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General Assembly Raised Bill No. 328
February Session, 2020
LCO No. 1988
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING HE ALTH CARE COST GROWT H
BENCHMARKS, CANADIAN DRUG REIMPORTATION, STOP -LOSS
INSURANCE AND REINSU RANCE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 19a-754a of the 2020 supplement to the general 1
statutes is repealed and the following is substituted in lieu thereof 2
(Effective July 1, 2020): 3
(a) There is established an Office of Health Strategy, which shall be 4
within the Department of Public Health for administrative purposes 5
only. The department head of said office shall be the executive director 6
of the Office of Health Strategy, who shall be appointed by the Governor 7
in accordance with the provisions of sections 4-5 to 4-8, inclusive, with 8
the powers and duties therein prescribed. 9
(b) The Office of Health Strategy shall be responsible for the 10
following: 11
(1) Developing and implementing a comprehensive and cohesive 12
health care vision for the state, including, but not limited to, a 13 Raised Bill No. 328
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coordinated state health care cost containment strategy; 14
(2) Promoting effective health planning and the provision of quality 15
health care in the state in a manner that ensures access for all state 16
residents to cost-effective health care services, avoids the duplication of 17
such services and improves the availability and financial stability of 18
such services throughout the state; 19
(3) [Directing] (A) Developing, innovating, directing and overseeing 20
health care delivery and payment models in the state that reduce health 21
care cost growth and improve the quality of patient care, including, but 22
not limited to, the State Innovation Model Initiative and related 23
successor initiatives, (B) setting an annual health care cost growth 24
benchmark and primary care target pursuant to section 3 of this act, (C) 25
developing and adopting health care quality benchmarks pursuant to 26
section 8 of this act, (D) enhancing the transparency of health care 27
entities, as defined in section 2 of this act, (E) monitoring the 28
development of accountable care organizations and patient-centered 29
medical homes in the state, and (F) monitoring the adoption of 30
alternative payment methodologies in the state; 31
(4) (A) Coordinating the state's health information technology 32
initiatives, (B) seeking funding for and overseeing the planning, 33
implementation and development of policies and procedures for the 34
administration of the all-payer claims database program established 35
under section 19a-775a, (C) establishing and maintaining a consumer 36
health information Internet web site under section 19a-755b, and (D) 37
designating an unclassified individual from the office to perform the 38
duties of a health information technology officer as set forth in sections 39
17b-59f and 17b-59g; 40
(5) Directing and overseeing the Health Systems Planning Unit 41
established under section 19a-612 and all of its duties and 42
responsibilities as set forth in chapter 368z; and 43
(6) Convening forums and meetings with state government and 44
external stakeholders, including, but not limited to, the Connecticut 45 Raised Bill No. 328
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Health Insurance Exchange, to discuss health care issues designed to 46
develop effective health care cost and quality strategies. 47
(c) The Office of Health Strategy shall constitute a successor, in 48
accordance with the provisions of sections 4-38d, 4-38e and 4-39, to the 49
functions, powers and duties of the following: 50
(1) The Connecticut Health Insurance Exchange, established 51
pursuant to section 38a-1081, relating to the administration of the all-52
payer claims database pursuant to section 19a-755a; and 53
(2) The Office of the Lieutenant Governor, relating to the (A) 54
development of a chronic disease plan pursuant to section 19a-6q, (B) 55
housing, chairing and staffing of the Health Care Cabinet pursuant to 56
section 19a-725, and (C) (i) appointment of the health information 57
technology officer, and (ii) oversight of the duties of such health 58
information technology officer as set forth in sections 17b-59f and 17b-59
59g. 60
(d) Any order or regulation of the entities listed in subdivisions (1) 61
and (2) of subsection (c) of this section that is in force on July 1, 2018, 62
shall continue in force and effect as an order or regulation until 63
amended, repealed or superseded pursuant to law. 64
Sec. 2. (NEW) (Effective July 1, 2020) For the purposes of this section 65
and sections 3 to 9, inclusive, of this act: 66
(1) "Device manufacturer" means a manufacturer that manufactures 67
a device for which annual sales in this state exceed ten million dollars; 68
(2) "Drug manufacturer" means the manufacturer of a drug that is: 69
(A) Included in information and data submitted by a health carrier 70
pursuant to section 38a-479qqq of the general statutes; (B) studied or 71
listed pursuant to subsection (c) or (d) of section 19a-754b of the general 72
statutes; or (C) in a therapeutic class of drugs that the executive director 73
determines, through public or private reports, has had a substantial 74
impact on prescription drug expenditures, net of rebates, as a 75 Raised Bill No. 328
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percentage of total health care expenditures; 76
(3) "Executive director" means the executive director of the office; 77
(4) "Health care cost growth benchmark" means the annual 78
benchmark established pursuant to section 3 of this act; 79
(5) "Health care entity" means an accountable care organization, 80
ambulatory surgical center, clinic, hospital or provider organization in 81
this state, other than a health care provider contracting unit that, for a 82
given calendar year: (A) Has a patient panel of not more than ten 83
thousand patients; or (B) represents health care providers who 84
collectively receive less than twenty million dollars in net patient service 85
revenue from health carriers; 86
(6) "Health care facility" has the same meaning as provided in section 87
19a-630 of the general statutes; 88
(7) "Health care quality benchmark" means an annual benchmark 89
established pursuant to section 8 of this act; 90
(8) "Health care provider" has the same meaning as provided in 91
section 19a-17b of the general statutes; 92
(9) "Health status adjusted total medical expenses" means: (A) The 93
total cost of care for the patient population of a provider organization 94
with at least thirty-six thousand member months for a given calendar 95
year, which cost (i) is calculated for such year on the basis of the allowed 96
claims for all categories of medical expenses and all nonclaims 97
payments for such year, including, but not limited to, cost-sharing 98
payments, adjusted by health status and expressed on a per member, 99
per month basis for all members in this state, (ii) is reported to the 100
executive director separately for Medicaid, Medicare and 101
nongovernment health plans for such year, and (iii) discloses the health 102
adjustment risk score and the version of the risk adjustment tool used to 103
calculate such score for such provider organization for such year; and 104
(B) the total aggregate medical expenses for all health care providers and 105 Raised Bill No. 328
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provider organizations with fewer than thirty-six thousand member 106
months for a given calendar year; 107
(10) "Hospital outpatient department" has the same meaning as such 108
term is used in Section 413.65 of Title 42 of the Code of Federal 109
Regulations, as amended from time to time; 110
(11) "Institutional provider" means any health care provider that 111
provides skilled nursing facility services, or acute, chronic or 112
rehabilitation hospital services, in this state; 113
(12) "Office" means the Office of Health Strategy established under 114
section 19a-754a of the general statutes, as amended by this act; 115
(13) "Other entity" means a device manufacturer, drug manufacturer 116
or pharmacy benefits manager; 117
(14) "Payer" means a payer that, during a given calendar year, pays 118
health care providers for health care services on behalf of, or pays 119
pharmacies for prescription drugs dispensed to, more than ten 120
thousand individuals in this state; 121
(15) "Pharmacy benefits manager" has the same meaning as provided 122
in section 38a-479ooo of the general statutes; 123
(16) "Primary care target" means the annual target established 124
pursuant to section 3 of this act; 125
(17) "Provider organization" means a group of persons, including, but 126
not limited to, an accountable care organization, association, business 127
trust, corporation, independent practice association, partnership, 128
physician organization, physician-hospital organization or provider 129
network, that is in the business of health care delivery or management 130
in this state and represents a health care provider in contracting with a 131
payer for payment for health care services; and 132
(18) "Total health care expenditures" means the per capita sum of all 133
health care expenditures in this state from public and private sources 134 Raised Bill No. 328
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for a given calendar year, including: (A) All categories of medical 135
