Connecticut Seal

General Assembly

File No. 610

    January Session, 2017

Substitute Senate Bill No. 451

Senate, April 13, 2017

The Committee on Public Health reported through SEN. GERRATANA of the 6th Dist. and SEN. SOMERS of the 18th Dist., Chairpersons of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT PROTECTING PATIENTS FROM UNREASONABLE MEDICAL BILLS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 19a-508c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(a) As used in this section:

(1) "Affiliated provider" means a provider that is: (A) Employed by a hospital or health system, (B) under a professional services agreement with a hospital or health system that permits such hospital or health system to bill on behalf of such provider, or (C) a clinical faculty member of a medical school, as defined in section 33-182aa, that is affiliated with a hospital or health system in a manner that permits such hospital or health system to bill on behalf of such clinical faculty member;

(2) "Campus" means: (A) The physical area immediately adjacent to a hospital's main buildings and other areas and structures that are not strictly contiguous to the main buildings but are located within two hundred fifty yards of the main buildings, or (B) any other area that has been determined on an individual case basis by the Centers for Medicare and Medicaid Services to be part of a hospital's campus;

(3) "Facility fee" means any fee charged or billed by a hospital or health system for outpatient [hospital] services provided in a hospital-based facility that is: (A) Intended to compensate the hospital or health system for the operational expenses of the hospital or health system, and (B) separate and distinct from a professional fee;

(4) "Health system" means: (A) A parent corporation of one or more hospitals and any entity affiliated with such parent corporation through ownership, governance, membership or other means, or (B) a hospital and any entity affiliated with such hospital through ownership, governance, membership or other means;

(5) "Hospital" has the same meaning as provided in section 19a-490;

(6) "Hospital-based facility" means a facility [that is owned or operated, in whole or in part, by a hospital or health system where hospital] or office where professional medical services are provided and a hospital or health system bills for or receives compensation for such services;

(7) "Professional fee" means any fee charged or billed by a provider for professional medical services provided in a hospital-based facility; and

(8) "Provider" means an individual, entity, corporation or health care provider, whether for profit or nonprofit, whose primary purpose is to provide professional medical services.

(b) If a hospital or health system charges a facility fee (1) utilizing a current procedural terminology evaluation and management (CPT E/M) code for outpatient services provided at a hospital-based facility, [where a professional fee is also expected to be charged] or (2) for any outpatient services provided at a hospital-based facility located off-site from the hospital campus, the hospital or health system shall provide the patient with a written notice that includes the following information:

[(1)] (A) That the hospital-based facility is part of a hospital or health system and that the hospital or health system charges a facility fee that is in addition to and separate from the professional fee charged by the provider;

[(2) (A)] (B) (i) The amount of the patient's potential financial liability, including any facility fee likely to be charged, and [, where professional medical services are provided by an affiliated provider,] any professional fee likely to be charged, or, if the exact type and extent of the professional medical services needed are not known or the terms of a patient's health insurance coverage are not known with reasonable certainty, an estimate of the patient's financial liability based on typical or average charges for visits to the hospital-based facility, including the facility fee, [(B)] provided if a range is given for the facility fee likely to be charged, the high number in the range shall be no greater than one hundred fifty per cent of the low number in the range, (ii) a statement that the patient's actual financial liability will depend on the professional medical services actually provided to the patient, and [(C)] (iii) an explanation that the patient may incur financial liability that is greater than the patient would incur if the professional medical services were not provided by a hospital-based facility; and

[(3)] (C) That a patient covered by a health insurance policy should contact the health insurer for additional information regarding the hospital's or health system's charges and fees, including the patient's potential financial liability, if any, for such charges and fees.

[(c) If a hospital or health system charges a facility fee without utilizing a current procedural terminology evaluation and management (CPT E/M) code for outpatient services provided at a hospital-based facility, located outside the hospital campus, the hospital or health system shall provide the patient with a written notice that includes the following information:

(1) That the hospital-based facility is part of a hospital or health system and that the hospital or health system charges a facility fee that may be in addition to and separate from the professional fee charged by a provider;

(2) (A) A statement that the patient's actual financial liability will depend on the professional medical services actually provided to the patient, and (B) an explanation that the patient may incur financial liability that is greater than the patient would incur if the hospital-based facility was not hospital-based; and

(3) That a patient covered by a health insurance policy should contact the health insurer for additional information regarding the hospital's or health system's charges and fees, including the patient's potential financial liability, if any, for such charges and fees.]

(c) Prior to the provision of any nonemergency medical services for which a hospital or hospital system charges a facility fee, the hospital or hospital system shall obtain the patient's express, written acknowledgment of his or her receipt of the notice required under subsection (b) of this section.

