
3. support transitions of care and care coordination through real-time provider alerts and access to clinical information;
4. allow health information to follow each patient and patients to access and manage their health data; and
5. have successfully reduced costs associated with preventable readmissions, duplicative testing, or medical errors.
The RFP may also require the organization to (1) have a high level of transparency in its governance, decision-making, and operations; (2) be able to provide consulting to ensure effective governance; (3) be regulated or administratively overseen by a state agency; and (4) have enough staff and appropriate expertise and experience to carry out the exchange's administrative, operational, and financial responsibilities.
Exception to RFP Requirement. The act establishes a procedure for the DSS commissioner to enter into a contract to establish the exchange without issuing an RFP. To do so, by January 1, 2016, he must submit a plan to the OPM secretary to establish an exchange consistent with the provisions noted above on its goals and purposes. He must submit the plan in consultation with the State Health Information Technology Advisory Council established by the act.
If the OPM secretary approves the plan, the commissioner may implement the plan and enter into a contract or agreement to do so.
§ 22 – Required Participation
Under the act, within a year after the exchange's launch, each licensed hospital and clinical laboratory must (1) maintain an electronic health record system capable of connecting to and participating in the exchange and (2) apply to begin the process of connecting to and participating in it.
Within two years after the exchange's launch, each licensed health care provider with such a system capable of connecting to and participating in the exchange must apply to begin the process to do so.
EFFECTIVE DATE: Upon passage
§§ 23, 26, & 41 – STATEWIDE HEALTH INFORMATION TECHNOLOGY PLAN AND RELATED DSS RESPONSIBILITIES
Statewide Health Information Technology Plan and Data Standards
By law, the DSS commissioner must implement and periodically revise the statewide health information technology plan. In doing so, prior law required him to consult with DPH and the Department of Mental Health and Addiction Services (DMHAS). The act instead requires him to consult with the State Health Information Technology Advisory Council established by the act (see § 25 below; council members include the DPH and DMHAS commissioners or their designees).
The act makes various changes to the required components of the plan. It broadens the plan's applicability by requiring the plan to include electronic data standards to facilitate the development of a statewide, integrated electronic health information system for state-licensed providers and institutions, instead of just state-funded providers and institutions as under prior law. The act specifies that these must be national data standards that support secure data exchange for this purpose.
It requires the plan to enhance interoperability to support optimal health outcomes. It removes from the definition of “interoperability” the specific condition that connected users be able to demonstrate appropriate permissions to participate in instant transactions over the network.
The act eliminates the requirement that the plan include pilot programs for health information exchange and the projected costs and sources of funding for these programs.
It retains more specific data standards set out in existing law for state-funded providers and institutions.
Uniform Standards for Human Services Agencies
Existing law requires the DSS commissioner to develop, throughout several state agencies, uniform (1) management and statistical information, (2) terminology for similar facilities, (3) electronic health information technology standards, and (4) regulations for the licensing of human services facilities. The act adds the Department of Veterans' Affairs to the list of such agencies.
Other DSS Duties
Within existing resources, the act requires the DSS commissioner, in consultation with the State Health Information Technology Advisory Council, to:
1. oversee the development and implementation of the Statewide Health Information Exchange;
2. coordinate the state's health information technology and health information exchange efforts to ensure consistent and collaborative cross-agency planning and implementation; and
3. serve as the state liaison to, and collaborate with, the Statewide Health Information Exchange to ensure consistency between the plan and the exchange and to support the state's health information technology and exchange goals.
The act also requires the DSS commissioner, in consultation with the advisory council, to annually report to the Human Services and Public Health committees, with the first report due February 1, 2016. He must report on:
1. the development and implementation of the statewide health information technology plan and data standards;
2. the establishment of the Statewide Health Information Exchange; and
3. recommendations for policy, regulatory, and legislative changes and other initiatives to promote the state's health information technology and exchange goals.
EFFECTIVE DATE: July 1, 2015, except a repealer and a conforming change are effective October 1, 2015.