expenses and all nonclaims payments to health care providers and 136
health care facilities, as included in the health status adjusted total 137
medical expenses reported, if any, by the executive director pursuant to 138
subsection (c) of section 5 of this act; (B) all patient cost-sharing 139
amounts, including, but not limited to, deductibles and copayments; (C) 140
the net cost of nongovernment health insurance; (D) prescription drug 141
expenditures net of rebates and discounts; (E) device manufacturer 142
expenditures net of rebates and discounts; and (F) any other 143
expenditures specified by the executive director. 144
Sec. 3. (NEW) (Effective July 1, 2020) (a) Not later than December 1, 145
2020, and annually thereafter, the executive director shall establish a 146
health care cost growth benchmark for the calendar year next 147
succeeding. Such health care cost growth benchmark shall address the 148
average growth in total health care expenditures across all payers and 149
populations in this state for such year, and the executive director shall 150
include within such health care cost growth benchmark a primary care 151
target to ensure primary care spending as a percentage of total health 152
care expenditures reaches a goal of ten per cent for the calendar year 153
beginning January 1, 2025. 154
(b) In establishing each health care cost growth benchmark pursuant 155
to subsection (a) of this section, the executive director shall, at a 156
minimum: 157
(1) Consider any change in the consumer price index for all urban 158
consumers in the northeast region from the preceding calendar year, 159
and the most recent publicly available information concerning the 160
growth rate of the gross state product; 161
(2) Evaluate current primary care spending as a percentage of total 162
health care expenditures; and 163
(3) (A) Hold an informational public hearing concerning such health 164
care cost growth benchmark: 165 Raised Bill No. 328
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(i) At a time and place designated by the executive director in a notice 166
prominently posted by the executive director on the office's Internet 167
web site; 168
(ii) In a form and manner prescribed by the executive director; and 169
(iii) On the basis of the most recent report, if any, prepared by the 170
executive director pursuant to subsection (c) of section 5 of this act, and 171
any other information that the executive director, in the executive 172
director's discretion, deems relevant for the purposes of such hearing. 173
(B) Notwithstanding subparagraph (A) of this subdivision, the 174
executive director shall not be required to hold an informational public 175
hearing concerning a health care cost growth benchmark for any 176
calendar year beginning on or after January 1, 2022, if such health care 177
cost growth benchmark is the same as the health care cost growth 178
benchmark for the preceding calendar year. 179
(c) If the executive director determines, after any informational public 180
hearing held pursuant to subdivision (3) of subsection (b) of this section, 181
that a modification to the health care cost growth benchmark is, in the 182
executive director's discretion, reasonably warranted, the executive 183
director may modify such health care cost growth benchmark. The 184
executive director need not hold an additional informational public 185
hearing concerning such modified health care cost growth benchmark. 186
(d) The executive director shall post each health care cost growth 187
benchmark on the office's Internet web site. 188
(e) The executive director may enter into such contractual agreements 189
as may be necessary to carry out the purposes of this section, including, 190
but not limited to, contractual agreements with actuarial, economic and 191
other experts and consultants to assist the executive director in 192
establishing health care cost growth benchmarks. 193
Sec. 4. (NEW) (Effective July 1, 2020) (a) (1) Not later than May 1, 2022, 194
and annually thereafter, the executive director shall hold an 195 Raised Bill No. 328
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informational public hearing to compare the growth in total health care 196
expenditures during the preceding calendar year to the health care cost 197
growth benchmark established pursuant to section 3 of this act for such 198
year. Such hearing shall include an examination of: 199
(A) The report, if any, most recently prepared by the executive 200
director pursuant to subsection (c) of section 5 of this act; 201
(B) The expenditures of health care entities and payers, including, but 202
not limited to, health care cost trends, primary care spending as a 203
percentage of total health care expenditures, and the factors 204
contributing to such costs and expenditures; 205
(C) Whether one category of expenditures may be offset by savings 206
in another category of expenditures; and 207
(D) Any other matters that the executive director, in the executive 208
director's discretion, deems relevant for the purposes of this section. 209
(2) The executive director may require that any health care entity or 210
payer that is found to be a significant contributor to health care cost 211
growth in this state during the preceding calendar year participate in 212
such hearing. Each such health care entity or payer that is required to 213
participate in such hearing shall provide testimony on issues identified 214
by the executive director, and provide additional information on actions 215
taken to reduce such health care entity's contribution to future state-216
wide health care costs and expenditures. 217
(b) Not later than October 1, 2022, and annually thereafter, the 218
executive director shall prepare and submit a report, in accordance with 219
section 11-4a of the general statutes, to the joint standing committees of 220
the General Assembly having cognizance of matters relating to 221
insurance and public health. Such report shall be based on the executive 222
director's analysis of the information submitted during the most recent 223
informational public hearing conducted pursuant to subsection (a) of 224
this section and any other information that the executive director, in the 225
executive director's discretion, deems relevant for the purposes of this 226 Raised Bill No. 328
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section, and shall: 227
(1) Describe health care spending trends in this state, including, but 228
not limited to, trends in primary care spending as a percentage of total 229
health care expenditures, and the factors underlying such trends; and 230
(2) Disclose the executive director's recommendations, if any, 231
concerning strategies to increase the efficiency of this state's health care 232
system, including, but not limited to, any recommended legislation 233
concerning this state's health care system. 234
Sec. 5. (NEW) (Effective July 1, 2020) (a) Not later than March 1, 2022, 235
and annually thereafter, each institutional provider, on behalf of such 236
institutional provider and its parent organization and affiliated entities, 237
health care provider that is not an institutional provider and provider 238
organization in this state, shall submit to the executive director, for the 239
preceding calendar year: 240
(1) Data concerning: 241
(A) The utilization of health care services provided by such provider 242
or organization; 243
(B) The charges, prices imposed and payments received by such 244
provider or organization for such services; 245
(C) The costs incurred, and revenues earned, by such provider or 246
organization in providing such services; and 247
(D) Any other matter that the executive director deems relevant for 248
the purposes of this section; and 249
(2) If such provider is a hospital, the data described in subdivision (1) 250
of this subsection, and such additional data, information and documents 251
designated by the executive director, including, but not limited to, 252
charge masters, cost data, audited financial statements and merged 253
billing and discharge data, provided such provider shall not be required 254
to submit any data contained in a report that is filed pursuant to 255 Raised Bill No. 328
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chapters 368aa to 368ll, inclusive, of the general statutes and available to 256
the executive director. 257
(b) The executive director shall establish standards to ensure that the 258
data, information and documents submitted to the executive director 259
pursuant to subsection (a) of this section are submitted to the executive 260
director in a uniform manner. Such standards shall enable the executive 261
director to identify, on a patient-centered and health care provider-262
specific basis, state-wide and regional trends in the availability, cost, 263
price and utilization of medical, surgical, diagnostic and ancillary 264
services and prescription drugs provided by hospital outpatient 265
departments, acute care hospitals, chronic disease hospitals, 266
rehabilitation hospitals and other specialty hospitals, clinics, including, 267
but not limited to, psychiatric clinics, urgent care facilities and facilities 268
providing ambulatory care. Such standards may require hospitals to 269
submit such data, information and documents to the executive director 270
in an electronic form, provided such standards shall provide for a 271
waiver of such requirement if such waiver is reasonable in the judgment 272
of the executive director. 273
