Connecticut 2020 Regular Session

Connecticut House Bill HB05018 Compare Versions

Only one version of the bill is available at this time.

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3	3	LCO No. 628 1 of 38
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5	5	General Assembly Governor's Bill No. 5018
6	6	February Session, 2020
7	7	LCO No. 628
8	8
9	9
10	10	Referred to Committee on INSURANCE AND REAL ESTATE
11	11
12	12
13	13	Introduced by:
14	14	REP. ARESIMOWICZ, 30
15	15	th
16	16	Dist.
17	17	REP. RITTER M., 1
18	18	st
19	19	Dist.
20	20	SEN. LOONEY, 11
21	21	th
22	22	Dist.
23	23	SEN. DUFF, 25
24	24	th
25	25	Dist.
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32	32	AN ACT CONCERNING HE ALTH CARE COST GROWT H IN
33	33	CONNECTICUT.
34	34	Be it enacted by the Senate and House of Representatives in General
35	35	Assembly convened:
36	36
37	37	Section 1. Section 19a-754a of the 2020 supplement to the general 1
38	38	statutes is repealed and the following is substituted in lieu thereof 2
39	39	(Effective July 1, 2020): 3
40	40	(a) There is established an Office of Health Strategy, which shall be 4
41	41	within the Department of Public Health for administrative purposes 5
42	42	only. The department head of said office shall be the executive director 6
43	43	of the Office of Health Strategy, who shall be appointed by the Governor 7
44	44	in accordance with the provisions of sections 4-5 to 4-8, inclusive, with 8
45	45	the powers and duties therein prescribed. 9
46	46	(b) The Office of Health Strategy shall be responsible for the 10
47	47	following: 11 Governor's Bill No. 5018
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53	53	(1) Developing and implementing a comprehensive and cohesive 12
54	54	health care vision for the state, including, but not limited to, a 13
55	55	coordinated state health care cost containment strategy; 14
56	56	(2) Promoting effective health planning and the provision of quality 15
57	57	health care in the state in a manner that ensures access for all state 16
58	58	residents to cost-effective health care services, avoids the duplication of 17
59	59	such services and improves the availability and financial stability of 18
60	60	such services throughout the state; 19
61	61	(3) [Directing] (A) Developing, innovating, directing and overseeing 20
62	62	health care delivery and payment models in the state that reduce health 21
63	63	care cost growth and improve the quality of patient care, including, but 22
64	64	not limited to, the State Innovation Model Initiative and related 23
65	65	successor initiatives, (B) setting an annual health care cost growth 24
66	66	benchmark and primary care target pursuant to section 3 of this act, (C) 25
67	67	developing and adopting health care quality benchmarks pursuant to 26
68	68	section 8 of this act, (D) enhancing the transparency of health care 27
69	69	entities, as defined in section 2 of this act, (E) monitoring the 28
70	70	development of accountable care organizations and patient-centered 29
71	71	medical homes in the state, and (F) monitoring the adoption of 30
72	72	alternative payment methodologies in the state; 31
73	73	(4) (A) Coordinating the state's health information technology 32
74	74	initiatives, (B) seeking funding for and overseeing the planning, 33
75	75	implementation and development of policies and procedures for the 34
76	76	administration of the all-payer claims database program established 35
77	77	under section 19a-775a, (C) establishing and maintaining a consumer 36
78	78	health information Internet web site under section 19a-755b, and (D) 37
79	79	designating an unclassified individual from the office to perform the 38
80	80	duties of a health information technology officer as set forth in sections 39
81	81	17b-59f and 17b-59g; 40
82	82	(5) Directing and overseeing the Health Systems Planning Unit 41
83	83	established under section 19a-612 and all of its duties and 42
84	84	responsibilities as set forth in chapter 368z; and 43 Governor's Bill No. 5018
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90	90	(6) Convening forums and meetings with state government and 44
91	91	external stakeholders, including, but not limited to, the Connecticut 45
92	92	Health Insurance Exchange, to discuss health care issues designed to 46
93	93	develop effective health care cost and quality strategies. 47
94	94	(c) The Office of Health Strategy shall constitute a successor, in 48
95	95	accordance with the provisions of sections 4-38d, 4-38e and 4-39, to the 49
96	96	functions, powers and duties of the following: 50
97	97	(1) The Connecticut Health Insurance Exchange, established 51
98	98	pursuant to section 38a-1081, relating to the administration of the all-52
99	99	payer claims database pursuant to section 19a-755a; and 53
100	100	(2) The Office of the Lieutenant Governor, relating to the (A) 54
101	101	development of a chronic disease plan pursuant to section 19a-6q, (B) 55
102	102	housing, chairing and staffing of the Health Care Cabinet pursuant to 56
103	103	section 19a-725, and (C) (i) appointment of the health information 57
104	104	technology officer, and (ii) oversight of the duties of such health 58
105	105	information technology officer as set forth in sections 17b-59f and 17b-59
106	106	59g. 60
107	107	(d) Any order or regulation of the entities listed in subdivisions (1) 61
108	108	and (2) of subsection (c) of this section that is in force on July 1, 2018, 62
109	109	shall continue in force and effect as an order or regulation until 63
110	110	amended, repealed or superseded pursuant to law. 64
111	111	Sec. 2. (NEW) (Effective July 1, 2020) For the purposes of this section 65
112	112	and sections 3 to 9, inclusive, of this act: 66
113	113	(1) "Device manufacturer" means a manufacturer that manufactures 67
114	114	a device for which annual sales in this state exceed ten million dollars; 68
115	115	(2) "Drug manufacturer" means the manufacturer of a drug that is: 69
116	116	(A) Included in information and data submitted by a health carrier 70
117	117	pursuant to section 38a-479qqq of the general statutes; (B) studied or 71
118	118	listed pursuant to subsection (c) or (d) of section 19a-754b of the general 72
119	119	statutes; or (C) in a therapeutic class of drugs that the executive director 73 Governor's Bill No. 5018
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121	121
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125	125	determines, through public or private reports, has had a substantial 74
126	126	impact on prescription drug expenditures, net of rebates, as a 75
127	127	percentage of total health care expenditures; 76
128	128	(3) "Executive director" means the executive director of the office; 77
129	129	(4) "Health care cost growth benchmark" means the annual 78
130	130	benchmark established pursuant to section 3 of this act; 79
131	131	(5) "Health care entity" means an accountable care organization, 80
132	132	ambulatory surgical center, clinic, hospital or provider organization in 81
133	133	this state, other than a health care provider contracting unit that, for a 82
134	134	given calendar year: (A) Has a patient panel of not more than ten 83
135	135	thousand patients; or (B) represents health care providers who 84
136	136	collectively receive less than twenty million dollars in net patient service 85
137	137	revenue from health carriers; 86
138	138	(6) "Health care facility" has the same meaning as provided in section 87
139	139	19a-630 of the general statutes; 88
140	140	(7) "Health care quality benchmark" means an annual benchmark 89
141	141	established pursuant to section 8 of this act; 90
142	142	(8) "Health care provider" has the same meaning as provided in 91
143	143	section 19a-17b of the general statutes; 92
144	144	(9) "Health status adjusted total medical expenses" means: (A) The 93
145	145	total cost of care for the patient population of a provider organization 94
146	146	with at least thirty-six thousand member months for a given calendar 95
147	147	year, which cost (i) is calculated for such year on the basis of the allowed 96
148	148	claims for all categories of medical expenses and all nonclaims 97
149	149	payments for such year, including, but not limited to, cost-sharing 98
150	150	payments, adjusted by health status and expressed on a per member, 99
151	151	per month basis for all members in this state, (ii) is reported to the 100
152	152	executive director separately for Medicaid, Medicare and 101
153	153	nongovernment health plans for such year, and (iii) discloses the health 102
154	154	adjustment risk score and the version of the risk adjustment tool used to 103 Governor's Bill No. 5018
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157	157
158	158	LCO No. 628 5 of 38
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160	160	calculate such score for such provider organization for such year; and 104
161	161	(B) the total aggregate medical expenses for all health care providers and 105
162	162	provider organizations with fewer than thirty-six thousand member 106
163	163	months for a given calendar year; 107
164	164	(10) "Hospital outpatient department" has the same meaning as such 108
165	165	term is used in Section 413.65 of Title 42 of the Code of Federal 109
166	166	Regulations, as amended from time to time; 110
167	167	(11) "Institutional provider" means any health care provider that 111
168	168	provides skilled nursing facility services, or acute, chronic or 112
169	169	rehabilitation hospital services, in this state; 113
170	170	(12) "Office" means the Office of Health Strategy established under 114
171	171	section 19a-754a of the general statutes, as amended by this act; 115
172	172	(13) "Other entity" means a device manufacturer, drug manufacturer 116
173	173	or pharmacy benefits manager; 117
174	174	(14) "Payer" means a payer that, during a given calendar year, pays 118
175	175	health care providers for health care services on behalf of, or pharmacies 119
176	176	for prescription drugs dispensed to, more than ten thousand individuals 120
177	177	in this state; 121
178	178	(15) "Pharmacy benefits manager" has the same meaning as provided 122
179	179	in section 38a-479ooo of the general statutes; 123
180	180	(16) "Primary care target" means the annual target established 124
181	181	pursuant to section 3 of this act; 125
182	182	(17) "Provider organization" means a group of persons, including, but 126
183	183	not limited to, an accountable care organization, association, business 127