§ 24 – HOSPITAL ELECTRONIC HEALTH RECORDS SYSTEMS
The act requires each licensed hospital, to the fullest extent practicable, to use its electronic health records system to enable bidirectional connectivity and the secure exchange of patient electronic health records between the hospital and any other licensed providers who:
1. have a system that can exchange these records, including at least laboratory and diagnostic tests, radiological and other diagnostic imaging, continuity of care documents, and discharge notifications and documents and
2. provide health care services to a patient whose records are being exchanged.
For this purpose, an exchange of records is secure if it complies with all state and federal privacy requirements, including HIPAA.
The act requires hospitals to use any hardware, software, bandwidth, or other program functions or settings already purchased or available to them to support this records and information exchange.
Under the act, a hospital is deemed to have satisfied these requirements if it connects to and actively participates in the Statewide Health Information Exchange.
The act specifies that the above provisions do not require a hospital to pay for any new or additional information technology, equipment, hardware, or software, including interfaces, when needed to enable this exchange.
The act also provides that a hospital's failure to take all reasonable steps to comply with these provisions constitutes evidence of health information blocking (see § 20).
EFFECTIVE DATE: October 1, 2015
§ 25 – STATE HEALTH INFORMATION TECHNOLOGY ADVISORY COUNCIL
The act creates a 28-member State Health Information Technology Advisory Council. The council's purpose is to advise the DSS commissioner on:
1. developing priorities and policy recommendations to advance the state's health information technology and health information exchange efforts and goals;
2. developing and implementing the statewide health information technology plan and standards and the Statewide Health Information Exchange; and
3. developing appropriate governance, oversight, and accountability measures to ensure success in achieving the state's health information technology and exchange goals.
The council also reviews and comments on certain DSS federal grant applications (see below).
Membership and Procedure
The council's membership includes the following individuals, or their designees:
1. the DSS, DMHAS, DPH, Children and Families, Correction, and Developmental Services commissioners;
2. the state's Chief Information Officer;
3. the Connecticut Health Insurance Exchange's chief executive officer;
4. the State Innovation Model Initiative program management office's director;
5. the UConn Health Center's chief information officer;
6. the Healthcare Advocate; and
7. the Senate president pro tempore, House speaker, and Senate and House minority leaders (their designees and appointees may be legislators).
The council also includes 13 appointed members, as shown in Table 1.
Table 1: Appointed Council Members
- a representative of a multi-hospital health system
- a representative of the health insurance industry
- an expert in health information technology
- a health care consumer or consumer advocate
- an employee or trustee of an employee benefit fund established under specified federal law (PA 15-242, § 59 specifies that this appointee may be a current or former employee or trustee)
Senate president pro tempore
- a representative of a federally qualified health center
- a behavioral health services provider
- a representative of an outpatient surgical facility
- a home health care services provider
Senate majority leader
- a representative of an independent community hospital
House majority leader
- a physician who provides services in a multispecialty group and who is not employed by a hospital
Senate minority leader
- a primary care physician who provides services in a small independent practice
House minority leader
- an expert in health care analytics and quality analysis
Under the act, all council appointments must be made by August 1, 2015. The council has two chairpersons: the DSS commissioner and one the council elects who is not a state official. The members' terms are coterminous with those of the appointing authority. The appropriate appointing authority fills any vacancies.
The DSS commissioner must schedule the first council meeting, to be held no later than September 1, 2015. The council must meet at least three times before January 1, 2016. A majority of the members constitutes a quorum.
The act provides that council members are not paid for their service, except for reimbursement for reasonable expenses incurred in performing their duties.
Review of DSS Federal Grant Applications
Under the act, before the DSS commissioner submits an application, proposal, planning document, or other request for federal grants, matching funds, or other federal support for health information technology or exchange, he must present the document to the council for review and comment.
EFFECTIVE DATE: July 1, 2015
§ 27 – HOSPITAL AFFILIATIONS AND GROUP MEDICAL PRACTICE TRANSACTIONS
Notification of Hospital Affiliations
The act requires the parties to a transaction that results in an affiliation between one hospital or hospital system and another hospital or hospital system to notify the attorney general in writing at least 30 days before the transaction takes effect. The notice must identify each party and describe the affiliation as of the notice date, including:
1. a description of the nature of the proposed relationship among the parties;
2. the names of the business entities that will provide services after the affiliation takes effect, including the addresses for each location where the services will be provided;
3. a description of the services to be provided at each location; and
4. the primary service area to be served by each location.