(c) (1) Not later than December 1, 2021, and annually thereafter, the 274
executive director shall prepare, to the extent practicable, and post on 275
the office's Internet web site, a report concerning health status adjusted 276
total medical expenses for the preceding calendar year, including, but 277
not limited to, a breakdown of such health status adjusted total medical 278
expenses by: 279
(A) Major service category; 280
(B) Payment methodology; 281
(C) Relative price; 282
(D) Direct hospital inpatient cost; 283
(E) Indirect hospital inpatient cost; 284
(F) Direct hospital outpatient cost; 285 Raised Bill No. 328
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(G) Indirect hospital outpatient cost; and 286
(H) Primary care spending as a percentage of total health care 287
expenditures. 288
(2) Notwithstanding subdivision (1) of this subsection, the executive 289
director shall not disclose any health care provider-specific data or 290
information unless the executive director provides at least ten days' 291
advance written notice of such disclosure to each health care provider 292
that would be affected by such disclosure. 293
(d) The executive director shall, at least annually, submit a request to 294
the federal Centers for Medicare and Medicaid Services for the health 295
status adjusted total medical expenses of provider organizations that 296
served Medicare patients during the calendar year next preceding. 297
(e) The executive director may enter into such contractual agreements 298
as may be necessary to carry out the purposes of this section, including, 299
but not limited to, contractual agreements with actuarial, economic and 300
other experts and consultants. 301
Sec. 6. (NEW) (Effective July 1, 2020) (a) (1) For each calendar year 302
beginning on or after January 1, 2022, if the executive director 303
determines that the average annual percentage change in total health 304
care expenditures for the preceding calendar year exceeded the health 305
care cost growth benchmark for such year, the executive director shall 306
identify, not later than May first of such calendar year, each health care 307
entity or payer that exceeded such health care cost growth benchmark 308
for such year. 309
(2) The executive director may require any health care entity or payer 310
that is found to be a significant contributor to health care cost growth in 311
this state during the preceding calendar year to participate in the 312
informational public hearing held pursuant to subsection (a) of section 313
4 of this act. Each such entity or payer that is required to participate in 314
such hearing shall provide testimony on issues identified by the 315
executive director, and provide additional information on actions taken 316 Raised Bill No. 328
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to reduce such entity's or payer's contribution to future state-wide 317
health care costs. 318
(b) Not later than thirty days after the executive director identifies 319
each health care entity or payer pursuant to subdivision (1) of subsection 320
(a) of this section, the executive director shall send a notice to each such 321
entity or payer. Such notice shall be in a form and manner prescribed by 322
the executive director, and disclose to each such entity or payer: 323
(1) That the executive director has identified such entity or payer 324
pursuant to subdivision (1) of subsection (a) of this section; 325
(2) The factual basis for the executive director's identification of such 326
entity or payer pursuant to subdivision (1) of subsection (a) of this 327
section; and 328
(3) That such entity or payer shall file a proposed performance 329
improvement plan pursuant to subdivision (1) of subsection (e) of this 330
section, provided such entity or payer may: 331
(A) File a request for an extension of time, or a waiver, pursuant to 332
subdivision (1) of subsection (c) of this section; and 333
(B) Request a hearing pursuant to subsection (d) of this section. 334
(c) (1) (A) Each health care entity or payer identified by the executive 335
director pursuant to subdivision (1) of subsection (a) of this section may, 336
not later than thirty days after the executive director sends a notice to 337
such entity or payer pursuant to subsection (b) of this section, file with 338
the executive director, in a form and manner prescribed by the executive 339
director, a request seeking: 340
(i) An extension of time to file a proposed performance improvement 341
plan pursuant to subdivision (1) of subsection (e) of this section; or 342
(ii) A waiver from the requirement that such entity or payer file a 343
proposed performance improvement plan pursuant to subdivision (1) 344
of subsection (e) of this section. 345 Raised Bill No. 328
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(B) Each health care entity or payer that files a request pursuant to 346
subparagraph (A) of this subdivision shall set forth in such request the 347
reasons for such request. 348
(2) Not later than thirty days after a health care entity or payer files a 349
request pursuant to subdivision (1) of this subsection, the executive 350
director shall: 351
(A) Examine the reasons set forth in the request and decide, on the 352
basis of such reasons, whether to approve or deny such request; and 353
(B) Send a notice, in a form and manner prescribed by the executive 354
director, to the entity or payer that filed such request disclosing, at a 355
minimum: 356
(i) The executive director's decision concerning such request and the 357
reasons therefor; 358
(ii) If the executive director denies such entity's or payer's request, 359
that such entity or payer may file a request for a hearing pursuant to 360
subsection (d) of this section; and 361
(iii) If such entity's or payer's request is a request for an extension of 362
time to file a proposed performance improvement plan pursuant to 363
subdivision (1) of subsection (e) of this section and the executive director 364
approves such request, the date by which such entity or payer shall file 365
such proposed performance improvement plan. 366
(d) Each health care entity or payer identified by the executive 367
director pursuant to subsection (a) of this section may, not later than 368
thirty days after the executive director sends a notice to such entity or 369
payer pursuant to subsection (b) of this section or subparagraph (B) of 370
subdivision (2) of subsection (c) of this section, as applicable, file with 371
the executive director a request for a hearing. Each hearing conducted 372
pursuant to this subsection shall be conducted in accordance with the 373
procedures for hearings on contested cases established in chapter 54 of 374
the general statutes. 375 Raised Bill No. 328
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(e) (1) Each health care entity or payer identified by the executive 376
director pursuant to subdivision (1) of subsection (a) of this section, or 377
required by the executive director pursuant to subparagraph (C)(ii)(III) 378
of subdivision (4) of subsection (f) of this section, shall, subject to the 379
provisions of subsections (b) to (d), inclusive, of this section, file with 380
the executive director a proposed performance improvement plan. Such 381
entity or payer shall file such proposed performance improvement plan, 382
which shall include an implementation timetable, with the executive 383
director, in a form and manner prescribed by the executive director, not 384
later than whichever of the following dates first occurs: 385
(A) The date that is thirty days after the date on which the executive 386
director sent a notice to such entity or payer pursuant to subsection (b) 387
of this section; 388
(B) The date that the executive director disclosed to such entity or 389
payer pursuant to subparagraph (B)(iii) of subdivision (2) of subsection 390
(c) of this section; or 391
(C) The date that is thirty days after the date on which the notice of a 392
final decision is issued following a hearing conducted pursuant to 393
subsection (d) of this section. 394
(2) (A) The executive director shall review each health care entity's 395
and payer's proposed performance improvement plan filed pursuant to 396
subdivision (1) of this subsection to determine whether, in the executive 397
director's judgment, it is reasonably likely that: 398
(i) Such proposed performance improvement plan will address the 399
cause of such entity's or payer's excessive cost growth; and 400
(ii) Such entity or payer will successfully implement such proposed 401
performance improvement plan. 402
(B) After the executive director reviews a proposed performance 403
improvement plan pursuant to subparagraph (A) of this subdivision, 404
the executive director shall: 405 Raised Bill No. 328
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(i) Approve such proposed performance improvement plan if the 406
executive director determines, in the executive director's judgment, that 407
such proposed plan satisfies the criteria established in subparagraph (A) 408
of this subdivision; or 409
(ii) Deny such proposed performance improvement plan if the 410
executive director determines, in the executive director's judgment, that 411
such proposed performance improvement plan does not satisfy the 412
criteria established in subparagraph (A) of this subdivision. 413
(C) (i) Not later than thirty days after the executive director approves 414
or denies a proposed performance improvement plan pursuant to 415
