OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sSB-351

AN ACT CONCERNING MATTERS AFFECTING PHYSICIANS AND HOSPITALS.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

UConn Health Ctr.

General and Clinical Funds – Cost/Revenue Loss

Significant

Significant

Social Services, Dept.

GF - Cost

See Below

See Below

Note: GF=General Fund

Municipal Impact: None

Explanation

Section 1 of the bill results in a potential significant cost and revenue loss to the University of Connecticut Health Center (UCHC) by setting limits on physician non-compete agreements. Non-compete agreements are used to protect initial investments, and ensure that physicians do not leave the institution to develop or join competing practices close by once they are acclimated to the area and have developed a patient base. Limiting such agreements would require the UCHC to provide greater inducements for physicians to remain with the UCHC. Additionally the UCHC could lose significant clinical revenue if patients follow physicians to their new practices.

Section 9 will result in a cost to the Department of Social Services (DSS) due to requiring, rather than allowing, the department to implement a plan for the procurement of a State-wide Health Information Exchange. Under current law, plan implementation can be accomplished without procurement. The actual fiscal impact of the bill's provisions is dependent on the cost of the contract.

The Out Years

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