By law, an “affiliation” is a relationship between two or more entities that allows them to negotiate jointly with third parties over medical service rates.
Notification of Group Practice Transactions
By law, parties engaging in any transaction that materially changes a group practice must notify the attorney general in writing at least 30 days before the transaction's effective date. The notice must describe the material change in a similar manner as required for hospital affiliations described above. The act requires the (1) parties to also notify the DPH commissioner in the same manner and (2) commissioner to post a link to the notice on the department's website.
Starting by December 31, 2015, the act requires each hospital and hospital system to annually file a written report with the attorney general and DPH commissioner describing its affiliation with any other hospital or hospital system. The report must include:
1. the names and addresses of each party to the affiliation;
2. a description of the nature of the relationship among the parties;
3. the names of the business entities that provide services as part of the affiliation, including the addresses for each location where services are provided;
4. a description of the services provided at each location; and
5. the primary service area to be served by each location.
Existing law already requires hospitals and hospital systems with affiliated group practices, and unaffiliated group practices of 30 or more physicians, to report annually to the attorney general and DPH commissioner in a similar manner.
EFFECTIVE DATE: October 1, 2015
§ 28 – CERTIFICATE OF NEED (CON) AND MEDICAID COST EFFECTIVENESS
Under the CON law, health care facilities must generally receive OHCA's approval when (1) establishing new facilities or services, (2) changing ownership, (3) acquiring certain equipment, or (4) terminating certain services.
By law, one factor OHCA must consider when evaluating a CON application is whether the applicant has satisfactorily shown how the proposal will improve the quality, accessibility, and cost effectiveness of health care delivery in the region. The act eliminates a requirement for this to include the impact on the cost effectiveness of providing access to Medicaid services.
EFFECTIVE DATE: July 1, 2015
§§ 28, 30-32, & 35 – CERTIFICATE OF NEED FOR HOSPITAL SALES
By law, hospital transfers of ownership are subject to CON review by OHCA. Transfers of non-profit hospitals to for-profit purchasers (i. e. , “hospital conversions”) are subject to an enhanced review process, requiring approval from both DPH and the attorney general. To start the conversion process, the parties must submit a CON determination letter, and to approve a conversion, the DPH commissioner must determine, among other things, that the transaction is justified under the CON law.
The act creates additional requirements for applications or determination letters filed after December 1, 2015 seeking CON approval to transfer ownership of a hospital (hereinafter, “hospital ownership transfer”).
EFFECTIVE DATE: July 1, 2015
§§ 28 & 32 – Review Factors
The act adds to the factors that OHCA must consider when reviewing a CON application for a hospital ownership transfer, regardless of whether it is a hospital conversion. In addition to the existing factors, it requires OHCA to consider and make written findings on whether the:
1. applicant fairly considered alternative proposals or offers in light of maintaining provider diversity and consumer choice and access to affordable quality care for the “affected community” (i. e. , a municipality where the hospital is located or whose inhabitants are regularly served by the hospital) and
2. service delivery plan the applicant submitted (see § 30 below) shows, in a manner consistent with the OHCA statutes, how the new hospital will provide health care services for the first three years after the ownership transfer, including any new services or consolidation, reduction, elimination, or expansion of existing services.
Prior law required the DPH commissioner to deny a hospital conversion application unless she found, among other things, that the affected community would be assured of continued access to high quality affordable health care after accounting for any proposed change affecting hospital staffing. The act instead requires OHCA to deny a CON application for any hospital ownership transfer (not just a conversion) unless the commissioner makes this finding.
The act also allows OHCA to deny a CON application for a hospital ownership transfer subject to a cost and market impact review (see below) if the commissioner finds that:
1. the affected community will not be assured of continued access to high quality affordable care after accounting for any consolidation in the hospital and health care market that may reduce provider diversity, consumer choice, and access to care and
2. any likely increases in the prices for health care or total health care spending in the state may negatively impact care affordability.