subparagraph (B) of this subdivision, the executive director shall send a 416
notice to the health care entity or payer that filed such proposed 417
performance improvement plan disclosing, at a minimum, that: 418
(I) The executive director approved such proposed performance 419
improvement plan; or 420
(II) The executive director denied such proposed performance 421
improvement plan, the reasons for such denial and that such entity or 422
payer shall file with the executive director such amendments as are 423
necessary for such proposed performance improvement plan to satisfy 424
the criteria established in subparagraph (A) of this subdivision. 425
(ii) The executive director shall post a notice on the office's Internet 426
web site disclosing: 427
(I) The name of each health care entity or payer that files, and receives 428
approval for, a proposed performance improvement plan; and 429
(II) That such health care entity or payer is implementing such 430
performance improvement plan. 431
(D) Each health care entity or payer that receives a notice from the 432
executive director pursuant to subparagraph (C)(i) of this subdivision 433
notifying such entity or payer that the executive director has denied 434
such entity's or payer's proposed performance improvement plan shall 435 Raised Bill No. 328
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file with the executive director, in a form and manner prescribed by the 436
executive director and not later than thirty days after the date that the 437
executive director sends such notice to such entity or payer, such 438
amendments as are necessary for such proposed performance 439
improvement plan to satisfy the criteria established in subparagraph (A) 440
of this subdivision. 441
(f) (1) Each health care entity or payer that receives a notice from the 442
executive director pursuant to subparagraph (C)(i) of subdivision (2) of 443
subsection (e) of this section notifying such entity or payer that the 444
executive director has approved such entity's or payer's proposed 445
performance improvement plan: 446
(A) Shall immediately make good faith efforts to implement such 447
performance improvement plan; and 448
(B) May amend such plan at any time during the implementation 449
timetable included in such performance improvement plan, provided 450
the executive director approves such amendment. 451
(2) The office may provide such assistance to each health care entity 452
or payer that the executive director, in the executive director's 453
discretion, deems necessary and appropriate to ensure that such entity 454
or payer successfully implements such entity's or payer's performance 455
improvement plan. 456
(3) Each health care entity or payer shall be subject to such additional 457
reporting requirements that the executive director, in the executive 458
director's discretion, deems necessary to ensure that such entity or payer 459
successfully implements such entity's or payer's performance 460
improvement plan. 461
(4) (A) Each health care entity or payer that files, and receives 462
approval for, a performance improvement plan pursuant to this section 463
shall, not later than thirty days after the last date specified in the 464
implementation timetable included in such performance improvement 465
plan, submit to the executive director, in a form and manner prescribed 466 Raised Bill No. 328
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by the executive director, a report regarding the outcome of such entity's 467
or payer's implementation of such performance improvement plan. 468
(B) If the executive director determines, on the basis of the report 469
submitted by a health care entity or payer pursuant to subparagraph (A) 470
of this subdivision, that such entity or payer successfully implemented 471
such entity's or payer's performance improvement plan, the executive 472
director shall: 473
(i) Send a notice to such entity or payer, in a form and manner 474
prescribed by the executive director, disclosing such determination; and 475
(ii) Remove from the office's Internet web site the notice concerning 476
such entity or payer that the executive director posted on such Internet 477
web site pursuant to subparagraph (C)(ii) of subdivision (2) of 478
subsection (e) of this section. 479
(C) If the executive director determines, on the basis of the report 480
submitted by a health care entity or payer pursuant to subparagraph (A) 481
of this subdivision, that such entity or payer failed to successfully 482
implement such entity's or payer's performance improvement plan, the 483
executive director shall: 484
(i) Send a notice to such entity or payer, in a form and manner 485
prescribed by the executive director, disclosing such determination and 486
any action taken by the executive director pursuant to clause (ii) of this 487
subparagraph; and 488
(ii) In the executive director's discretion: 489
(I) Extend the implementation timetable included in such 490
performance improvement plan; 491
(II) Require such entity or payer to file with the executive director, in 492
a form and manner prescribed by the executive director, such 493
amendments to such performance improvement plan as are, in the 494
executive director's judgment, necessary to ensure that such entity or 495
payer successfully implements such performance improvement plan; 496 Raised Bill No. 328
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(III) Require such entity or payer to file a new proposed performance 497
improvement plan pursuant to subdivision (1) of subsection (e) of this 498
section; or 499
(IV) Waive or delay the requirement that such entity or payer file any 500
future proposed performance improvement plan until the executive 501
director determines, in the executive director's discretion, that such 502
entity or payer has successfully implemented its current performance 503
improvement plan. 504
(g) The executive director shall keep confidential all nonpublic 505
clinical, financial, operational or strategic documents and information 506
filed with, or submitted to, the executive director pursuant to this 507
section. The executive director shall not disclose any such document or 508
information to any person without the consent of the health care entity 509
or payer that filed such document or information with, or submitted 510
such document or information to, the executive director pursuant to this 511
section, except in summary form as part of an evaluative report if the 512
executive director determines that such disclosure should be made in 513
the public interest after taking into account any privacy, trade secret or 514
anti-competitive considerations. Notwithstanding any provision of the 515
general statutes, no document or information filed with, or submitted 516
to, the executive director pursuant to this section shall be deemed to be 517
a public record or subject to disclosure under the Freedom of 518
Information Act, as defined in section 1-200 of the general statutes. 519
Sec. 7. (NEW) (Effective July 1, 2020) (a) (1) For each calendar year 520
beginning on or after January 1, 2022, if the executive director 521
determines that the average annual percentage change in total health 522
care expenditures for the preceding calendar year exceeded the health 523
care cost growth benchmark for such year, the executive director shall 524
identify each other entity that significantly contributed to exceeding 525
such benchmark. Each identification shall be based on: 526
(A) The report, if any, prepared by the executive director pursuant to 527
subsection (c) of section 5 of this act for such calendar year; 528 Raised Bill No. 328
LCO No. 1988 19 of 40
(B) The report filed pursuant to section 38a-479ppp of the general 529
statutes for such calendar year; 530
(C) The information and data reported to the office pursuant to 531
section 19a-754b of the general statutes for such calendar year; 532
(D) Information obtained from the all-payer claims database 533
established under section 19a-755a of the general statutes; and 534
(E) Any other information that the executive director, in the executive 535
director's discretion, deems relevant for the purposes of this section. 536
(2) The executive director shall account for costs, net of rebates and 537
discounts, when identifying other entities pursuant to this section. 538
(b) The executive director may require that any other entity that is 539
found to be a significant contributor to health care cost growth in this 540
state during the preceding calendar year participate in the informational 541
public hearing held pursuant to subsection (a) of section 4 of this act. 542
Each such other entity that is required to participate in such hearing 543
shall provide testimony on issues identified by the executive director, 544
and provide additional information on actions taken to reduce such 545
other entity's contribution to future state-wide health care costs. If such 546
other entity is a drug manufacturer, and the executive director requires 547
that such drug manufacturer participate in such hearing with respect to 548
a specific drug or class of drugs, such hearing may, to the extent 549
possible, include representatives from at least one brand-name 550
manufacturer, one generic manufacturer and one innovator company 551
that is less than ten years old. 552
Sec. 8. (NEW) (Effective July 1, 2020) (a) (1) For each calendar year 553
beginning on or after January 1, 2022, the executive director shall 554