184	184	trust, corporation, independent practice association, partnership, 128
185	185	physician organization, physician-hospital organization or provider 129
186	186	network, that is in the business of health care delivery or management 130
187	187	in this state and represents a health care provider in contracting with a 131
188	188	payer for payment for health care services; and 132 Governor's Bill No. 5018
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194	194	(18) "Total health care expenditures" means the per capita sum of all 133
195	195	health care expenditures in this state from public and private sources 134
196	196	for a given calendar year, including: (A) All categories of medical 135
197	197	expenses and all nonclaims payments to health care providers and 136
198	198	health care facilities, as included in the health status adjusted total 137
199	199	medical expenses reported, if any, by the executive director pursuant to 138
200	200	subsection (c) of section 5 of this act; (B) all patient cost-sharing 139
201	201	amounts, including, but not limited to, deductibles and copayments; (C) 140
202	202	the net cost of nongovernment health insurance; (D) prescription drug 141
203	203	expenditures net of rebates and discounts; (E) device manufacturer 142
204	204	expenditures net of rebates and discounts; and (F) any other 143
205	205	expenditures specified by the executive director. 144
206	206	Sec. 3. (NEW) (Effective July 1, 2020) (a) Not later than December 1, 145
207	207	2020, and annually thereafter, the executive director shall establish a 146
208	208	health care cost growth benchmark for the calendar year next 147
209	209	succeeding. Such health care cost growth benchmark shall address the 148
210	210	average growth in total health care expenditures across all payers and 149
211	211	populations in this state for such year, and the executive director shall 150
212	212	include within such health care cost growth benchmark a primary care 151
213	213	target to ensure primary care spending as a percentage of total health 152
214	214	care expenditures reaches a goal of ten per cent for the calendar year 153
215	215	beginning January 1, 2025. 154
216	216	(b) In establishing each health care cost growth benchmark pursuant 155
217	217	to subsection (a) of this section, the executive director shall, at a 156
218	218	minimum: 157
219	219	(1) Consider any change in the consumer price index for all urban 158
220	220	consumers in the northeast region from the preceding calendar year, 159
221	221	and the most recent publicly available information concerning the 160
222	222	growth rate of the gross state product; 161
223	223	(2) Evaluate current primary care spending as a percentage of total 162
224	224	health care expenditures; and 163
225	225	(3) (A) Hold an informational public hearing concerning such health 164 Governor's Bill No. 5018
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228	228
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231	231	care cost growth benchmark: 165
232	232	(i) At a time and place designated by the executive director in a notice 166
233	233	prominently posted by the executive director on the office's Internet 167
234	234	web site; 168
235	235	(ii) In a form and manner prescribed by the executive director; and 169
236	236	(iii) On the basis of the most recent report, if any, prepared by the 170
237	237	executive director pursuant to subsection (c) of section 5 of this act, and 171
238	238	any other information that the executive director, in the executive 172
239	239	director's discretion, deems relevant for the purposes of such hearing. 173
240	240	(B) Notwithstanding subparagraph (A) of this subdivision, the 174
241	241	executive director shall not be required to hold an informational public 175
242	242	hearing concerning a health care cost growth benchmark for any 176
243	243	calendar year beginning on or after January 1, 2022, if such health care 177
244	244	cost growth benchmark is the same as the health care cost growth 178
245	245	benchmark for the preceding calendar year. 179
246	246	(c) If the executive director determines, after any informational public 180
247	247	hearing held pursuant to subdivision (3) of subsection (b) of this section, 181
248	248	that a modification to the health care cost growth benchmark is, in the 182
249	249	executive director's discretion, reasonably warranted, the executive 183
250	250	director may modify such health care cost growth benchmark. The 184
251	251	executive director need not hold an additional informational public 185
252	252	hearing concerning such modified health care cost growth benchmark. 186
253	253	(d) The executive director shall post each health care cost growth 187
254	254	benchmark on the office's Internet web site. 188
255	255	(e) The executive director may enter into such contractual agreements 189
256	256	as may be necessary to carry out the purposes of this section, including, 190
257	257	but not limited to, contractual agreements with actuarial, economic and 191
258	258	other experts and consultants to assist the executive director in 192
259	259	establishing health care cost growth benchmarks. 193
260	260	Sec. 4. (NEW) (Effective July 1, 2020) (a) (1) Not later than May 1, 2022, 194 Governor's Bill No. 5018
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266	266	and annually thereafter, the executive director shall hold an 195
267	267	informational public hearing to compare the growth in total health care 196
268	268	expenditures during the preceding calendar year to the health care cost 197
269	269	growth benchmark established pursuant to section 3 of this act for such 198
270	270	year. Such hearing shall involve an examination of: 199
271	271	(A) The report, if any, most recently prepared by the executive 200
272	272	director pursuant to subsection (c) of section 5 of this act; 201
273	273	(B) The expenditures of health care entities and payers, including, but 202
274	274	not limited to, health care cost trends, primary care spending as a 203
275	275	percentage of total health care expenditures, and the factors 204
276	276	contributing to such costs and expenditures; 205
277	277	(C) Whether one category of expenditures may be offset by savings 206
278	278	in another category of expenditures; and 207
279	279	(D) Any other matters that the executive director, in the executive 208
280	280	director's discretion, deems relevant for the purposes of this section. 209
281	281	(2) The executive director may require that any health care entity or 210
282	282	payer that is found to be a significant contributor to health care cost 211
283	283	growth in this state during the preceding calendar year participate in 212
284	284	such hearing. Each such health care entity or payer that is required to 213
285	285	participate in such hearing shall provide testimony on issues identified 214
286	286	by the executive director, and provide additional information on actions 215
287	287	taken to reduce such health care entity's contribution to future state-216
288	288	wide health care costs and expenditures. 217
289	289	(b) Not later than October 1, 2022, and annually thereafter, the 218
290	290	executive director shall prepare and submit a report, in accordance with 219
291	291	section 11-4a of the general statutes, to the joint standing committees of 220
292	292	the General Assembly having cognizance of matters relating to 221
293	293	insurance and public health. Such report shall be based on the executive 222
294	294	director's analysis of the information submitted during the most recent 223
295	295	informational public hearing conducted pursuant to subsection (a) of 224
296	296	this section and any other information that the executive director, in the 225 Governor's Bill No. 5018
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299	299
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302	302	executive director's discretion, deems relevant for the purposes of this 226
303	303	section, and shall: 227
304	304	(1) Describe health care spending trends in this state, including, but 228
305	305	not limited to, trends in primary care spending as a percentage of total 229
306	306	health care expenditures, and the factors underlying such trends; and 230
307	307	(2) Disclose the executive director's recommendations, if any, 231
308	308	concerning strategies to increase the efficiency of this state's health care 232
309	309	system, including, but not limited to, any recommended legislation 233
310	310	concerning this state's health care system. 234
311	311	Sec. 5. (NEW) (Effective July 1, 2020) (a) Not later than March 1, 2022, 235
312	312	and annually thereafter, each institutional provider, on behalf of such 236
313	313	institutional provider and its parent organization and affiliated entities, 237
314	314	health care provider that is not an institutional provider and provider 238
315	315	organization in this state, shall submit to the executive director, for the 239
316	316	preceding calendar year: 240
317	317	(1) Data concerning: 241
318	318	(A) The utilization of health care services provided by such provider 242
319	319	or organization; 243
320	320	(B) The charges, prices imposed and payments received by such 244
321	321	provider or organization for such services; 245
322	322	(C) The costs incurred, and revenues earned, by such provider or 246
323	323	organization in providing such services; and 247
324	324	(D) Any other matter that the executive director deems relevant for 248
325	325	the purposes of this section; and 249
326	326	(2) If such provider is a hospital, the data described in subdivision (1) 250
327	327	of this subsection, and such additional data, information and documents 251
328	328	designated by the executive director, including, but not limited to, 252
329	329	charge masters, cost data, audited financial statements and merged 253
330	330	billing and discharge data, provided such provider shall not be required 254 Governor's Bill No. 5018
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336	336	to submit any data contained in a report that is filed pursuant to 255
337	337	chapters 368aa to 368ll, inclusive, of the general statutes and available to 256
338	338	the executive director. 257
339	339	(b) The executive director shall establish standards to ensure that the 258
340	340	data, information and documents submitted to the executive director 259
341	341	pursuant to subsection (a) of this section are submitted to the executive 260