§§ 28 & 35 – Conditions on Approval
The act allows OHCA to place conditions on the approval of a CON application involving a hospital ownership transfer, consistent with the OHCA law. Before doing so, OHCA must weigh the conditions' value in promoting the law's purposes against the conditions' individual and cumulative burden on the parties and the “new hospital” (the hospital after the ownership transfer). Each condition must be reasonably tailored in time and scope.
1. requires OHCA to include a concise statement of the legal and factual basis for each condition and refer to the provision it is intended to promote and
2. gives the parties or the new hospital the right to request from OHCA an amendment to, or relief from, any condition based on changed circumstances, hardship, or other good cause.
By law, the DPH commissioner and attorney general, when approving an application under the hospital conversion law, may place any conditions on their approval that relate to the law's purposes. The act specifies that any such conditions may be in addition to any set by OHCA under the CON law. It also requires any conditions the commissioner imposes under the conversion law to meet the act's guidelines and above criteria that apply to conditions under the CON law.
§ 30 – Additional Information with Application
For CON applications involving hospital ownership transfers as described above, the act requires the applicant to submit a plan demonstrating how the new hospital will provide health care services for the first three years after the ownership transfer, including any new services or consolidation, reduction, elimination, or expansion of existing services.
The act also requires the applicant to submit, for both the hospital and purchaser:
1. the names of their current officers, directors, board members, and senior managers (regardless of whether they will hold a position at the hospital after the transaction) and
2. any salary, severance, stock offering, or other current or deferred financial gain these individuals are expected to receive due to the transaction or in relation to it.
If the applicant fails to submit any such information within 60 days of OHCA's request, OHCA must consider the application withdrawn.
§§ 30 & 31 – Public Hearing Requirement
For most CON applications, existing law requires OHCA to hold a public hearing on written request of three or more people or an individual representing an entity with five or more people; otherwise, OHCA has discretion on whether to hold a hearing. For CON applications seeking a hospital ownership transfer, the act instead makes a public hearing mandatory. The hearing must be held in the municipality where the hospital is located.
For hospital conversions, existing law requires the purchaser and hospital to hold a hearing on the CON determination letter that they must submit to begin the review process. Under the act, a public hearing OHCA holds on the CON application satisfies this requirement. By law, the attorney general and DPH commissioner must also hold an additional public hearing later in the process (CGS § 19a-486e).
§ 28 – POST-TRANSFER COMPLIANCE REPORTER
Under the act, if OHCA approves a CON for certain hospital ownership transfers, it must hire an independent consultant to serve as a post-transfer compliance reporter for three years following completion of the transfer. OHCA must do this if the (1) CON determination letter or application is filed after December 1, 2015 and (2) purchaser is an in- or out-of-state hospital or a hospital system that (a) had net patient revenue exceeding $1. 5 billion for fiscal year 2013 or (b) is organized or operated for profit.
The reporter must, at least quarterly:
1. meet with representatives of the purchaser, new hospital, and members of the affected community and
2. report to OHCA on (a) the purchaser's and new hospital representative's efforts to comply with any conditions OHCA placed on the CON approval and its plans for future compliance and (b) community benefits and uncompensated care the new hospital provided.
The act requires the purchaser to provide the reporter access to its records and facilities so that the reporter may carry out his or her duties.
The act requires the purchaser to hold a public hearing at least annually during the reporting period in the municipality where the new hospital is located to allow the public to review and comment on the reporter's reports and findings.
Performance Improvement Plan
If the reporter determines that the purchaser has breached a condition of the CON approval, the act allows OHCA to implement a performance improvement plan to (1) remedy the conditions the reporter identifies and (2) extend the reporting period for up to one year after OHCA determines that these conditions have been resolved.
The office must implement the plan in consultation with the purchaser, reporter, and other interested parties it deems appropriate.
The act requires the purchaser to pay the cost of hiring the reporter in an amount OHCA determines, up to $200,000 annually.