develop and adopt annual health care quality benchmarks for health 555
care entities and payers that: 556
(A) Enable health care entities and payers to report to the executive 557
director a standard set of information concerning health care quality for 558 Raised Bill No. 328
LCO No. 1988 20 of 40
such year; and 559
(B) Include measures concerning clinical health outcomes, 560
overutilization, underutilization and safety measures. 561
(2) In developing annual health care quality benchmarks pursuant to 562
subdivision (1) of this subsection, the executive director shall: 563
(A) Consider: 564
(i) Nationally recognized quality measures that are recommended by 565
medical groups or provider organizations concerning appropriate 566
quality measures for such groups' or organizations' specialties; and 567
(ii) Measures, including, but not limited to, newly developed 568
measures, that: 569
(I) Concern health outcomes, overutilization, underutilization and 570
patient safety; and 571
(II) Meet standards of patient-centeredness and ensure consideration 572
of important differences in preferences and clinical characteristics 573
within patient subpopulations; 574
(B) Provide stakeholders with an opportunity to engage with the 575
executive director in developing such benchmarks; and 576
(C) Ensure that the processes the executive director uses to develop, 577
and any research that the executive director relies upon in developing, 578
such benchmarks is transparent. 579
(b) Not later than October 1, 2021, and annually thereafter, the 580
executive director shall, prior to adopting health care quality 581
benchmarks pursuant to subdivision (1) of subsection (a) of this section 582
for the calendar year next succeeding, hold an informational public 583
hearing concerning the quality measures the executive director 584
proposes to adopt as health care quality benchmarks for the calendar 585
year next succeeding. 586 Raised Bill No. 328
LCO No. 1988 21 of 40
(c) Not later than November 1, 2021, and annually thereafter, the 587
executive director shall send a notice to each health care entity, payer 588
and other entity disclosing the health care quality benchmarks that the 589
executive director has adopted for the calendar year next succeeding. 590
Sec. 9. (NEW) (Effective July 1, 2020) The executive director may adopt 591
regulations, in accordance with chapter 54 of the general statutes, to 592
implement the provisions of sections 2 to 8, inclusive, of this act. 593
Sec. 10. (NEW) (Effective July 1, 2020) For the purposes of this section 594
and sections 11 to 15, inclusive, of this act unless the context otherwise 595
requires: 596
(1) "Drug" means an article that is (A) recognized in the official United 597
States Pharmacopoeia, official Homeopathic Pharmacopoeia of the 598
United States or official National Formulary, or any supplement thereto, 599
(B) intended for use in the diagnosis, cure, mitigation, treatment or 600
prevention of disease in humans, (C) not food and intended to affect the 601
structure or any function of the human body, and (D) not a device and 602
intended for use as a component of any other article specified in 603
subparagraphs (A) to (C), inclusive, of this subdivision; 604
(2) "Drug Quality and Security Act" means the federal Drug Quality 605
and Security Act, 21 USC 351, et seq., as amended from time to time; 606
(3) "Food, Drug and Cosmetic Act" means the Federal Food, Drug and 607
Cosmetic Act, 21 USC 301, et seq., as amended by the Drug Quality and 608
Security Act, as both may be amended from time to time; 609
(4) "Laboratory testing" means a quantitative and qualitative analysis 610
of a prescription drug consistent with the official United States 611
Pharmacopoeia; 612
(5) "Legend drug" means a drug that (A) any applicable federal or 613
state law requires to be (i) dispensed pursuant to a prescription, or (ii) 614
used by a prescribing practitioner, or (B) applicable federal law requires 615
to bear the following legend: "RX ONLY" IN ACCORDANCE WITH 616 Raised Bill No. 328
LCO No. 1988 22 of 40
GUIDELINES ESTABLISHED IN THE FEDERAL FOO D, DRUG AND 617
COSMETIC ACT; 618
(6) "Participating Canadian supplier" means a manufacturer or 619
wholesale drug distributor that is (A) licensed or permitted under 620
applicable Canadian law to manufacture or distribute prescription 621
drugs, (B) exporting legend drugs, in the manufacturer's original 622
container, to a participating wholesaler for distribution in this state 623
under the program, and (C) properly registered, if such Canadian 624
supplier is required to be registered, with the United States Food and 625
Drug Administration, or any successor agency; 626
(7) "Participating wholesaler" means a wholesaler, as defined in 627
section 21a-70 of the general statutes, that (A) has received a certificate 628
of registration from the Commissioner of Consumer Protection 629
pursuant to said section, and (B) is designated by the commissioner to 630
participate in the program; 631
(8) "Prescription" means a lawful verbal, written or electronic order 632
by a prescribing practitioner for a drug for a specific patient; 633
(9) "Program" means the Canadian legend drug importation program 634
established by the Commissioner of Consumer Protection pursuant to 635
section 11 of this act; 636
(10) "Qualified laboratory" means a laboratory that is (A) adequately 637
equipped and staffed to properly perform laboratory testing on legend 638
drugs, and (B) accredited to International Organization for 639
Standardization (ISO) 17025; and 640
(11) "Track-and-trace" means the product tracing process for the 641
components of the pharmaceutical distribution supply chain, as 642
described in Title II of the Drug Quality and Security Act. 643
Sec. 11. (NEW) (Effective July 1, 2020) (a) The Commissioner of 644
Consumer Protection shall establish a program to be known as the 645
"Canadian legend drug importation program". Under such program, 646 Raised Bill No. 328
LCO No. 1988 23 of 40
the commissioner shall, notwithstanding any contrary provision of the 647
general statutes: 648
(1) Provide for the importation of safe and effective legend drugs 649
from Canada that have the highest potential for cost savings in this state; 650
and 651
(2) Designate one or more participating wholesalers to distribute 652
legend drugs in this state: 653
(A) In the manufacturer's original container; 654
(B) From a participating Canadian supplier; and 655
(C) To a pharmacy or institutional pharmacy, as both terms are 656
defined in section 20-571 of the general statutes, or a qualified 657
laboratory. 658
(b) (1) Not later than July 1, 2021, the Commissioner of Consumer 659
Protection shall submit a request to the federal Secretary of Health and 660
Human Services seeking approval for the program under 21 USC 384, 661
as amended from time to time. Such request shall, at a minimum: 662
(A) Describe the commissioner's plans for operating the program; 663
(B) Demonstrate that the legend drugs that will be imported and 664
distributed in this state under the program shall: 665
(i) Meet all applicable federal and state standards for safety and 666
effectiveness; and 667
(ii) Comply with all federal tracing procedures; and 668
(C) Disclose the costs of implementing the program. 669
(2) (A) If the federal Secretary of Health and Human Services 670
approves the commissioner's request, the commissioner shall: 671
(i) Submit to the Commissioner of Public Health a notice disclosing 672 Raised Bill No. 328
LCO No. 1988 24 of 40
that the federal Secretary of Health and Human Services has approved 673
such request; 674
(ii) Submit to the joint standing committees of the General Assembly 675
having cognizance of matters relating to appropriations, general law, 676
human services and public health a notice disclosing that the federal 677
Secretary of Health and Human Services has approved such request; 678
and 679
(iii) Begin operating the program not later than one hundred eighty 680
days after the date of such approval. 681
(B) Except as otherwise provided in this subsection, the 682
Commissioner of Consumer Protection shall not operate the program 683
unless the federal Secretary of Health and Human Services approves the 684
commissioner's request. 685
Sec. 12. (NEW) (Effective July 1, 2020) (a) Each participating 686
wholesaler may, subject to the provisions of this section and sections 11 687
and 14 of this act, import into this state a legend drug from a 688
participating Canadian supplier, and distribute such legend drug to a 689
pharmacy or institutional pharmacy, as both terms are defined in 690
section 20-571 of the general statutes, or a qualified laboratory in this 691
state, under the program if: 692
(1) Such participating wholesaler: 693
(A) Is registered with the federal Secretary of Health and Human 694
Services pursuant to Section 510(b) of the Food, Drug and Cosmetic Act, 695
21 USC 360(b), as amended from time to time; and 696
(B) Holds a valid labeler code that has been issued to such 697
participating wholesaler by the United States Food and Drug 698
Administration, or any successor agency; and 699
(2) Such legend drug: 700
(A) May be imported into this state in accordance with applicable 701 Raised Bill No. 328
LCO No. 1988 25 of 40
federal patent laws; 702
(B) Meets the United States Food and Drug Administration's, or any 703
successor agency's, standards concerning drug safety, effectiveness, 704
misbranding and adulteration; and 705
(C) Is not: 706
(i) A controlled substance, as defined in 21 USC 802, as amended from 707