342	342	director in a uniform manner. Such standards shall enable the executive 261
343	343	director to identify, on a patient-centered and health care provider-262
344	344	specific basis, state-wide and regional trends in the availability, cost, 263
345	345	price and utilization of medical, surgical, diagnostic and ancillary 264
346	346	services and prescription drugs provided by hospital outpatient 265
347	347	departments, acute care hospitals, chronic disease hospitals, 266
348	348	rehabilitation hospitals and other specialty hospitals, clinics, including, 267
349	349	but not limited to, psychiatric clinics, urgent care facilities and facilities 268
350	350	providing ambulatory care. Such standards may require hospitals to 269
351	351	submit such data, information and documents to the executive director 270
352	352	in an electronic form, provided such standards shall provide for a 271
353	353	waiver of such requirement if such waiver is reasonable in the judgment 272
354	354	of the executive director. 273
355	355	(c) (1) Not later than December 1, 2021, and annually thereafter, the 274
356	356	executive director shall prepare, to the extent practicable, and post on 275
357	357	the office's Internet web site, a report concerning health status adjusted 276
358	358	total medical expenses for the preceding calendar year, including, but 277
359	359	not limited to, a breakdown of such health status adjusted total medical 278
360	360	expenses by: 279
361	361	(A) Major service category; 280
362	362	(B) Payment methodology; 281
363	363	(C) Relative price; 282
364	364	(D) Direct hospital inpatient cost; 283
365	365	(E) Indirect hospital inpatient cost; 284 Governor's Bill No. 5018
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368	368
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371	371	(F) Direct hospital outpatient cost; 285
372	372	(G) Indirect hospital outpatient cost; and 286
373	373	(H) Primary care spending as a percentage of total health care 287
374	374	expenditures. 288
375	375	(2) Notwithstanding subdivision (1) of this subsection, the executive 289
376	376	director shall not disclose any health care provider-specific data or 290
377	377	information unless the executive director provides at least ten days' 291
378	378	advance written notice of such disclosure to each health care provider 292
379	379	that would be affected by such disclosure. 293
380	380	(d) The executive director shall, at least annually, submit a request to 294
381	381	the federal Centers for Medicare and Medicaid Services for the health 295
382	382	status adjusted total medical expenses of provider organizations that 296
383	383	served Medicare patients during the calendar year next preceding. 297
384	384	(e) The executive director may enter into such contractual agreements 298
385	385	as may be necessary to carry out the purposes of this section, including, 299
386	386	but not limited to, contractual agreements with actuarial, economic and 300
387	387	other experts and consultants. 301
388	388	Sec. 6. (NEW) (Effective July 1, 2020) (a) (1) For each calendar year 302
389	389	beginning on or after January 1, 2022, if the executive director 303
390	390	determines that the average annual percentage change in total health 304
391	391	care expenditures for the preceding calendar year exceeded the health 305
392	392	care cost growth benchmark for such year, the executive director shall 306
393	393	identify, not later than May first of such calendar year, each health care 307
394	394	entity or payer that exceeded such health care cost growth benchmark 308
395	395	for such year. 309
396	396	(2) The executive director may require any health care entity or payer 310
397	397	that is found to be a significant contributor to health care cost growth in 311
398	398	this state during the preceding calendar year to participate in the 312
399	399	informational public hearing held pursuant to subsection (a) of section 313
400	400	4 of this act. Each such entity or payer that is required to participate in 314 Governor's Bill No. 5018
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403	403
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406	406	such hearing shall provide testimony on issues identified by the 315
407	407	executive director, and provide additional information on actions taken 316
408	408	to reduce such entity's or payer's contribution to future state-wide 317
409	409	health care costs. 318
410	410	(b) Not later than thirty days after the executive director identifies 319
411	411	each health care entity or payer pursuant to subsection (a) of this section, 320
412	412	the executive director shall send a notice to each such entity or payer. 321
413	413	Such notice shall be in a form and manner prescribed by the executive 322
414	414	director, and disclose to each such entity or payer: 323
415	415	(1) That the executive director has identified such entity or payer 324
416	416	pursuant to subsection (a) of this section; 325
417	417	(2) The factual basis for the executive director's identification of such 326
418	418	entity or payer pursuant to subsection (a) of this section; and 327
419	419	(3) That such entity or payer shall file a proposed performance 328
420	420	improvement plan pursuant to subdivision (1) of subsection (e) of this 329
421	421	section, provided such entity or payer may: 330
422	422	(A) File a request for an extension of time, or a waiver, pursuant to 331
423	423	subdivision (1) of subsection (c) of this section; and 332
424	424	(B) Request a hearing pursuant to subsection (d) of this section. 333
425	425	(c) (1) (A) Each health care entity or payer identified by the executive 334
426	426	director pursuant to subsection (a) of this section may, not later than 335
427	427	thirty days after the executive director sends a notice to such entity or 336
428	428	payer pursuant to subsection (b) of this section, file with the executive 337
429	429	director, in a form and manner prescribed by the executive director, a 338
430	430	request seeking: 339
431	431	(i) An extension of time to file a proposed performance improvement 340
432	432	plan pursuant to subdivision (1) of subsection (e) of this section; or 341
433	433	(ii) A waiver from the requirement that such entity or payer file a 342
434	434	proposed performance improvement plan pursuant to subdivision (1) 343 Governor's Bill No. 5018
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436	436
437	437
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440	440	of subsection (e) of this section. 344
441	441	(B) Each health care entity or payer that files a request pursuant to 345
442	442	subparagraph (A) of this subdivision shall set forth in such request the 346
443	443	reasons for such request. 347
444	444	(2) Not later than thirty days after a health care entity or payer files a 348
445	445	request pursuant to subdivision (1) of this subsection, the executive 349
446	446	director shall: 350
447	447	(A) Examine the reasons set forth in the request and decide, on the 351
448	448	basis of such reasons, whether to approve or deny such request; and 352
449	449	(B) Send a notice, in a form and manner prescribed by the executive 353
450	450	director, to the entity or payer that filed such request disclosing, at a 354
451	451	minimum: 355
452	452	(i) The executive director's decision concerning such request and the 356
453	453	reasons therefor; 357
454	454	(ii) If the executive director denies such entity's or payer's request, 358
455	455	that such entity or payer may file a request for a hearing pursuant to 359
456	456	subsection (d) of this section; and 360
457	457	(iii) If such entity's or payer's request is a request for an extension of 361
458	458	time to file a proposed performance improvement plan pursuant to 362
459	459	subdivision (1) of subsection (e) of this section and the executive director 363
460	460	approves such request, the date by which such entity or payer shall file 364
461	461	such proposed performance improvement plan. 365
462	462	(d) Each health care entity or payer identified by the executive 366
463	463	director pursuant to subsection (a) of this section may, not later than 367
464	464	thirty days after the executive director sends a notice to such entity or 368
465	465	payer pursuant to subsection (b) of this section or subparagraph (B) of 369
466	466	subdivision (2) of subsection (c) of this section, as applicable, file with 370
467	467	the executive director a request for a hearing. Each hearing conducted 371
468	468	pursuant to this subsection shall be conducted in accordance with the 372
469	469	procedures for hearings on contested cases established in chapter 54 of 373 Governor's Bill No. 5018
470	470
471	471
472	472
473	473	LCO No. 628 14 of 38
474	474
475	475	the general statutes. 374
476	476	(e) (1) Each health care entity or payer identified by the executive 375
477	477	director pursuant to subsection (a) of this section, or required by the 376
478	478	executive director pursuant to subparagraph (C)(ii)(III) of subdivision 377
479	479	(4) of subsection (f) of this section, shall, subject to the provisions of 378
480	480	subsections (b) to (d), inclusive, of this section, file with the executive 379
481	481	director a proposed performance improvement plan. Such entity or 380
482	482	payer shall file such proposed performance improvement plan, which 381
483	483	shall include an implementation timetable, with the executive director, 382
484	484	in a form and manner prescribed by the executive director, not later than 383
485	485	whichever of the following dates first occurs: 384
486	486	(A) The date that is thirty days after the date on which the executive 385
487	487	director sent a notice to such entity or payer pursuant to subsection (b) 386
488	488	of this section; 387
489	489	(B) The date that the executive director disclosed to such entity or 388
490	490	payer pursuant to subparagraph (B)(iii) of subdivision (2) of subsection 389
491	491	(c) of this section; or 390
492	492	(C) The date that is thirty days after the date on which the notice of a 391
493	493	final decision is issued following a hearing conducted pursuant to 392
494	494	subsection (d) of this section. 393
495	495	(2) (A) The executive director shall review each health care entity's 394
496	496	and payer's proposed performance improvement plan filed pursuant to 395
497	497	subdivision (1) of this subsection to determine whether, in the executive 396
498	498	director's judgment, it is reasonably likely that: 397