(d) If the hospital or hospital system fails to provide a patient with the notice required under subsection (b) of this section, the hospital or health system may not bill the patient for any facility fee associated with the services provided to the patient. A violation of the provisions of this subsection shall be considered an unfair trade practice pursuant to section 42-110b.

[(d)] (e) On and after January 1, 2016, each initial billing statement that includes a facility fee shall: (1) Clearly identify the fee as a facility fee that is billed in addition to, or separately from, any professional fee billed by the provider; (2) provide the corresponding Medicare facility fee reimbursement rate for the same service as a comparison or, if there is no corresponding Medicare facility fee for such service, (A) the approximate amount Medicare would have paid the hospital for the facility fee on the billing statement, or (B) the percentage of the hospital's charges that Medicare would have paid the hospital for the facility fee; (3) include a statement that the facility fee is intended to cover the hospital's or health system's operational expenses; (4) inform the patient that the patient's financial liability may 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 written notice of the patient's right to request a reduction in the facility fee or any other portion of the bill and a telephone number that the patient may use to request such a reduction without regard to whether such patient qualifies for, or is likely to be granted, any reduction.

[(e)] (f) The written notice described in subsections (b), [to (d), inclusive, (h) to (j)] (e) and (i) to (k), inclusive, of this section shall be in plain language and in a form that may be reasonably understood by a patient who does not possess special knowledge regarding hospital or health system facility fee charges.

[(f)] (g) (1) For nonemergency care, if a patient's appointment is scheduled to occur [ten] seven or more days after the appointment is made, such written notice shall be sent to the patient by first class mail, encrypted electronic mail or a secure patient Internet portal not less than three days after the appointment is made. If an appointment is scheduled to occur less than [ten] seven days after the appointment is made or if the patient arrives without an appointment, such notice shall be hand-delivered to the patient when the patient arrives at the hospital-based facility.

(2) For emergency care, such written notice shall be provided to the patient as soon as practicable after the patient is stabilized in accordance with the federal Emergency Medical Treatment and Active Labor Act, 42 USC 1395dd, as amended from time to time, or is determined not to have an emergency medical condition and before the patient leaves the hospital-based facility. If the patient is unconscious, under great duress or for any other reason unable to read the notice and understand and act on his or her rights, the notice shall be provided to the patient's representative as soon as practicable.

[(g)] (h) Subsections (b) to [(f)] (g), inclusive, and [(k)] (l) of this section shall not apply if a patient is insured by Medicare or Medicaid or is receiving services under a workers' compensation plan established to provide medical services pursuant to chapter 568.

[(h)] (i) A hospital-based facility shall prominently display written notice in locations that are readily accessible to and visible by patients, including patient waiting areas, stating that: (1) The hospital-based facility is part of a hospital or health system, and (2) if the hospital-based facility charges a facility fee, the patient may incur a financial liability greater than the patient would incur if the hospital-based facility was not hospital-based.

[(i)] (j) A hospital-based facility shall clearly hold itself out to the public and payers as being hospital-based, including, at a minimum, by stating the name of the hospital or health system in its signage, marketing materials, Internet web sites and stationery.

[(j)] (k) (1) [On and after January 1, 2016, if] If any transaction, as described in subsection (c) of section 19a-486i, results in the establishment of a hospital-based facility at which facility fees will likely be billed, the hospital or health system, that is the purchaser in such transaction shall, not later than thirty days after such transaction, provide written notice, by first class mail, of the transaction to each patient served within the previous three years by the health care facility that has been purchased as part of such transaction.

(2) Such notice shall include the following information:

(A) A statement that the health care facility is now a hospital-based facility and is part of a hospital or health system;

(B) The name, business address and phone number of the hospital or health system that is the purchaser of the health care facility;

(C) A statement that the hospital-based facility bills, or is likely to bill, patients a facility fee that may be in addition to, and separate from, any professional fee billed by a health care provider at the hospital-based facility;

(D) (i) A statement that the patient's actual financial liability will depend on the professional medical services actually provided to the patient, and (ii) an explanation that the patient may incur financial liability that is greater than the patient would incur if the hospital-based facility were not a hospital-based facility;

(E) The estimated amount or range of amounts the hospital-based facility may bill for a facility fee or an example of the average facility fee billed at such hospital-based facility for the most common services provided at such hospital-based facility; and

(F) A statement that, prior to seeking services at such hospital-based facility, a patient covered by a health insurance policy should contact the patient's health insurer for additional information regarding the hospital-based facility fees, including the patient's potential financial liability, if any, for such fees.

(3) A copy of the written notice provided to patients in accordance with this subsection shall be filed with the Office of Health Care Access. Said office shall post a link to such notice on its Internet web site.