time to time; 708
(ii) A biological product, as defined in 42 USC 262, as amended from 709
time to time; 710
(iii) An infused drug; 711
(iv) An intravenously injected drug; 712
(v) A drug that is inhaled during surgery; or 713
(vi) A drug that is a parenteral drug, the importation of which is 714
determined by the federal Secretary of Health and Human Services to 715
pose a threat to the public health. 716
(b) Each participating wholesaler shall: 717
(1) Comply with all applicable track-and-trace requirements, and 718
make available to the Commissioner of Consumer Protection all track-719
and-trace records not later than forty-eight hours after the commissioner 720
requests such records; 721
(2) Not import, distribute, dispense or sell in this state any legend 722
drugs under the program except in accordance with the provisions of 723
this section and sections 11 and 14 of this act; 724
(3) Not distribute, dispense or sell outside of this state any legend 725
drugs that are imported into this state under the program; 726
(4) Ensure the safety and quality of the legend drugs that are 727 Raised Bill No. 328
LCO No. 1988 26 of 40
imported and distributed in this state under the program; 728
(5) For each initial shipment of a legend drug that is imported into 729
this state by such participating wholesaler, ensure that a qualified 730
laboratory engaged by such participating wholesaler tests a statistically 731
valid sample size for each batch of such legend drug in such shipment 732
for authenticity and degradation in a manner that is consistent with the 733
Food, Drug and Cosmetic Act; 734
(6) For each shipment of a legend drug that is imported into this state 735
by such participating wholesaler, and sampled and tested pursuant to 736
subdivision (5) of this subsection, ensure that a qualified laboratory 737
engaged by such participating wholesaler tests a statistically valid 738
sample of such legend drug in such shipment for authenticity and 739
degradation in a manner that is consistent with the Food, Drug and 740
Cosmetic Act; 741
(7) Certify to the Commissioner of Consumer Protection that each 742
legend drug imported into this state under the program: 743
(A) Is approved for marketing in the United States and not 744
adulterated or misbranded; and 745
(B) Meets all labeling requirements under 21 USC 352, as amended 746
from time to time; 747
(8) Maintain laboratory records, including, but not limited to, 748
complete data derived from all tests necessary to ensure that each 749
legend drug imported into this state under the program satisfies the 750
requirements of subdivisions (5) and (6) of this subsection; 751
(9) Maintain documentation demonstrating that the testing required 752
by subdivisions (5) and (6) of this subsection was conducted at a 753
qualified laboratory in accordance with the Food, Drug and Cosmetic 754
Act and all other applicable federal and state laws and regulations 755
concerning laboratory qualifications; 756
(10) Maintain the following information for each legend drug that 757 Raised Bill No. 328
LCO No. 1988 27 of 40
such participating wholesaler imports and distributes in this state under 758
the program, and submit such information to the Commissioner of 759
Consumer Protection upon request by the commissioner: 760
(A) The name and quantity of the active ingredient of such legend 761
drug; 762
(B) A description of the dosage form of such legend drug; 763
(C) The date on which such participating wholesaler received such 764
legend drug; 765
(D) The quantity of such legend drug that such participating 766
wholesaler received; 767
(E) The point of origin and destination of such legend drug; 768
(F) The price paid by such participating wholesaler for such legend 769
drug; 770
(G) A report for any legend drug that fails laboratory testing under 771
subdivision (5) or (6) of this subsection; and 772
(H) Such additional information and documentation that the 773
commissioner deems necessary to ensure the protection of the public 774
health; and 775
(11) Maintain all information and documentation that is submitted to 776
the Commissioner of Consumer Protection pursuant to this subsection 777
for a period of not less than three years. 778
Sec. 13. (NEW) (Effective July 1, 2020) Each participating Canadian 779
supplier shall: 780
(1) Comply with all applicable track-and-trace requirements; 781
(2) Not distribute, dispense or sell outside of this state any legend 782
drugs that are imported into this state under the program; and 783 Raised Bill No. 328
LCO No. 1988 28 of 40
(3) Maintain the following information and documentation and, 784
upon request by the Commissioner of Consumer Protection, submit 785
such information and documentation to the commissioner for each 786
legend drug that such participating Canadian supplier exports into this 787
state under the program: 788
(A) The original source of such legend drug, including, but not 789
limited to: 790
(i) The name of the manufacturer of such legend drug; 791
(ii) The date on which such legend drug was manufactured; and 792
(iii) The location where such legend drug was manufactured; 793
(B) The date on which such legend drug was shipped to a 794
participating wholesaler; 795
(C) The quantity of such legend drug that was shipped to a 796
participating wholesaler; 797
(D) The quantity of each lot of such legend drug that such 798
participating Canadian supplier originally received and the source of 799
such lot; 800
(E) The lot or control number and the batch number assigned to such 801
legend drug by the manufacturer; and 802
(F) Such additional information and documentation that the 803
commissioner deems necessary to ensure the protection of the public 804
health. 805
Sec. 14. (NEW) (Effective July 1, 2020) (a) The Commissioner of 806
Consumer Protection shall issue a written order: 807
(1) Suspending importation and distribution of a legend drug under 808
the program if the commissioner discovers that such distribution or 809
importation violates any provision of sections 11 to 13, inclusive, of this 810
act or any other applicable state or federal law or regulation; 811 Raised Bill No. 328
LCO No. 1988 29 of 40
(2) Suspending all importation and distribution of legend drugs by a 812
participating wholesaler under the program if the commissioner 813
discovers that the participating wholesaler has violated any provision 814
of section 11 or 12 of this act or any other applicable state or federal law 815
or regulation; 816
(3) Suspending all importation and distribution of legend drugs by a 817
participating Canadian supplier under the program if the commissioner 818
discovers that the participating Canadian supplier has violated any 819
provision of section 11 or 13 of this act or any other applicable state or 820
federal law or regulation; or 821
(4) Requiring the recall or seizure of any legend drug that was 822
imported and distributed under the program and has been identified as 823
adulterated, within the meaning of section 21a-105 of the general 824
statutes, or misbranded. 825
(b) The Commissioner of Consumer Protection shall send a notice to 826
each participating Canadian supplier and participating wholesaler 827
affected by an order issued pursuant to subsection (a) of this section 828
notifying such participating Canadian supplier or participating 829
wholesaler that: 830
(1) The commissioner has issued such order, and providing the legal 831
and factual basis for such order; and 832
(2) Such participating Canadian supplier or participating wholesaler 833
may request, in writing, a hearing before the commissioner, provided 834
such request is received by the commissioner not later than thirty days 835
after the date of such notice. 836
(c) If a participating Canadian supplier or participating wholesaler 837
timely requests a hearing pursuant to subsection (b) of this section, the 838
Commissioner of Consumer Protection shall, not later than thirty days 839
after the receipt of the request, convene the hearing as a contested case 840
in accordance with the provisions of chapter 54 of the general statutes. 841
Not later than sixty days after the receipt of such request, the 842 Raised Bill No. 328
LCO No. 1988 30 of 40
commissioner shall issue a final decision vacating, modifying or 843
affirming the commissioner's order. A participating Canadian supplier 844
or participating wholesaler aggrieved by a final decision may appeal 845
such decision in accordance with the provisions of section 4-183 of the 846
general statutes. 847
Sec. 15. (NEW) (Effective July 1, 2020) The Commissioner of Consumer 848
Protection may, in consultation with the Commissioner of Public 849
Health, adopt regulations in accordance with the provisions of chapter 850
54 of the general statutes to implement the provisions of sections 10 to 851
14, inclusive, of this act. 852
Sec. 16. Section 38a-8b of the general statutes is repealed and the 853
following is substituted in lieu thereof (Effective January 1, 2021): 854
(a) For the purposes of this section: 855
(1) "Attachment point" means the dollar value of claims incurred by 856
a policyholder at which the insurer that issues or delivers a medical 857
stop-loss insurance policy to the policyholder incurs liability to such 858
policyholder for payment under such medical stop-loss insurance 859
policy; 860
(2) "Employee" has the same meaning as provided in section 38a-564; 861
(3) "Expected claims" means the dollar value of claims that, in the 862