EFFECTIVE DATE: July 1, 2015
§§ 29 & 35 – COST AND MARKET IMPACT REVIEW
The act requires OHCA to conduct a cost and market impact review (CMIR) of CON applications that propose to transfer a hospital's ownership, if the purchaser is (1) an in- or out-of-state hospital or a hospital system that had net patient revenue exceeding $1. 5 billion for fiscal year 2013 or (2) organized or operated for profit.
The act requires OHCA to initiate a CMIR by notifying the transacting parties within 21 days after receiving a properly filed CON application. The notice must include a (1) description of the basis for the CMIR and (2) request for information and documents.
Within 30 days after receiving the notice, the transacting parties must submit a written response to OHCA that includes any information or documents OHCA requested concerning the ownership transfer.
The act allows OHCA to conduct any inquiry, investigation, or hearing needed to complete a CMIR. This includes issuing subpoenas; requiring the production of books, records or documents; administering oaths; and taking testimony under oath. If a person disobeys a subpoena or refuses to answer a pertinent question or produce a requested document, the DPH commissioner or her agent may apply to Superior Court for compliance.
Under the act, all nonpublic information and documents OHCA obtains while conducting the CMIR are confidential and exempt from disclosure under FOIA. OHCA cannot disclose the information or documents without the consent of the person who produced them, except in a preliminary or final report if OHCA:
1. believes disclosure is in the public interest and
2. takes into account privacy, trade secret, or anti-competitive considerations.
The act requires the CMIR to examine factors related to the transacting parties' businesses and relative market positions, including such things as the transacting parties':
1. size and market share within their (a) primary service areas, by major service category and (b) dispersed service areas;
2. prices for services, including their relative prices compared to other health care providers for the same services in the same market;
3. health status adjusted total medical expense, including a comparison to similar health care providers;
4. service quality, including patient experience;
5. cost and cost trends compared to statewide total health care expenditures;
6. methods used to attract patient volume and recruit or acquire health care professionals or facilities;
7. individual roles in serving at-risk, underserved, and government-payer populations, including those with behavioral, substance use disorder, and mental health conditions within their primary and dispersed service areas; and
8. individual roles in providing low or negative margin services within their primary and dispersed service areas.
The CMIR must also examine:
1. availability and accessibility of services similar to those each transacting party provides, or proposes to provide, within their primary and dispersed service areas;
2. the proposed ownership transfer's impact on competing options for health care services delivery in each transacting party's primary and dispersed service areas, including the impact on existing providers;
3. consumer concerns, including complaints or other allegations that a transacting party engaged in unfair methods of competition or unfair or deceptive acts or practices; and
4. any other factors OHCA determines to be in the public interest.
The act requires OHCA to make factual findings and issue a preliminary CMIR report (1) within 90 days after it determines that the transacting parties substantially complied with any request for information or documents or (2) by a later date mutually agreed to by OHCA and the transacting parties.
The preliminary report must at least indicate whether a transacting party currently or, after the proposed ownership transfer, will likely:
1. have a dominant market share for the services it provides and
2. (a) charge prices for services that are materially higher than the median prices charged by all other providers of the same services in the same market or (b) has a health status adjusted total medical expense that is materially higher than the median total medical expense for all other providers of the same service in the same market.
The act permits the transacting parties to respond in writing to the preliminary report within 30 days after it is issued.
The act requires OHCA to issue its final CMIR within 60 days after issuing the preliminary report. OHCA must refer the final report to the attorney general if the proposed ownership transfer meets the preliminary report criteria on market share, cost, and expense listed above. The attorney general may then investigate whether the transacting parties engaged in or, after the proposed ownership transfer, are expected to engage in (1) unfair methods of competition, (2) anti-competitive behavior, or (3) other conduct that violates CUTPA or any other state or federal law.
The attorney general may take appropriate legal action to protect consumers in the health care market. Under the act, the final report may be evidence in any such action.
The act subjects the transacting parties to direct enforcement of CUTPA by the attorney general. It specifies that it does not modify, impair, or supersede any state antitrust law or limit the attorney general's authority to (1) take any legally authorized action against a transacting party or (2) protect health care market consumers under any law.