499	499	(i) Such proposed performance improvement plan will address the 398
500	500	cause of such entity's or payer's excessive cost growth; and 399
501	501	(ii) Such entity or payer will successfully implement such proposed 400
502	502	performance improvement plan. 401
503	503	(B) After the executive director reviews a proposed performance 402
504	504	improvement plan pursuant to subparagraph (A) of this subdivision, 403 Governor's Bill No. 5018
505	505
506	506
507	507
508	508	LCO No. 628 15 of 38
509	509
510	510	the executive director shall: 404
511	511	(i) Approve such proposed performance improvement plan if the 405
512	512	executive director determines, in the executive director's judgment, that 406
513	513	such proposed plan satisfies the criteria established in subparagraph (A) 407
514	514	of this subdivision; or 408
515	515	(ii) Deny such proposed performance improvement plan if the 409
516	516	executive director determines, in the executive director's judgment, that 410
517	517	such proposed performance improvement plan does not satisfy the 411
518	518	criteria established in subparagraph (A) of this subdivision. 412
519	519	(C) (i) Not later than thirty days after the executive director approves 413
520	520	or denies a proposed performance improvement plan pursuant to 414
521	521	subparagraph (B) of this subdivision, the executive director shall send a 415
522	522	notice to the health care entity or payer that filed such proposed 416
523	523	performance improvement plan disclosing, at a minimum, that: 417
524	524	(I) The executive director approved such proposed performance 418
525	525	improvement plan; or 419
526	526	(II) The executive director denied such proposed performance 420
527	527	improvement plan, the reasons for such denial and that such entity or 421
528	528	payer shall file with the executive director such amendments as are 422
529	529	necessary for such proposed performance improvement plan to satisfy 423
530	530	the criteria established in subparagraph (A) of this subdivision. 424
531	531	(ii) The executive director shall post a notice on the office's Internet 425
532	532	web site disclosing: 426
533	533	(I) The name of each health care entity or payer that files, and receives 427
534	534	approval for, a proposed performance improvement plan; and 428
535	535	(II) That such health care entity or payer is implementing such 429
536	536	performance improvement plan. 430
537	537	(D) Each health care entity or payer that receives a notice from the 431
538	538	executive director pursuant to subparagraph (C)(i) of this subdivision 432 Governor's Bill No. 5018
539	539
540	540
541	541
542	542	LCO No. 628 16 of 38
543	543
544	544	notifying such entity or payer that the executive director has denied 433
545	545	such entity's or payer's proposed performance improvement plan shall 434
546	546	file with the executive director, in a form and manner prescribed by the 435
547	547	executive director and not later than thirty days after the date that the 436
548	548	executive director sends such notice to such entity or payer, such 437
549	549	amendments as are necessary for such proposed performance 438
550	550	improvement plan to satisfy the criteria established in subparagraph (A) 439
551	551	of this subdivision. 440
552	552	(f) (1) Each health care entity or payer that receives a notice from the 441
553	553	executive director pursuant to subparagraph (C)(i) of subdivision (2) of 442
554	554	subsection (e) of this section notifying such entity or payer that the 443
555	555	executive director has approved such entity's or payer's proposed 444
556	556	performance improvement plan: 445
557	557	(A) Shall immediately make good faith efforts to implement such 446
558	558	performance improvement plan; and 447
559	559	(B) May amend such plan at any time during the implementation 448
560	560	timetable included in such performance improvement plan, provided 449
561	561	the executive director approves such amendment. 450
562	562	(2) The office may provide such assistance to each health care entity 451
563	563	or payer that the executive director, in the executive director's 452
564	564	discretion, deems necessary and appropriate to ensure that such entity 453
565	565	or payer successfully implements such entity's or payer's performance 454
566	566	improvement plan. 455
567	567	(3) Each health care entity or payer shall be subject to such additional 456
568	568	reporting requirements that the executive director, in the executive 457
569	569	director's discretion, deems necessary to ensure that such entity or payer 458
570	570	successfully implements such entity's or payer's performance 459
571	571	improvement plan. 460
572	572	(4) (A) Each health care entity or payer that files, and receives 461
573	573	approval for, a performance improvement plan pursuant to this section 462
574	574	shall, not later than thirty days after the last date specified in the 463 Governor's Bill No. 5018
575	575
576	576
577	577
578	578	LCO No. 628 17 of 38
579	579
580	580	implementation timetable included in such performance improvement 464
581	581	plan, submit to the executive director, in a form and manner prescribed 465
582	582	by the executive director, a report regarding the outcome of such entity's 466
583	583	or payer's implementation of such performance improvement plan. 467
584	584	(B) If the executive director determines, on the basis of the report 468
585	585	submitted by a health care entity or payer pursuant to subparagraph (A) 469
586	586	of this subdivision, that such entity or payer successfully implemented 470
587	587	such entity's or payer's performance improvement plan, the executive 471
588	588	director shall: 472
589	589	(i) Send a notice to such entity or payer, in a form and manner 473
590	590	prescribed by the executive director, disclosing such determination; and 474
591	591	(ii) Remove from the office's Internet web site the notice concerning 475
592	592	such entity or payer that the executive director posted on such Internet 476
593	593	web site pursuant to subparagraph (C)(ii) of subdivision (2) of 477
594	594	subsection (e) of this section. 478
595	595	(C) If the executive director determines, on the basis of the report 479
596	596	submitted by a health care entity or payer pursuant to subparagraph (A) 480
597	597	of this subdivision, that such entity or payer failed to successfully 481
598	598	implement such entity's or payer's performance improvement plan, the 482
599	599	executive director shall: 483
600	600	(i) Send a notice to such entity or payer, in a form and manner 484
601	601	prescribed by the executive director, disclosing such determination and 485
602	602	any action taken by the executive director pursuant to clause (ii) of this 486
603	603	subparagraph; and 487
604	604	(ii) In the executive director's discretion: 488
605	605	(I) Extend the implementation timetable included in such 489
606	606	performance improvement plan; 490
607	607	(II) Require such entity or payer to file with the executive director, in 491
608	608	a form and manner prescribed by the executive director, such 492
609	609	amendments to such performance improvement plan as are, in the 493 Governor's Bill No. 5018
610	610
611	611
612	612
613	613	LCO No. 628 18 of 38
614	614
615	615	executive director's judgment, necessary to ensure that such entity or 494
616	616	payer successfully implements such performance improvement plan; 495
617	617	(III) Require such entity or payer to file a new proposed performance 496
618	618	improvement plan pursuant to subdivision (1) of subsection (e) of this 497
619	619	section; or 498
620	620	(IV) Waive or delay the requirement that such entity or payer file any 499
621	621	future proposed performance improvement plan until the executive 500
622	622	director determines, in the executive director's discretion, that such 501
623	623	entity or payer has successfully implemented its current performance 502
624	624	improvement plan. 503
625	625	(g) The executive director shall keep confidential all nonpublic 504
626	626	clinical, financial, operational or strategic documents and information 505
627	627	filed with, or submitted to, the executive director pursuant to this 506
628	628	section. The executive director shall not disclose any such document or 507
629	629	information to any person without the consent of the health care entity 508
630	630	or payer that filed such document or information with, or submitted 509
631	631	such document or information to, the executive director pursuant to this 510
632	632	section, except in summary form as part of an evaluative report if the 511
633	633	executive director determines that such disclosure should be made in 512
634	634	the public interest after taking into account any privacy, trade secret or 513
635	635	anti-competitive considerations. Notwithstanding any provision of the 514
636	636	general statutes, no document or information filed with, or submitted 515
637	637	to, the executive director pursuant to this section shall be deemed to be 516
638	638	a public record or subject to disclosure under the Freedom of 517
639	639	Information Act, as defined in section 1-200 of the general statutes. 518
640	640	Sec. 7. (NEW) (Effective July 1, 2020) (a) (1) For each calendar year 519
641	641	beginning on or after January 1, 2022, if the executive director 520
642	642	determines that the average annual percentage change in total health 521
643	643	care expenditures for the preceding calendar year exceeded the health 522
644	644	care cost growth benchmark for such year, the executive director shall 523
645	645	identify each other entity that significantly contributed to exceeding 524
646	646	such benchmark. Each identification shall be based on: 525 Governor's Bill No. 5018
647	647
648	648
649	649
650	650	LCO No. 628 19 of 38
651	651
652	652	(A) The report, if any, prepared by the executive director pursuant to 526
653	653	subsection (c) of section 5 of this act for such calendar year; 527
654	654	(B) The report filed pursuant to section 38a-479ppp of the general 528
655	655	statutes for such calendar year; 529
656	656	(C) The information and data reported to the office pursuant to 530
657	657	section 19a-754b of the general statutes for such calendar year; 531
658	658	(D) Information obtained from the all-payer claims database 532
659	659	established under section 19a-755a of the general statutes; and 533
660	660	(E) Any other information that the executive director, in the executive 534