absence of a medical stop-loss insurance policy, the policyholder of a 863
medical stop-loss insurance policy is projected to incur under such 864
policyholder's health benefit plan; 865
(4) "Lasering" means assigning a different attachment point or 866
deductible, or denying coverage altogether, under a medical stop-loss 867
insurance policy for an enrollee or a dependent because the enrollee or 868
dependent has a high-cost preexisting condition or another identified 869
risk; 870
(5) "Medical stop-loss insurance" means stop-loss insurance 871
purchased by a person, other than a health carrier or health care 872 Raised Bill No. 328
LCO No. 1988 31 of 40
provider, and providing coverage for catastrophic, excess or unexpected 873
losses incurred by the policyholder, and due and owing to a third party, 874
under a health benefit plan not providing coverage for retirees; 875
(6) "Medical stop-loss insurer" means an insurer that is licensed 876
pursuant to section 38a-41 to sell, issue and deliver medical stop-loss 877
insurance in this state; 878
(7) "Retiree stop-loss insurance" means stop-loss insurance purchased 879
by a person, other than a health carrier or health care provider, and 880
providing coverage for catastrophic, excess or unexpected losses 881
incurred by the policyholder, and due and owing to a third party, under 882
a health benefit plan providing coverage for retirees; and 883
(8) "Stop-loss insurance" means insurance, other than reinsurance, 884
providing coverage for catastrophic, excess or unexpected losses 885
incurred by the policyholder, and due and owing to a third party, under 886
another insurance policy or a health benefit plan. 887
(b) No [stop loss] stop-loss insurance policy [may] shall be issued or 888
delivered in this state unless a copy of the [stop loss] stop-loss insurance 889
policy form has been submitted to, and approved by, the Insurance 890
Commissioner. [pursuant to regulations that the commissioner may 891
adopt in accordance with chapter 54. Such regulations, if adopted, shall 892
include, but need not be limited to, a definition of a stop loss policy and 893
the standards for filing and review of stop loss policies.] 894
(c) (1) Except as provided in subdivision (4) of subsection (d) of this 895
section, no medical stop-loss insurer shall issue or deliver, and the 896
Insurance Commissioner shall not approve, a medical stop-loss 897
insurance policy in this state on or after January 1, 2021, if the medical 898
stop-loss insurance policy: 899
(A) Imposes an annual attachment point that is less than twenty 900
thousand dollars for claims incurred per enrolled employee or 901
dependent; 902 Raised Bill No. 328
LCO No. 1988 32 of 40
(B) Imposes an annual aggregate attachment point: 903
(i) That is less than the greatest of the following amounts for an 904
insured group consisting of not more than fifty employees, as calculated 905
in the manner set forth in subdivision (2) of this subsection: 906
(I) Four thousand dollars multiplied by the number of employees in 907
such insured group; 908
(II) One hundred twenty per cent of the expected claims for such 909
insured group; or 910
(III) Twenty thousand dollars; or 911
(ii) That is less than one hundred ten per cent of the expected claims 912
for an insured group consisting of more than fifty employees, as 913
calculated in the manner set forth in subdivision (2) of this subsection; 914
(C) Provides direct coverage for an enrollee's or dependent's health 915
care expenses; 916
(D) Provides for a determination regarding whether a benefit is: 917
(i) Medically necessary; 918
(ii) Usual or customary; or 919
(iii) Experimental or investigational; 920
(E) Imposes a case management requirement or an annual dollar 921
limitation for an enrolled employee, dependent or benefit; 922
(F) Requires an enrolled employee or dependent to use a provider 923
network or provides a benefit incentive for an enrolled employee or 924
dependent to use a provider participating in a provider network; 925
(G) Provides the medical stop-loss insurer with a right to examine an 926
enrolled employee or dependent; 927
(H) Permits the medical stop-loss insurer to: 928 Raised Bill No. 328
LCO No. 1988 33 of 40
(i) Deny a claim if the policyholder is legally obligated to pay the 929
claim under such policyholder's health benefit plan; 930
(ii) Rescind such medical stop-loss insurance policy for any reason 931
other than fraud or intentional misrepresentation; 932
(iii) Terminate such medical stop-loss insurance policy, in the sole 933
discretion of such medical stop-loss insurer, in any manner that is 934
inconsistent with applicable laws concerning cancellation or 935
nonrenewal of medical stop-loss insurance policies; or 936
(iv) Increase the rates imposed under such medical stop-loss 937
insurance policy, in the sole discretion of such medical stop-loss insurer, 938
during the term of such medical stop-loss insurance policy; 939
(I) Requires an enrolled employee to be actively at work; or 940
(J) Contains any provision that is misleading, deceptive or contrary 941
to any provision of the general statutes or the public interest. 942
(2) (A) For the purposes of subparagraph (B) of subdivision (1) of this 943
subsection, the number of employees in an insured group shall be 944
determined by adding: 945
(i) The number of the policyholder's full-time employees for each 946
month who work a normal work week of thirty hours or more; and 947
(ii) The number of the policyholder's full-time equivalent employees, 948
calculated for each month by dividing by one hundred twenty the 949
aggregate number of hours worked for such month by employees who 950
work a normal work week of less than thirty hours, and averaging such 951
total for the calendar year. 952
(B) If a policyholder was not in existence throughout the preceding 953
calendar year, the number of employees shall be based on the average 954
number of employees that such policyholder reasonably expects to 955
employ in the current calendar year. 956 Raised Bill No. 328
LCO No. 1988 34 of 40
(d) Each insurer that underwrites a medical stop-loss insurance 957
policy issued or delivered in this state on or after January 1, 2021, may 958
use lasering in underwriting such medical stop-loss insurance policy, 959
provided: 960
(1) If such insurer uses lasering in underwriting such medical stop-961
loss insurance policy, such insurer and any insurance producer who 962
sells, solicits or negotiates such medical stop-loss insurance policy on 963
behalf of such insurer includes in each application for coverage under 964
such medical stop-loss insurance policy: 965
(A) A statement disclosing the increased financial risk that each 966
prospective policyholder under such medical stop-loss insurance policy 967
will bear because such insurer intends to use lasering in underwriting 968
such medical stop-loss insurance policy, and any alternatives available 969
to each such prospective policyholder with respect to such insurer's 970
intended use of lasering in underwriting such medical stop-loss 971
insurance policy; 972
(B) A statement by such insurer or insurance producer, as applicable, 973
affirming that such insurer or insurance producer fully explained to 974
each prospective policyholder under such medical stop-loss insurance 975
policy the increased financial risk described in subparagraph (A) of this 976
subdivision and that each such prospective policyholder understands 977
such increased financial risk; and 978
(C) The signature of such insurer, insurance producer and each 979
prospective policyholder below the statement required under 980
subparagraph (B) of this subdivision; 981
(2) If such insurer uses lasering on the effective date of such medical 982
stop-loss insurance policy, such insurer shall not change such lasering 983
during the term of such medical stop-loss insurance policy; 984
(3) If such insurer does not use lasering on the effective date of such 985
medical stop-loss insurance policy, such insurer shall not use lasering 986
during the term of such medical stop-loss insurance policy; and 987 Raised Bill No. 328
LCO No. 1988 35 of 40
(4) The attachment point for an enrolled employee under such 988
medical stop-loss insurance policy shall not exceed an amount that is 989
equal to three hundred per cent of the attachment point for such medical 990
stop-loss insurance policy. 991
(e) No retiree stop-loss insurance policy issued or delivered in this 992
state on or after January 1, 2021, shall be subject to the provisions of 993
subsection (c) or (d) of this section, and the Insurance Commissioner 994
shall review and approve, on a case-by case basis, such retiree stop-loss 995
insurance policies for issuance and delivery in this state on or after said 996
date. 997
(f) The Insurance Commissioner may adopt regulations, in 998
accordance with chapter 54, to carry out the purposes of this section. 999
Sec. 17. Subparagraph (C) of subdivision (3) of subsection (m) of 1000
section 5-259 of the 2020 supplement to the general statutes is repealed 1001
and the following is substituted in lieu thereof (Effective January 1, 2021): 1002
(C) The Comptroller may offer to nonstate public employers that 1003
choose to purchase prescription drugs pursuant to subparagraph (A) of 1004
this subdivision the option to purchase [stop loss] stop-loss coverage 1005
from an insurer at a rate negotiated by the Comptroller. 1006
Sec. 18. Subdivision (1) of subsection (c) of section 7-464 of the general 1007
statutes is repealed and the following is substituted in lieu thereof 1008