Prohibition on Ownership Transfers
The act specifies that the CMIR requirements cannot prohibit a hospital ownership transfer, but the proposed transfer must not be completed:
1. less than 30 days after OHCA issues a final CMIR report, if the CMIR is required or
2. before the court issues a final judgment on any pending legal action brought by the attorney general relating to unfair trade practices, antitrust, or unfair competition.
Hospital Conversion Decision Timeframe
By law, the attorney general and DPH commissioner must decide on a hospital conversion application within 120 days after it is complete, unless the deadline is extended by mutual agreement or tolled for certain legal action. The act also allows the commissioner to extend the deadline for an additional 120 days pending completion of the CMIR.
The act requires OHCA to hire an independent consultant to conduct the CMIR. The consultant must have expertise in the economic analysis of the health care market and health care costs and prices. OHCA must submit the bills for the consultant's services to the hospital purchaser who must pay the bills, up to $200,000 per application, within 30 days after receiving them.
The act specifies that any agreement executed for independent consultant services is not subject to state laws on (1) the department of administrative services, (2) consultant and personal service agreements, and (3) methods for awarding state contracts.
Additionally, it prohibits an OHCA employee who directly oversees or assists in conducting a CMIR from participating in factual deliberations or issuing a preliminary or final decision on a CON application for a hospital ownership transfer that is the subject of the CMIR.
The act requires the DPH commissioner to adopt regulations on CMIRs including definitions of (1) “dispersed service area,” (2) “health status adjusted total medical expense,” (3) “major service category,” (4) “relative prices,” (5) “total health care spending,” and (6) “health care services. ”
The commissioner may implement policies and procedures while adopting them in regulation, if she publishes notice on the DPH website and eRegulations system within 20 days after implementation. The policies and procedures are valid until the regulations take effect.
EFFECTIVE DATE: July 1, 2015
§ 34 – DPH REPORT ON CON REQUIREMENTS
The act requires the DPH commissioner, by January 1, 2016 and within available appropriations, to report to the Public Health Committee on OHCA's CON requirements for health care facilities. The report must include recommendations to eliminate CON approval requirements or create an expedited approval process for certain services, equipment purchases, ownership transfers, or other matters that currently require CON approval, including:
1. ancillary capital spending not related to direct patient care or services;
2. replacing outdated or damaged equipment that was originally purchased with OHCA's approval;
3. repairing facilities damaged by floods, storms, or other unexpected occurrences; and
4. facility improvements needed to comply with building codes or other legal requirements.
Additionally, the report must include recommendations on an expedited automatic approval of certain CON applications if OHCA fails to notify the applicant within 30 days of its intent to review the application.
EFFECTIVE DATE: July 1, 2015
§ 38 – STUDY ON FINANCING OPTIONS FOR HOSPITAL IMPROVEMENTS
The act requires the chairperson of the Connecticut Health and Education Facilities Authority (CHEFA) board, in consultation with the economic and community development commissioner and OHCA, to study financing options for community hospitals to purchase medical equipment; update information technology; renovate, purchase, or build new health care facilities; and engage in other activities to:
1. improve community hospitals' ability to effectively serve the community, including (a) enhancing care coordination, (b) advancing integrated health services, (c) promoting evidence-based care practices and efficient health care delivery, and (d) providing culturally and linguistically appropriate services to the community;
2. advance hospitals' adoption of health information technology, including interoperable electronic health records systems and clinical support tools;
3. help hospitals and other providers to electronically exchange health information to ensure continuity of care among all providers;
4. support infrastructure investments in health care facilities necessary for (a) transitioning to alternative payment methods, including investments in data analysis functions and performance management programs to promote price transparency for health care services and (b) aggregating and analyzing clinical data to facilitate appropriate, evidence-based intervention and care management practices, especially for vulnerable populations and people with complex health care needs;
5. improve health care affordability and quality by increasing coordination among hospitals and community-based providers and organizations;
6. improve access to health care services, including behavioral health services; and
7. ensure staff-to-patient ratios are sufficient to deliver high quality health care.
