Source: https://www.cga.ct.gov/2015/SUM/2015SUM00146-R03SB-00811-SUM.htm
Timestamp: 2019-02-20 18:31:27
Document Index: 529567717

Matched Legal Cases: ['§ 58', '§ 58', '§ 25', '§ 25', '§ 20', '§ 59', '§ 28', '§ 30', '§ 19', '§ 28', '§ 70']

PA 15-146—SB 811
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:
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;
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.
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 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.
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;
(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.
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).
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.
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:
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;
The notice may be provided electronically or by mail.
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.
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.
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.
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.
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.
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:
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);
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.
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;
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.
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:
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.
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.
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:
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.
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.
Beginning January 1, 2016, the act requires each billing statement that includes a facility fee to:
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.
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.
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;
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.
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.
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
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.
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.
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.
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.
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:
3. helping these providers meet the benchmarks or holding them accountable to such limits.
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
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.
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;
Under the act, the state officials must examine:
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.
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.
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:
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.
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:
7. supporting public health reporting, quality improvement, academic research, and health care delivery and payment reform through data aggregation and analytics;
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.
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 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.
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.
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.
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.
Within existing resources, the act requires the DSS commissioner, in consultation with the State Health Information Technology Advisory Council, to:
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:
EFFECTIVE DATE: July 1, 2015, except a repealer and a conforming change are effective October 1, 2015.
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
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).
The act creates a 28-member State Health Information Technology Advisory Council. The council's purpose is to advise the DSS commissioner on:
The council also reviews and comments on certain DSS federal grant applications (see below).
The council's membership includes the following individuals, or their designees:
- 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)
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 act provides that council members are not paid for their service, except for reimbursement for reasonable expenses incurred in performing their duties.
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.
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:
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.
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:
§ 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.
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”).
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
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.
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.
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:
If the applicant fails to submit any such information within 60 days of OHCA's request, OHCA must consider the application withdrawn.
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).
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 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.
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 act requires the purchaser to pay the cost of hiring the reporter in an amount OHCA determines, up to $200,000 annually.
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.
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:
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':
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;
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 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.
The act specifies that the CMIR requirements cannot prohibit a hospital ownership transfer, but the proposed transfer must not be completed:
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.
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 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:
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:
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;
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:
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.
§§ 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.
Under existing law, general and children's hospitals must annually report certain information to OHCA. Among other things, this includes:
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.
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.
The Joint Commission is an independent, nonprofit organization that accredits and certifies many categories of health care organizations and programs in the United States.
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