(Effective January 1, 2021): 1009
(1) In no event shall any commercial insurance company which 1010
provides health insurance benefits to the employees of a town, city or 1011
borough and their covered dependents and family members, including, 1012
but not limited to, [stop loss] stop-loss insurance beyond a municipal 1013
self-funded medical expense amount, be entitled to any reimbursement 1014
from a tortfeasor recovery. The provisions of this subsection shall be 1015
construed to only permit a self-insured town, city or borough to recover 1016
medical expenses paid from its own revenues. The provisions of this 1017
subsection shall not be construed to permit a self-insured town, city or 1018 Raised Bill No. 328
LCO No. 1988 36 of 40
borough to recover medical expenses paid from an insured plan, 1019
whether insured in whole or in part. 1020
Sec. 19. Subparagraph (F) of subdivision (18) of section 38a-465 of the 1021
general statutes is repealed and the following is substituted in lieu 1022
thereof (Effective January 1, 2021): 1023
(F) An authorized or eligible insurer that provides [stop loss] stop-1024
loss coverage to a provider, purchaser, financing entity, special purpose 1025
entity or related provider trust; 1026
Sec. 20. Subsection (c) of section 38a-465d of the general statutes is 1027
repealed and the following is substituted in lieu thereof (Effective January 1028
1, 2021): 1029
(c) Except as otherwise required or permitted by law, no person, 1030
including, but not limited to, a provider, broker, insurance company, 1031
insurance producer, information bureau, rating agency or company, or 1032
any other person with actual knowledge of an insured's identity, shall 1033
disclose such identity or information where there is a reasonable basis 1034
to conclude such information could be used to identify the insured or 1035
the insured's financial or medical information to any other person unless 1036
such disclosure: (1) Is necessary to effect a life settlement contract 1037
between the owner and a provider and the owner and insured have 1038
provided prior written consent to such disclosure; (2) is provided in 1039
response to an investigation or examination by the commissioner or any 1040
other governmental office or agency or pursuant to the requirements of 1041
section 38a-465i; (3) is necessary to effectuate the sale of life settlement 1042
contracts or interests therein as investments, provided the sale is 1043
conducted in accordance with applicable state and federal securities 1044
laws, and provided further the owner and the insured have both 1045
provided prior written consent to the disclosure; (4) is a term of or 1046
condition to the transfer of a policy by one provider to another provider, 1047
in which case the provider receiving such information shall comply with 1048
the confidentiality requirements specified in this subsection; (5) is 1049
necessary to allow the provider or broker or their authorized 1050 Raised Bill No. 328
LCO No. 1988 37 of 40
representatives to make contacts for the purpose of determining health 1051
status. For the purpose of this section, "authorized representative" does 1052
not include any person who has or may have a financial interest in the 1053
settlement contract other than a provider, licensed broker, financing 1054
entity, related provider trust or special purpose entity. Each provider or 1055
broker shall require its authorized representative to agree in writing to 1056
comply with the privacy provisions of this part; or (6) is required to 1057
purchase [stop loss] stop-loss coverage. 1058
Sec. 21. Subparagraph (A) of subdivision (2) of subsection (b) of 1059
section 38a-478l of the general statutes is repealed and the following is 1060
substituted in lieu thereof (Effective January 1, 2021): 1061
(A) "State medical loss ratio" means the ratio of incurred claims to 1062
earned premiums for the prior calendar year for managed care plans 1063
issued in the state. Claims shall be limited to medical expenses for 1064
services and supplies provided to enrollees and shall not include 1065
expenses for [stop loss] stop-loss coverage, reinsurance, enrollee 1066
educational programs or other cost containment programs or features; 1067
Sec. 22. Subsection (c) of section 38a-720h of the general statutes is 1068
repealed and the following is substituted in lieu thereof (Effective January 1069
1, 2021): 1070
(c) The third-party administrator shall disclose to the insurer or other 1071
person utilizing the services of the third-party administrator all charges, 1072
fees and commissions that the third-party administrator receives arising 1073
from services it provides for the insurer or other person utilizing the 1074
services of the third-party administrator, including any fees or 1075
commissions paid by insurers providing reinsurance or [stop loss] stop-1076
loss coverage. 1077
Sec. 23. (NEW) (Effective from passage) (a) For the purposes of this 1078
section: 1079
(1) "Affordable Care Act" means the Patient Protection and 1080
Affordable Care Act, P.L. 111-148, as amended by the Health Care and 1081 Raised Bill No. 328
LCO No. 1988 38 of 40
Education Reconciliation Act, P.L. 111-152, as both may be amended 1082
from time to time, and regulations adopted thereunder; 1083
(2) "Exchange" means the Connecticut Health Insurance Exchange 1084
established under section 38a-1081 of the general statutes; and 1085
(3) "Office" means the Office of Health Strategy established under 1086
section 19a-754a of the general statutes, as amended by this act. 1087
(b) The office shall, in conjunction with the Office of Policy and 1088
Management, the Insurance Department and the Health Reinsurance 1089
Association created under section 38a-556 of the general statutes, seek a 1090
state innovation waiver from the United States Department of the 1091
Treasury or the United States Department of Health and Human 1092
Services, as applicable, pursuant to Section 1332 of the Affordable Care 1093
Act to establish a reinsurance program pursuant to subsection (d) of this 1094
section. 1095
(c) Subject to the approval of a waiver described in subsection (b) of 1096
this section, the office, not later than September 1, 2020, for plan year 1097
2021 and annually thereafter for the subsequent plan year, shall: 1098
(1) Determine the amount needed, not to exceed twenty-one million 1099
two hundred ten thousand dollars, annually, to fund the reinsurance 1100
program established pursuant to subsection (d) of this section; and 1101
(2) Inform the Office of Policy and Management of the amount 1102
determined pursuant to subdivision (1) of this subsection. 1103
(d) The amount described in subsection (c) of this section shall be 1104
utilized to establish a reinsurance program for the individual health 1105
insurance market designed to lower premiums on health benefit plans 1106
sold in such market, on and off the exchange, provided the United States 1107
Department of the Treasury or the United States Department of Health 1108
and Human Services, as applicable, approves the waiver described in 1109
subsection (b) of this section. Any such reinsurance program shall be 1110
administered by the Health Reinsurance Association. The Treasurer 1111 Raised Bill No. 328
LCO No. 1988 39 of 40
shall annually transmit the amount as described in subsection (c) of this 1112
section for the purpose of administering such reinsurance program. 1113
(e) If the waiver described in subsection (b) of this section terminates 1114
and the office does not obtain another waiver pursuant to subsection (a) 1115
of this section, the Treasurer shall cease transmitting the amount 1116
described in subsection (c) of this section for the purpose of 1117
administering the reinsurance program established pursuant to 1118
subsection (d) of this section. 1119
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2020 19a-754a
Sec. 2 July 1, 2020 New section
Sec. 3 July 1, 2020 New section
Sec. 4 July 1, 2020 New section
Sec. 5 July 1, 2020 New section
Sec. 6 July 1, 2020 New section
Sec. 7 July 1, 2020 New section
Sec. 8 July 1, 2020 New section
Sec. 9 July 1, 2020 New section
Sec. 10 July 1, 2020 New section
Sec. 11 July 1, 2020 New section
Sec. 12 July 1, 2020 New section
Sec. 13 July 1, 2020 New section
Sec. 14 July 1, 2020 New section
Sec. 15 July 1, 2020 New section
Sec. 16 January 1, 2021 38a-8b
Sec. 17 January 1, 2021 5-259(m)(3)(C)
Sec. 18 January 1, 2021 7-464(c)(1)
Sec. 19 January 1, 2021 38a-465(18)(F)
Sec. 20 January 1, 2021 38a-465d(c)
Sec. 21 January 1, 2021 38a-478l(b)(2)(A)
Sec. 22 January 1, 2021 38a-720h(c)
Sec. 23 from passage New section
Raised Bill No. 328
LCO No. 1988 40 of 40
Statement of Purpose:
To: (1) Require the Office of Health Strategy to establish and implement
health care cost growth benchmarks in this state; (2) require the
Commissioner of Consumer Protection to submit a request to the federal
Secretary of Health and Human Services to implement a Canadian
prescription drug reimportation program in this state and, if the
secretary approves such request, implement such program in this state;
(3) implement the Insurance Commissioner's recommendations
regarding stop-loss insurance; and (4) require the Office of Health
Strategy to seek a state innovation waiver from the federal government
to establish a reinsurance program in this state and, if the federal
government approves such request, implement such program in this
state.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]