The CHEFA chairperson must report by January 1, 2016 to the Public Health and Commerce committees on the study. The report must include a capital needs assessment for community hospitals (to the extent possible) and recommendations on:
1. financing methods for improvements currently needed by Connecticut community hospitals to fulfill the purposes listed above, including (a) using bond funds and alternative funding methods and (b) establishing a program that provides low- or no-interest loans to community hospitals;
2. other state programs that may be used to support community hospital improvements; and
3. legislative or regulatory changes needed to enable community hospitals to make the improvements listed above.
Under the act, a “community hospital” means a hospital that (1) is not a teaching hospital and has 25 or fewer full-time equivalent interns or residents for every 100 inpatient beds; (2) charges less than the state median price for services; (3) is nonprofit; and (4) is not part of a hospital system.
EFFECTIVE DATE: Upon passage
§§ 28, 30, 36, & 37 – CON FOR LARGE GROUP PRACTICE SALES
Existing law requires a CON for certain ownership transfers of group practices of eight or more full-time equivalent physicians. For such transfers, when an offer responds to a request for proposal or similar voluntary offer for sale, there are certain variations from the general CON process (e. g. , a presumption of approval for the application).
The act labels this group of eight or more physicians as a “large group practice” and expands which ownership transfers are subject to the CON requirement. Prior law exempted transfers to a physician or group of physicians. Under the act, the exemption for transfers to a physician group only applies if the physicians in that group are legally organized in a partnership, professional corporation, or limited liability company formed to render professional services and are not employed by or an affiliate of a hospital, medical foundation, insurance company, or similar entity.
EFFECTIVE DATE: July 1, 2015
§§ 33 & 40 – HOSPITAL AND HEALTH SYSTEM ANNUAL REPORTING
Under existing law, general and children's hospitals must annually report certain information to OHCA. Among other things, this includes:
1. salaries and fringe benefits for the 10 highest paid positions and
2. salaries paid to hospital employees by each joint venture, partnership, subsidiary, and corporation related to the hospital.
The act requires hospitals to also report this information for health system employees. For this purpose, a health system is a business entity consisting of a parent corporation of one or more hospitals affiliated through governance, membership, or other means.
For general or children's hospitals that are parties to an ownership transfer approved under the CON law, the act requires the hospital to report information on financial gain by certain individuals as part of its annual report to OHCA in the year before the transaction's approval. The report must include financial gain realized by the hospital's officers, directors, board members, and senior managers as a result of the transaction.
Existing law requires all hospitals not subject to the above reporting requirement to annually file with OHCA their audited financial statements. The act allows a health system to submit one report with the audited financial statements for all of its hospitals. For this purpose, a health system is (1) a parent corporation of one or more hospitals and any entity affiliated with that corporation through ownership, governance, membership, or other means, or (2) a hospital and any entity affiliated with the hospital through any such means.
PA 15-242, § 70, contains a similar provision allowing health systems to file one report with the audited financial statements for all of its hospitals.
EFFECTIVE DATE: July 1, 2015
§ 39 – CON EXEMPTION FOR CERTAIN SCANNERS
The act eliminates the CON requirement for the acquisition of certain types of scanners if they are replacements for scanners previously approved through the CON process. This applies to MRI, CT, PET, and PET/CT scanners.
EFFECTIVE DATE: July 1, 2015
The Joint Commission is an independent, nonprofit organization that accredits and certifies many categories of health care organizations and programs in the United States.
Connecticut Unfair Trade Practices Act (CUTPA)
CUTPA prohibits businesses from engaging in unfair and deceptive acts or practices. It allows the consumer protection commissioner to issue regulations defining what constitutes an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $5,000 (effective October 1, 2015, PA 15-60 increases this amount to $10,000), enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance. It also allows individuals to sue. Courts may issue restraining orders; award actual and punitive damages, costs, and reasonable attorney's fees; and impose civil penalties of up to $5,000 for willful violations and $25,000 for violation of a restraining order.
OLR Tracking: JO: LH: PF: cmg