(4) A hospital, health system or hospital-based facility shall not collect a facility fee for services provided at a hospital-based facility that is subject to the provisions of this subsection from the date of the transaction until at least thirty days after the written notice required pursuant to this subsection is mailed to the patient or a copy of such notice is filed with the Office of Health Care Access, whichever is later. A violation of this subsection shall be considered an unfair trade practice pursuant to section 42-110b.

[(k)] (l) Notwithstanding the provisions of this section, [on and after January 1, 2017,] no hospital, health system or hospital-based facility shall collect a facility fee for (1) outpatient health care services that use a current procedural terminology evaluation and management (CPT E/M) code and are provided at a hospital-based facility located off-site from a hospital campus, other than a hospital emergency department, [located off-site from a hospital campus] operated as a provider-based entity, as defined in 42 CFR 413.65, that is authorized under Medicare rules to bill for emergency procedures, or (2) outpatient health care services, other than those provided in an emergency department located off-site from a hospital campus, and operated as a provider-based entity, as defined in 42 CFR 413.65, that is authorized under Medicare rules to bill for emergency procedures, received by a patient who is uninsured of more than the Medicare rate. Notwithstanding the provisions of this subsection, in circumstances when an insurance contract that is in effect on July 1, 2016, provides reimbursement for facility fees prohibited under the provisions of this section, a hospital or health system may continue to collect reimbursement from the health insurer for such facility fees until the date of expiration of such contract. A violation of this subsection shall be considered an unfair trade practice pursuant to chapter 735a.

[(l)] (m) (1) Each hospital and health system shall report not later than July 1, 2016, and annually thereafter to the Commissioner of Public Health concerning facility fees charged or billed during the preceding calendar year. Such report shall include (A) the name and location of each facility owned or operated by the hospital or health system that provides services for which a facility fee is charged or billed, (B) the number of patient visits at each such facility for which a facility fee was charged or billed, (C) the number, total amount and range of allowable facility fees paid at each such facility by Medicare, Medicaid or under private insurance policies, (D) for each facility, the total amount of revenue received by the hospital or health system derived from facility fees, (E) the total amount of revenue received by the hospital or health system from all facilities derived from facility fees, (F) a description of the ten procedures or services that generated the greatest amount of facility fee revenue and, for each such procedure or service, the total amount of revenue received by the hospital or health system derived from facility fees, and (G) the top ten procedures for which facility fees are charged based on patient volume. For purposes of this subsection, "facility" means a hospital-based facility that is located outside a hospital campus.

(2) The commissioner shall publish the information reported pursuant to subdivision (1) of this subsection, or post a link to such information, on the Internet web site of the Office of Health Care Access.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2017

19a-508c

Statement of Legislative Commissioners:

In Section 1(b), subdivision designators (1) to (3), inclusive, were bracketed and changed to subparagraph designators (A) to (C), inclusive for accuracy; in Section (1)(b)(2)(B), subparagraph designators (A) to (C), inclusive, were bracketed and changed to clause designators (i) to (iii), inclusive, for accuracy; and in Section 1(l)(1), "management code" was changed to "management (CPT E/M) code" for internal consistency.

PH

Joint Favorable Subst. -LCO

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 18 $

FY 19 $

UConn Health Ctr.

Various - Cost

Less than 48,500

Less than 48,500

UConn Health Ctr.

Various - Potential Revenue Loss

See Below

See Below

Note: Various=Various

Municipal Impact: None

Explanation

The bill's provision requiring facility fee notices be sent to patients who make nonemergency appointments seven days hence, instead of ten, results in a fiscal impact of less than $48,500 in both FY 18 and FY 19. This requirement increases the number of notices that must be sent by approximately 17,200 patients annually, with a labor and supply cost of $2.80 per mailing. However, the number of notices sent in FY 19 and thereafter is expected to decline because notices will be sent electronically when possible, upon UConn Health Center's adoption of electronic health records in April 2018.

The bill results in a potential revenue loss to the UConn Health Center due to the provision requiring patient written acknowledgement of the facility fee, for nonemergency services. If a patient refuses acknowledgement, then either service will not be given or the facility fee cannot be charged. Both possibilities result in a revenue loss to the health center. In 2015, facility fees from Health Center facilities outside John Dempsey Hospital generated $17.6 million. This total drops to $6.6 million, when fees from dermatology are excluded (as the Health Center is phasing out dermatology facility fees). The extent of the potential revenue loss depends on the number of patients who refuse to acknowledge receipt of the facility fee notice, and the services those patients were seeking. If few patients seeking lower-cost services refuse to acknowledge receipt, then the revenue loss is minimal, but the impact is larger if many patients seeking higher-cost services refuse.