661	661	director's discretion, deems relevant for the purposes of this section. 535
662	662	(2) The executive director shall account for costs, net of rebates and 536
663	663	discounts, when identifying other entities pursuant to this section. 537
664	664	(b) The executive director may require that any other entity that is 538
665	665	found to be a significant contributor to health care cost growth in this 539
666	666	state during the preceding calendar year participate in the informational 540
667	667	public hearing held pursuant to subsection (a) of section 4 of this act. 541
668	668	Each such other entity that is required to participate in such hearing 542
669	669	shall provide testimony on issues identified by the executive director, 543
670	670	and provide additional information on actions taken to reduce such 544
671	671	health care entity's contribution to future state-wide health care costs. If 545
672	672	such other entity is a drug manufacturer, and the executive director 546
673	673	requires that such drug manufacturer participate in such hearing with 547
674	674	respect to a specific drug or class of drugs, such hearing may, to the 548
675	675	extent possible, include representatives from at least one brand-name 549
676	676	manufacturer, one generic manufacturer and one innovator company 550
677	677	that is less than ten years old. 551
678	678	Sec. 8. (NEW) (Effective July 1, 2020) (a) (1) For each calendar year 552
679	679	beginning on or after January 1, 2022, the executive director shall 553
680	680	develop and adopt annual health care quality benchmarks for health 554
681	681	care entities and payers that: 555 Governor's Bill No. 5018
682	682
683	683
684	684
685	685	LCO No. 628 20 of 38
686	686
687	687	(A) Enable health care entities and payers to report to the executive 556
688	688	director a standard set of information concerning health care quality for 557
689	689	such year; and 558
690	690	(B) Include measures concerning clinical health outcomes, 559
691	691	overutilization, underutilization and safety measures. 560
692	692	(2) In developing annual health care quality benchmarks pursuant to 561
693	693	subdivision (1) of this subsection, the executive director shall: 562
694	694	(A) Consider: 563
695	695	(i) Nationally recognized quality measures that are recommended by 564
696	696	medical groups or provider organizations concerning appropriate 565
697	697	quality measures for such groups' or organizations' specialties; and 566
698	698	(ii) Measures, including, but not limited to, newly developed 567
699	699	measures, that: 568
700	700	(I) Concern health outcomes, overutilization, underutilization and 569
701	701	patient safety; and 570
702	702	(II) Meet standards of patient-centeredness and ensure consideration 571
703	703	of important differences in preferences and clinical characteristics 572
704	704	within patient subpopulations; 573
705	705	(B) Provide stakeholders with an opportunity to engage with the 574
706	706	executive director in developing such benchmarks; and 575
707	707	(C) Ensure that the processes the executive director uses to develop, 576
708	708	and any research that the executive director relies upon in developing, 577
709	709	such benchmarks is transparent. 578
710	710	(b) Not later than October 1, 2021, and annually thereafter, the 579
711	711	executive director shall, prior to adopting health care quality 580
712	712	benchmarks pursuant to subdivision (1) of subsection (a) of this section 581
713	713	for the calendar year next succeeding, hold an informational public 582
714	714	hearing concerning the quality measures the executive director 583 Governor's Bill No. 5018
715	715
716	716
717	717
718	718	LCO No. 628 21 of 38
719	719
720	720	proposes to adopt as health care quality benchmarks for the calendar 584
721	721	year next succeeding. 585
722	722	(c) Not later than November 1, 2021, and annually thereafter, the 586
723	723	executive director shall send a notice to each health care entity, payer 587
724	724	and other entity disclosing the health care quality benchmarks that the 588
725	725	executive director has adopted for the calendar year next succeeding. 589
726	726	Sec. 9. (NEW) (Effective July 1, 2020) The executive director may adopt 590
727	727	regulations, in accordance with chapter 54 of the general statutes, to 591
728	728	implement the provisions of sections 2 to 8, inclusive, of this act. 592
729	729	Sec. 10. (NEW) (Effective July 1, 2020) For the purposes of this section 593
730	730	and sections 11 to 15, inclusive, of this act unless the context otherwise 594
731	731	requires: 595
732	732	(1) "Drug" means an article that is (A) recognized in the official United 596
733	733	States Pharmacopoeia, official Homeopathic Pharmacopoeia of the 597
734	734	United States or official National Formulary, or any supplement thereto, 598
735	735	(B) intended for use in the diagnosis, cure, mitigation, treatment or 599
736	736	prevention of disease in humans, (C) not food and intended to affect the 600
737	737	structure or any function of the human body, and (D) not a device and 601
738	738	intended for use as a component of any other article specified in 602
739	739	subparagraphs (A) to (C), inclusive, of this subdivision; 603
740	740	(2) "Drug Quality and Security Act" means the federal Drug Quality 604
741	741	and Security Act, 21 USC 351, et seq., as amended from time to time; 605
742	742	(3) "Food, Drug and Cosmetic Act" means the federal Food, Drug and 606
743	743	Cosmetic Act, 21 USC 301, et seq., as amended by the Drug Quality and 607
744	744	Security Act, as both may be amended from time to time; 608
745	745	(4) "Laboratory testing" means a quantitative and qualitative analysis 609
746	746	of a prescription drug consistent with the official United States 610
747	747	Pharmacopoeia; 611
748	748	(5) "Legend drug" means a drug that (A) any applicable federal or 612
749	749	state law requires must only be (i) dispensed pursuant to a prescription, 613 Governor's Bill No. 5018
750	750
751	751
752	752
753	753	LCO No. 628 22 of 38
754	754
755	755	or (ii) used by a prescribing practitioner, or (B) applicable federal law 614
756	756	requires to bear the following legend: "RX ONLY" IN ACCORDANCE 615
757	757	WITH GUIDELINES ESTABLISHED IN THE FEDERAL FOOD, DRUG 616
758	758	AND COSMETIC ACT; 617
759	759	(6) "Participating Canadian supplier" means a manufacturer or 618
760	760	wholesale drug distributor that is (A) licensed or permitted under 619
761	761	applicable Canadian law to manufacture or distribute prescription 620
762	762	drugs, (B) exporting legend drugs, in the manufacturer's original 621
763	763	container, to a participating wholesaler for distribution in this state 622
764	764	under the program, and (C) properly registered, if such Canadian 623
765	765	supplier is required to be registered, with the United States Food and 624
766	766	Drug Administration, or any successor agency; 625
767	767	(7) "Participating wholesaler" means a wholesaler, as defined in 626
768	768	section 21a-70 of the general statutes, that (A) has received a certificate 627
769	769	of registration from the Commissioner of Consumer Protection 628
770	770	pursuant to said section, and (B) is designated by the commissioner to 629
771	771	participate in the program; 630
772	772	(8) "Prescription" means a lawful verbal, written or electronic order 631
773	773	by a prescribing practitioner for a drug for a specific patient; 632
774	774	(9) "Program" means the Canadian legend drug importation program 633
775	775	established by the Commissioner of Consumer Protection pursuant to 634
776	776	section 11 of this act; 635
777	777	(10) "Qualified laboratory" means a laboratory that is (A) adequately 636
778	778	equipped and staffed to properly perform laboratory testing on legend 637
779	779	drugs, and (B) accredited to International Organization for 638
780	780	Standardization (ISO) 17025; and 639
781	781	(11) "Track-and-trace" means the product tracing process for the 640
782	782	components of the pharmaceutical distribution supply chain, as 641
783	783	described in Title II of the Drug Quality and Security Act. 642
784	784	Sec. 11. (NEW) (Effective July 1, 2020) (a) The Commissioner of 643 Governor's Bill No. 5018
785	785
786	786
787	787
788	788	LCO No. 628 23 of 38
789	789
790	790	Consumer Protection shall establish a program to be known as the 644
791	791	"Canadian legend drug importation program". Under such program, 645
792	792	the commissioner shall, notwithstanding any contrary provision of the 646
793	793	general statutes: 647
794	794	(1) Provide for the importation of safe and effective legend drugs 648
795	795	from Canada that have the highest potential for cost savings in this state; 649
796	796	and 650
797	797	(2) Designate one or more participating wholesalers to distribute 651
798	798	legend drugs in this state: 652
799	799	(A) In the manufacturer's original container; 653
800	800	(B) From a participating Canadian supplier; and 654
801	801	(C) To a pharmacy or institutional pharmacy, as defined in section 655
802	802	20-571 of the general statutes, or a qualified laboratory. 656
803	803	(b) (1) Not later than July 1, 2021, the Commissioner of Consumer 657
804	804	Protection shall submit a request to the federal Secretary of Health and 658
805	805	Human Services seeking approval for the program under 21 USC 384, 659
806	806	as amended from time to time. Such request shall, at a minimum: 660
807	807	(A) Describe the commissioner's plans for operating the program; 661
808	808	(B) Demonstrate that the legend drugs that will be imported and 662
809	809	distributed in this state under the program shall: 663
810	810	(i) Meet all applicable federal and state standards for safety and 664
811	811	effectiveness; and 665
812	812	(ii) Comply with all federal tracing procedures; and 666
813	813	(C) Disclose the costs of implementing the program. 667
814	814	(2) (A) If the federal Secretary of Health and Human Services 668
815	815	approves the commissioner's request, the commissioner shall: 669 Governor's Bill No. 5018
816	816
817	817
818	818
819	819	LCO No. 628 24 of 38
820	820
821	821	(i) Submit to the Commissioner of Public Health a notice disclosing 670
822	822	that the federal Secretary of Health and Human Services has approved 671
823	823	such request; 672
824	824	(ii) Submit to the joint standing committees of the General Assembly 673
825	825	having cognizance of matters relating to appropriations, general law, 674