The bill's provision that identifies a facility fee charged without giving adequate patient notice of the fee, as an unfair trade practice is not anticipated to result in a fiscal impact.

Lastly, the bill does not result in a fiscal impact to the state health plan as employees and covered dependents pay plan cost-sharing irrespective of any facility fee charged, which is unchanged by the bill. The bill is not anticipated to result in an impact to municipal health plans.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation. As noted above, the cost to UConn Health Center of sending more facility fee notices is expected to decrease in FY 19 and thereafter with the Health Center's adoption of electronic health records and patient communications.

OLR Bill Analysis

sSB 451

AN ACT PROTECTING PATIENTS FROM UNREASONABLE MEDICAL BILLS.

SUMMARY

This bill makes various changes concerning facility fees charged by hospitals and health systems for outpatient services provided at hospital-based facilities. By law, hospital-based facilities must notify a patient in writing that the facility is part of a hospital or health system that charges a facility fee for outpatient services, among other things. The bill modifies the notification requirement by:

As under current law, the notice requirements do not apply to Medicare and Medicaid patients or those receiving services under a workers' compensation plan.

The bill also specifies that the current limits on allowable facility fees apply only to facilities that are provider-based entities under Medicare authorized to bill for emergency procedures (see BACKGROUND).

Finally, the bill modifies statutory definitions related to facility fees and makes technical and conforming changes.

EFFECTIVE DATE: October 1, 2017

DEFINITIONS

Under the bill, a “facility fee” means a fee a hospital or health system charges or bills for any outpatient services provided in a hospital-based facility, not just outpatient hospital services as under current law. By law, such facility fees must be (1) intended to compensate the hospital or health system for its operational expenses and (2) separate and distinct from a provider's professional fee.

The bill defines a “hospital-based facility” as a facility or office where (1) professional medical services are provided and (2) a hospital or health system bills or is compensated for the services. Under current law, such a facility must be wholly or partly owned or operated by a hospital or health system where hospital or professional medical services are provided.

PATIENT NOTICE

Notice Requirements

Under current law, a hospital or health system that charges a facility fee must notify patients receiving outpatient services in writing about their potential financial liability. The notice must provide additional information if the hospital or health care system provides outpatient services at a facility that (1) uses current procedural terminology evaluation and management (CPT E/M) codes for outpatient services and (2) expects to charge a separate fee for professional medical services.

The bill instead establishes one notice requirement for any hospital or health system that charges a facility fee (1) using CPT E/M codes or (2) for any outpatient services provided at a hospital-based facility located off-site from the hospital campus. As under current law, the notice must, among other things:

The bill specifies that if the notice provides an estimated range for a facility fee, the high number in the range cannot exceed 150% of the low number.

Notice Delivery

The bill requires facilities to send the patient's notice in advance, if the patient's appointment is scheduled for at least seven days, rather than ten days, after the appointment is made.

Specifically, for nonemergency care when a patient's appointment is scheduled for seven or more days after the appointment is made, the hospital or health system must send written notice to the patient by first class mail, encrypted email, or a secure patient Internet portal within three days after the appointment is made. For appointments scheduled to occur within seven days after they were made, or if the patient arrives without an appointment, the notice must be hand-delivered to the patient when he or she arrives at the facility.

Under current law and the bill, hospitals or health systems must generally provide written notice to an emergency care patient as soon as practicable after the patient is stabilized or is determined not to have an emergency medical condition and before he or she leaves the facility.

LIMITS ON ALLOWABLE FACILITY FEES

Current law prohibits hospitals, health systems, and hospital-based facilities from collecting a facility fee:

Under the bill, the prohibition only applies if the facility is a provider-based entity under Medicare and is authorized to bill for emergency procedures (see BACKGROUND).

BACKGROUND

Medicare Provider-Based Entities

Under the federal Centers for Medicare and Medicaid Services “provider-based status” rules, Medicare will reimburse for facility fees at a hospital-based facility (such a group practice owned by the hospital) meeting certain requirements but not at physicians' offices not affiliated with a hospital.

A facility or practice has provider-based status and thus can bill for facility fees if it has a relationship with the main provider (i.e., the hospital) concerning a range of issues, such as licensure, clinical and financial integration with the hospital, public awareness, and billing practices. The regulations specify payment recovery procedures if a hospital inappropriately treats a facility as provider-based (42 CFR 413.65).

Connecticut Unfair Trade Practices Act (CUTPA)

The law prohibits businesses from engaging in unfair and deceptive acts or practices. CUTPA 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 $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.

COMMITTEE ACTION

Public Health Committee

Joint Favorable

Yea

18

Nay

7

(03/24/2017)

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