826	826	human services and public health a notice disclosing that the federal 675
827	827	Secretary of Health and Human Services has approved such request; 676
828	828	and 677
829	829	(iii) Begin operating the program not later than one hundred eighty 678
830	830	days after the date of such approval. 679
831	831	(B) Except as otherwise provided in this subsection, the 680
832	832	Commissioner of Consumer Protection shall not operate the program 681
833	833	unless the federal Secretary of Health and Human Services approves the 682
834	834	commissioner's request. 683
835	835	Sec. 12. (NEW) (Effective July 1, 2020) (a) Each participating 684
836	836	wholesaler may, subject to the provisions of this section and sections 11 685
837	837	and 14 of this act, import into this state a legend drug from a 686
838	838	participating Canadian supplier, and distribute such legend drug to a 687
839	839	pharmacy or institutional pharmacy, as defined in section 20-571 of the 688
840	840	general statutes, or a qualified laboratory in this state, under the 689
841	841	program if: 690
842	842	(1) Such participating wholesaler: 691
843	843	(A) Is registered with the federal Secretary of Health and Human 692
844	844	Services pursuant to Section 510(b) of the Food, Drug and Cosmetic Act, 693
845	845	21 USC 360(b), as amended from time to time; and 694
846	846	(B) Holds a valid labeler code that has been issued to such 695
847	847	participating wholesaler by the United States Food and Drug 696
848	848	Administration, or any successor agency; and 697
849	849	(2) Such legend drug: 698 Governor's Bill No. 5018
850	850
851	851
852	852
853	853	LCO No. 628 25 of 38
854	854
855	855	(A) May be imported into this state in accordance with applicable 699
856	856	federal patent laws; 700
857	857	(B) Meets the United States Food and Drug Administration's, or any 701
858	858	successor agency's, standards concerning drug safety, effectiveness, 702
859	859	misbranding and adulteration; and 703
860	860	(C) Is not: 704
861	861	(i) A controlled substance, as defined in 21 USC 802, as amended from 705
862	862	time to time; 706
863	863	(ii) A biological product, as defined in 42 USC 262, as amended from 707
864	864	time to time; 708
865	865	(iii) An infused drug; 709
866	866	(iv) An intravenously injected drug; 710
867	867	(v) A drug that is inhaled during surgery; or 711
868	868	(vi) A drug that is a parenteral drug, the importation of which is 712
869	869	determined by the federal Secretary of Health and Human Services to 713
870	870	pose a threat to the public health. 714
871	871	(b) Each participating wholesaler shall: 715
872	872	(1) Comply with all applicable track-and-trace requirements, and 716
873	873	make available to the Commissioner of Consumer Protection all track-717
874	874	and-trace records not later than forty-eight hours after the commissioner 718
875	875	requests such records; 719
876	876	(2) Not import, distribute, dispense or sell in this state any legend 720
877	877	drugs under the program except in accordance with the provisions of 721
878	878	this section and sections 11 and 14 of this act; 722
879	879	(3) Not distribute, dispense or sell outside of this state any legend 723
880	880	drugs that are imported into this state under the program; 724 Governor's Bill No. 5018
881	881
882	882
883	883
884	884	LCO No. 628 26 of 38
885	885
886	886	(4) Ensure the safety and quality of the legend drugs that are 725
887	887	imported and distributed in this state under the program; 726
888	888	(5) For each initial shipment of a legend drug that is imported into 727
889	889	this state by such participating wholesaler, ensure that a qualified 728
890	890	laboratory engaged by such participating wholesaler tests a statistically 729
891	891	valid sample size for each batch of such legend drug in such shipment 730
892	892	for authenticity and degradation in a manner that is consistent with the 731
893	893	Food, Drug and Cosmetic Act; 732
894	894	(6) For each shipment of a legend drug that is imported into this state 733
895	895	by such participating wholesaler, and sampled and tested pursuant to 734
896	896	subdivision (5) of this subsection, ensure that a qualified laboratory 735
897	897	engaged by such participating wholesaler tests a statistically valid 736
898	898	sample of such legend drug in such shipment for authenticity and 737
899	899	degradation in a manner that is consistent with the Food, Drug and 738
900	900	Cosmetic Act; 739
901	901	(7) Certify to the Commissioner of Consumer Protection that each 740
902	902	legend drug imported into this state under the program: 741
903	903	(A) Is approved for marketing in the United States and not 742
904	904	adulterated or misbranded; and 743
905	905	(B) Meets all labeling requirements under 21 USC 352, as amended 744
906	906	from time to time; 745
907	907	(8) Maintain laboratory records, including, but not limited to, 746
908	908	complete data derived from all tests necessary to ensure that each 747
909	909	legend drug imported into this state under the program satisfies the 748
910	910	requirements of subdivisions (5) and (6) of this subsection; 749
911	911	(9) Maintain documentation demonstrating that the testing required 750
912	912	by subdivisions (5) and (6) of this subsection was conducted at a 751
913	913	qualified laboratory in accordance with the Food, Drug and Cosmetic 752
914	914	Act and all other applicable federal and state laws and regulations 753
915	915	concerning laboratory qualifications; 754 Governor's Bill No. 5018
916	916
917	917
918	918
919	919	LCO No. 628 27 of 38
920	920
921	921	(10) Maintain the following information for each legend drug that 755
922	922	such participating wholesaler imports and distributes in this state under 756
923	923	the program, and submit such information to the Commissioner of 757
924	924	Consumer Protection upon request by the commissioner: 758
925	925	(A) The name and quantity of the active ingredient of such legend 759
926	926	drug; 760
927	927	(B) A description of the dosage form of such legend drug; 761
928	928	(C) The date on which such participating wholesaler received such 762
929	929	legend drug; 763
930	930	(D) The quantity of such legend drug that such participating 764
931	931	wholesaler received; 765
932	932	(E) The point of origin and destination of such legend drug; 766
933	933	(F) The price paid by such participating wholesaler for such legend 767
934	934	drug; 768
935	935	(G) A report for any legend drug that fails laboratory testing under 769
936	936	subdivision (5) or (6) of this subsection; and 770
937	937	(H) Such additional information and documentation that the 771
938	938	commissioner deems necessary to ensure the protection of the public 772
939	939	health; and 773
940	940	(11) Maintain all information and documentation that is submitted to 774
941	941	the Commissioner of Consumer Protection pursuant to this subsection 775
942	942	for a period of not less than three years. 776
943	943	Sec. 13. (NEW) (Effective July 1, 2020) Each participating Canadian 777
944	944	supplier shall: 778
945	945	(1) Comply with all applicable track-and-trace requirements; 779
946	946	(2) Not distribute, dispense or sell outside of this state any legend 780
947	947	drugs that are imported into this state under the program; and 781 Governor's Bill No. 5018
948	948
949	949
950	950
951	951	LCO No. 628 28 of 38
952	952
953	953	(3) Maintain the following information and documentation and, 782
954	954	upon request by the Commissioner of Consumer Protection, submit 783
955	955	such information and documentation to the commissioner for each 784
956	956	legend drug that such participating Canadian supplier exports into this 785
957	957	state under the program: 786
958	958	(A) The original source of such legend drug, including, but not 787
959	959	limited to: 788
960	960	(i) The name of the manufacturer of such legend drug; 789
961	961	(ii) The date on which such legend drug was manufactured; and 790
962	962	(iii) The location where such legend drug was manufactured; 791
963	963	(B) The date on which such legend drug was shipped to a 792
964	964	participating wholesaler; 793
965	965	(C) The quantity of such legend drug that was shipped to a 794
966	966	participating wholesaler; 795
967	967	(D) The quantity of each lot of such legend drug that such 796
968	968	participating Canadian supplier originally received and the source of 797
969	969	such lot; 798
970	970	(E) The lot or control number and the batch number assigned to such 799
971	971	legend drug by the manufacturer; and 800
972	972	(F) Such additional information and documentation that the 801
973	973	commissioner deems necessary to ensure the protection of the public 802
974	974	health. 803
975	975	Sec. 14. (NEW) (Effective July 1, 2020) (a) The Commissioner of 804
976	976	Consumer Protection shall issue a written order: 805
977	977	(1) Suspending importation and distribution of a legend drug under 806
978	978	the program if the commissioner discovers that such distribution or 807
979	979	importation violates any provision of sections 11 to 13, inclusive, of this 808
980	980	act or any other applicable state or federal law or regulation; 809 Governor's Bill No. 5018
981	981
982	982
983	983
984	984	LCO No. 628 29 of 38
985	985
986	986	(2) Suspending all importation and distribution of legend drugs by a 810
987	987	participating wholesaler under the program if the commissioner 811
988	988	discovers that the participating wholesaler has violated any provision 812
989	989	of section 11 or 12 of this act or any other applicable state or federal law 813
990	990	or regulation; 814
991	991	(3) Suspending all importation and distribution of legend drugs by a 815
992	992	participating Canadian supplier under the program if the commissioner 816
993	993	discovers that the participating Canadian supplier has violated any 817
994	994	provision of section 11 or 13 of this act or any other applicable state or 818
995	995	federal law or regulation; or 819
996	996	(4) Requiring the recall or seizure of any legend drug that was 820
997	997	imported and distributed under the program and has been identified as 821
998	998	adulterated, within the meaning of section 21a-105 of the general 822
999	999	statutes, or misbranded. 823
1000	1000	(b) The Commissioner of Consumer Protection shall send a notice to 824
1001	1001	each participating Canadian supplier and participating wholesaler 825
1002	1002	affected by an order issued pursuant to subsection (a) of this section 826
1003	1003	notifying such participating Canadian supplier or participating 827
1004	1004	wholesaler that: 828
1005	1005	(1) The commissioner has issued such order, and providing the legal 829
1006	1006	and factual basis for such order; and 830
1007	1007	(2) Such participating Canadian supplier or participating wholesaler 831
1008	1008	may request, in writing, a hearing before the commissioner, provided 832
1009	1009	such request is received by the commissioner not later than thirty days 833
1010	1010	after the date of such notice. 834
1011	1011	(c) If a participating Canadian supplier or participating wholesaler 835
1012	1012	timely requests a hearing pursuant to subsection (b) of this section, the 836
1013	1013	Commissioner of Consumer Protection shall, not later than thirty days 837
1014	1014	after the receipt of the request, convene the hearing as a contested case 838
1015	1015	in accordance with the provisions of chapter 54 of the general statutes. 839
1016	1016	Not later than sixty days after the receipt of such request, the 840 Governor's Bill No. 5018
1017	1017
1018	1018
1019	1019
1020	1020	LCO No. 628 30 of 38
1021	1021
1022	1022	commissioner shall issue a final decision vacating, modifying or 841
1023	1023	affirming the commissioner's order. The participating Canadian 842
1024	1024	supplier or participating wholesaler aggrieved by such final decision 843
1025	1025	may appeal such decision in accordance with the provisions of section 844
1026	1026	4-183 of the general statutes. 845
1027	1027	Sec. 15. (NEW) (Effective July 1, 2020) The Commissioner of Consumer 846
1028	1028	Protection may, in consultation with the Commissioner of Public 847
1029	1029	Health, adopt regulations in accordance with the provisions of chapter 848
1030	1030	54 of the general statutes to implement the provisions of sections 10 to 849
1031	1031	14, inclusive, of this act. 850
1032	1032	Sec. 16. Section 38a-8b of the general statutes is repealed and the 851
1033	1033	following is substituted in lieu thereof (Effective January 1, 2021): 852
1034	1034	(a) For the purposes of this section: 853
1035	1035	(1) "Attachment point" means the dollar value of claims incurred by 854
1036	1036	a policyholder at which the insurer that issues or delivers a medical 855
1037	1037	stop-loss insurance policy to the policyholder incurs liability to such 856
1038	1038	policyholder for payment under such medical stop-loss insurance 857
1039	1039	policy; 858
1040	1040	(2) "Employee" has the same meaning as provided in section 38a-564; 859
1041	1041	(3) "Expected claims" means the dollar value of claims that, in the 860
1042	1042	absence of a medical stop-loss insurance policy, the policyholder of a 861
1043	1043	medical stop-loss insurance policy is projected to incur under such 862
1044	1044	policyholder's health benefit plan; 863
1045	1045	(4) "Lasering" means assigning a different attachment point or 864
1046	1046	deductible, or denying coverage altogether, under a medical stop-loss 865
1047	1047	insurance policy for an enrollee or a dependent because the enrollee or 866
1048	1048	dependent has a high-cost preexisting condition or another identified 867
1049	1049	risk; 868
1050	1050	(5) "Medical stop-loss insurance" means stop-loss insurance 869
1051	1051	purchased by a person, other than a health carrier or health care 870 Governor's Bill No. 5018
1052	1052
1053	1053
1054	1054
1055	1055	LCO No. 628 31 of 38
1056	1056
1057	1057	provider, and providing coverage for catastrophic, excess or unexpected 871
1058	1058	losses incurred by the policyholder, and due and owing to a third party, 872
1059	1059	under a health benefit plan not providing coverage for retirees; 873
1060	1060	(6) "Medical stop-loss insurer" means an insurer that is licensed 874
1061	1061	pursuant to section 38a-41 to sell, issue and deliver medical stop-loss 875
1062	1062	insurance in this state; 876
1063	1063	(7) "Retiree stop-loss insurance" means stop-loss insurance purchased 877
1064	1064	by a person, other than a health carrier or health care provider, and 878
1065	1065	providing coverage for catastrophic, excess or unexpected losses 879
1066	1066	incurred by the policyholder, and due and owing to a third party, under 880
1067	1067	a health benefit plan providing coverage for retirees; and 881
1068	1068	(8) "Stop-loss insurance" means insurance, other than reinsurance, 882
1069	1069	providing coverage for catastrophic, excess or unexpected losses 883
1070	1070	incurred by the policyholder, and due and owing to a third party, under 884
1071	1071	another insurance policy or a health benefit plan. 885
1072	1072	(b) No [stop loss] stop-loss insurance policy [may] shall be issued or 886
1073	1073	delivered in this state unless a copy of the [stop loss] stop-loss insurance 887
1074	1074	policy form has been submitted to, and approved by, the Insurance 888
1075	1075	Commissioner. [pursuant to regulations that the commissioner may 889
1076	1076	adopt in accordance with chapter 54. Such regulations, if adopted, shall 890
1077	1077	include, but need not be limited to, a definition of a stop loss policy and 891
1078	1078	the standards for filing and review of stop loss policies.] 892
1079	1079	(c) (1) Except as provided in subdivision (4) of subsection (d) of this 893
1080	1080	section, no medical stop-loss insurer shall issue or deliver, and the 894
1081	1081	Insurance Commissioner shall not approve, a medical stop-loss 895
1082	1082	insurance policy in this state on or after January 1, 2021, if the medical 896
1083	1083	stop-loss insurance policy: 897
1084	1084	(A) Imposes an annual attachment point that is less than twenty 898
1085	1085	thousand dollars for claims incurred per enrolled employee or 899
1086	1086	dependent; 900 Governor's Bill No. 5018
1087	1087
1088	1088
1089	1089
1090	1090	LCO No. 628 32 of 38
1091	1091
1092	1092	(B) Imposes an annual aggregate attachment point: 901
1093	1093	(i) That is less than the greatest of the following amounts for an 902
1094	1094	insured group consisting of not more than fifty employees, as calculated 903
1095	1095	in the manner set forth in subdivision (2) of this subsection: 904
1096	1096	(I) Four thousand dollars multiplied by the number of employees in 905
1097	1097	such insured group; 906
1098	1098	(II) One hundred twenty per cent of the expected claims for such 907
1099	1099	insured group; or 908
1100	1100	(III) Twenty thousand dollars; or 909
1101	1101	(ii) That is less than one hundred ten per cent of the expected claims 910
1102	1102	for an insured group consisting of more than fifty employees, as 911
1103	1103	calculated in the manner set forth in subdivision (2) of this subsection; 912
1104	1104	(C) Provides direct coverage for an enrollee's or dependent's health 913
1105	1105	care expenses; 914
1106	1106	(D) Provides for a determination regarding whether a benefit is: 915
1107	1107	(i) Medically necessary; 916
1108	1108	(ii) Usual or customary; or 917
1109	1109	(iii) Experimental or investigational; 918
1110	1110	(E) Imposes a case management requirement or an annual dollar 919
1111	1111	limitation for an enrolled employee, dependent or benefit; 920
1112	1112	(F) Requires an enrolled employee or dependent to use a provider 921
1113	1113	network or provides a benefit incentive for an enrolled employee or 922
1114	1114	dependent to use a provider participating in a provider network; 923
1115	1115	(G) Provides the medical stop-loss insurer with a right to examine an 924
1116	1116	enrolled employee or dependent; 925
1117	1117	(H) Permits the medical stop-loss insurer to: 926 Governor's Bill No. 5018
1118	1118
1119	1119
1120	1120
1121	1121	LCO No. 628 33 of 38
1122	1122
1123	1123	(i) Deny a claim if the policyholder is legally obligated to pay the 927
1124	1124	claim under such policyholder's health benefit plan; 928
1125	1125	(ii) Rescind such medical stop-loss insurance policy for any reason 929
1126	1126	other than fraud or intentional misrepresentation; 930
1127	1127	(iii) Terminate such medical stop-loss insurance policy, in the sole 931
1128	1128	discretion of such medical stop-loss insurer, in any manner that is 932
1129	1129	inconsistent with applicable laws concerning cancellation or 933
1130	1130	nonrenewal of medical stop-loss insurance policies; or 934
1131	1131	(iv) Increase the rates imposed under such medical stop-loss 935
1132	1132	insurance policy, in the sole discretion of such medical stop-loss insurer, 936
1133	1133	during the term of such medical stop-loss insurance policy; 937
1134	1134	(I) Requires an enrolled employee to be actively at work; or 938
1135	1135	(J) Contains any provision that is misleading, deceptive or contrary 939
1136	1136	to any provision of the general statutes or the public interest. 940
1137	1137	(2) (A) For the purposes of subparagraph (B) of subdivision (1) of this 941
1138	1138	subsection, the number of employees in an insured group shall be 942
1139	1139	determined by adding: 943
1140	1140	(i) The number of the policyholder's full-time employees for each 944
1141	1141	month who work a normal work week of thirty hours or more; and 945
1142	1142	(ii) The number of the policyholder's full-time equivalent employees, 946
1143	1143	calculated for each month by dividing by one hundred twenty the 947
1144	1144	aggregate number of hours worked for such month by employees who 948
1145	1145	work a normal work week of less than thirty hours, and averaging such 949
1146	1146	total for the calendar year. 950
1147	1147	(B) If a policyholder was not in existence throughout the preceding 951
1148	1148	calendar year, the number of employees shall be based on the average 952
1149	1149	number of employees that such policyholder reasonably expects to 953
1150	1150	employ in the current calendar year. 954 Governor's Bill No. 5018
1151	1151
1152	1152
1153	1153
1154	1154	LCO No. 628 34 of 38
1155	1155
1156	1156	(d) Each insurer that underwrites a medical stop-loss insurance 955
1157	1157	policy issued or delivered in this state on or after January 1, 2021, may 956
1158	1158	use lasering in underwriting such medical stop-loss insurance policy, 957
1159	1159	provided: 958
1160	1160	(1) If such insurer uses lasering in underwriting such medical stop-959
1161	1161	loss insurance policy, such insurer and any insurance producer who 960
1162	1162	sells, solicits or negotiates such medical stop-loss insurance policy on 961
1163	1163	behalf of such insurer includes in each application for coverage under 962
1164	1164	such medical stop-loss insurance policy: 963
1165	1165	(A) A statement disclosing the increased financial risk that each 964
1166	1166	prospective policyholder under such medical stop-loss insurance policy 965
1167	1167	will bear because such insurer intends to use lasering in underwriting 966
1168	1168	such medical stop-loss insurance policy, and any alternatives available 967
1169	1169	to each such prospective policyholder with respect to such insurer's 968
1170	1170	intended use of lasering in underwriting such medical stop-loss 969
1171	1171	insurance policy; 970
1172	1172	(B) A statement by such insurer or insurance producer, as applicable, 971
1173	1173	affirming that such insurer or insurance producer fully explained to 972
1174	1174	each prospective policyholder under such medical stop-loss insurance 973
1175	1175	policy the increased financial risk described in subparagraph (A) of this 974
1176	1176	subdivision and that each such prospective policyholder understands 975
1177	1177	such increased financial risk; and 976
1178	1178	(C) The signature of such insurer, insurance producer and each 977
1179	1179	prospective policyholder below the statement required under 978
1180	1180	subparagraph (B) of this subdivision; 979
1181	1181	(2) If such insurer uses lasering on the effective date of such medical 980
1182	1182	stop-loss insurance policy, such insurer shall not change such lasering 981
1183	1183	during the term of such medical stop-loss insurance policy; 982
1184	1184	(3) If such insurer does not use lasering on the effective date of such 983
1185	1185	medical stop-loss insurance policy, such insurer shall not use lasering 984
1186	1186	during the term of such medical stop-loss insurance policy; and 985 Governor's Bill No. 5018
1187	1187
1188	1188
1189	1189
1190	1190	LCO No. 628 35 of 38
1191	1191
1192	1192	(4) The attachment point for an enrolled employee under such 986
1193	1193	medical stop-loss insurance policy shall not exceed an amount that is 987
1194	1194	equal to three hundred per cent of the attachment point for such medical 988
1195	1195	stop-loss insurance policy. 989
1196	1196	(e) No retiree stop-loss insurance policy issued or delivered in this 990
1197	1197	state on or after January 1, 2021, shall be subject to the provisions of 991
1198	1198	subsection (c) or (d) of this section, and the Insurance Commissioner 992
1199	1199	shall review and approve, on a case-by case basis, such retiree stop-loss 993
1200	1200	insurance policies for issuance and delivery in this state on or after said 994
1201	1201	date. 995
1202	1202	(f) The Insurance Commissioner may adopt regulations, in 996
1203	1203	accordance with chapter 54, to carry out the purposes of this section. 997
1204	1204	Sec. 17. Subparagraph (C) of subdivision (3) of subsection (m) of 998
1205	1205	section 5-259 of the 2020 supplement to the general statutes is repealed 999
1206	1206	and the following is substituted in lieu thereof (Effective January 1, 2021): 1000
1207	1207	(C) The Comptroller may offer to nonstate public employers that 1001
1208	1208	choose to purchase prescription drugs pursuant to subparagraph (A) of 1002
1209	1209	this subdivision the option to purchase [stop loss] stop-loss coverage 1003
1210	1210	from an insurer at a rate negotiated by the Comptroller. 1004
1211	1211	Sec. 18. Subdivision (1) of subsection (c) of section 7-464 of the general 1005
1212	1212	statutes is repealed and the following is substituted in lieu thereof 1006
1213	1213	(Effective January 1, 2021): 1007
1214	1214	(1) In no event shall any commercial insurance company which 1008
1215	1215	provides health insurance benefits to the employees of a town, city or 1009
1216	1216	borough and their covered dependents and family members, including, 1010
1217	1217	but not limited to, [stop loss] stop-loss insurance beyond a municipal 1011
1218	1218	self-funded medical expense amount, be entitled to any reimbursement 1012
1219	1219	from a tortfeasor recovery. The provisions of this subsection shall be 1013
1220	1220	construed to only permit a self-insured town, city or borough to recover 1014
1221	1221	medical expenses paid from its own revenues. The provisions of this 1015
1222	1222	subsection shall not be construed to permit a self-insured town, city or 1016 Governor's Bill No. 5018
1223	1223
1224	1224
1225	1225
1226	1226	LCO No. 628 36 of 38
1227	1227
1228	1228	borough to recover medical expenses paid from an insured plan, 1017
1229	1229	whether insured in whole or in part. 1018
1230	1230	Sec. 19. Subparagraph (F) of subdivision (18) of section 38a-465 of the 1019
1231	1231	general statutes is repealed and the following is substituted in lieu 1020
1232	1232	thereof (Effective January 1, 2021): 1021
1233	1233	(F) An authorized or eligible insurer that provides [stop loss] stop-1022
1234	1234	loss coverage to a provider, purchaser, financing entity, special purpose 1023
1235	1235	entity or related provider trust; 1024
1236	1236	Sec. 20. Subsection (c) of section 38a-465d of the general statutes is 1025
1237	1237	repealed and the following is substituted in lieu thereof (Effective January 1026
1238	1238	1, 2021): 1027
1239	1239	(c) Except as otherwise required or permitted by law, no person, 1028
1240	1240	including, but not limited to, a provider, broker, insurance company, 1029
1241	1241	insurance producer, information bureau, rating agency or company, or 1030
1242	1242	any other person with actual knowledge of an insured's identity, shall 1031
1243	1243	disclose such identity or information where there is a reasonable basis 1032
1244	1244	to conclude such information could be used to identify the insured or 1033
1245	1245	the insured's financial or medical information to any other person unless 1034
1246	1246	such disclosure: (1) Is necessary to effect a life settlement contract 1035
1247	1247	between the owner and a provider and the owner and insured have 1036
1248	1248	provided prior written consent to such disclosure; (2) is provided in 1037
1249	1249	response to an investigation or examination by the commissioner or any 1038
1250	1250	other governmental office or agency or pursuant to the requirements of 1039
1251	1251	section 38a-465i; (3) is necessary to effectuate the sale of life settlement 1040
1252	1252	contracts or interests therein as investments, provided the sale is 1041
1253	1253	conducted in accordance with applicable state and federal securities 1042
1254	1254	laws, and provided further the owner and the insured have both 1043
1255	1255	provided prior written consent to the disclosure; (4) is a term of or 1044
1256	1256	condition to the transfer of a policy by one provider to another provider, 1045
1257	1257	in which case the provider receiving such information shall comply with 1046
1258	1258	the confidentiality requirements specified in this subsection; (5) is 1047
1259	1259	necessary to allow the provider or broker or their authorized 1048 Governor's Bill No. 5018
1260	1260
1261	1261
1262	1262
1263	1263	LCO No. 628 37 of 38
1264	1264
1265	1265	representatives to make contacts for the purpose of determining health 1049
1266	1266	status. For the purpose of this section, "authorized representative" does 1050
1267	1267	not include any person who has or may have a financial interest in the 1051
1268	1268	settlement contract other than a provider, licensed broker, financing 1052
1269	1269	entity, related provider trust or special purpose entity. Each provider or 1053
1270	1270	broker shall require its authorized representative to agree in writing to 1054
1271	1271	comply with the privacy provisions of this part; or (6) is required to 1055
1272	1272	purchase [stop loss] stop-loss coverage. 1056
1273	1273	Sec. 21. Subparagraph (A) of subdivision (2) of subsection (b) of 1057
1274	1274	section 38a-478l of the general statutes is repealed and the following is 1058
1275	1275	substituted in lieu thereof (Effective January 1, 2021): 1059
1276	1276	(A) "State medical loss ratio" means the ratio of incurred claims to 1060
1277	1277	earned premiums for the prior calendar year for managed care plans 1061
1278	1278	issued in the state. Claims shall be limited to medical expenses for 1062
1279	1279	services and supplies provided to enrollees and shall not include 1063
1280	1280	expenses for [stop loss] stop-loss coverage, reinsurance, enrollee 1064
1281	1281	educational programs or other cost containment programs or features; 1065
1282	1282	Sec. 22. Subsection (c) of section 38a-720h of the general statutes is 1066
1283	1283	repealed and the following is substituted in lieu thereof (Effective January 1067
1284	1284	1, 2021): 1068
1285	1285	(c) The third-party administrator shall disclose to the insurer or other 1069
1286	1286	person utilizing the services of the third-party administrator all charges, 1070
1287	1287	fees and commissions that the third-party administrator receives arising 1071
1288	1288	from services it provides for the insurer or other person utilizing the 1072
1289	1289	services of the third-party administrator, including any fees or 1073
1290	1290	commissions paid by insurers providing reinsurance or [stop loss] stop-1074
1291	1291	loss coverage. 1075
1292	1292	This act shall take effect as follows and shall amend the following
1293	1293	sections:
1294	1294
1295	1295	Section 1 July 1, 2020 19a-754a
1296	1296	Sec. 2 July 1, 2020 New section
1297	1297	Sec. 3 July 1, 2020 New section Governor's Bill No. 5018
1298	1298
1299	1299
1300	1300
1301	1301	LCO No. 628 38 of 38
1302	1302
1303	1303	Sec. 4 July 1, 2020 New section
1304	1304	Sec. 5 July 1, 2020 New section
1305	1305	Sec. 6 July 1, 2020 New section
1306	1306	Sec. 7 July 1, 2020 New section
1307	1307	Sec. 8 July 1, 2020 New section
1308	1308	Sec. 9 July 1, 2020 New section
1309	1309	Sec. 10 July 1, 2020 New section
1310	1310	Sec. 11 July 1, 2020 New section
1311	1311	Sec. 12 July 1, 2020 New section
1312	1312	Sec. 13 July 1, 2020 New section
1313	1313	Sec. 14 July 1, 2020 New section
1314	1314	Sec. 15 July 1, 2020 New section
1315	1315	Sec. 16 January 1, 2021 38a-8b
1316	1316	Sec. 17 January 1, 2021 5-259(m)(3)(C)
1317	1317	Sec. 18 January 1, 2021 7-464(c)(1)
1318	1318	Sec. 19 January 1, 2021 38a-465(18)(F)
1319	1319	Sec. 20 January 1, 2021 38a-465d(c)
1320	1320	Sec. 21 January 1, 2021 38a-478l(b)(2)(A)
1321	1321	Sec. 22 January 1, 2021 38a-720h(c)
1322	1322
1323	1323	Statement of Purpose:
1324	1324	To implement the Governor's budget recommendations.
1325	1325	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
1326	1326	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
1327	1327	underlined.]
1328	1328