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General Assembly Governor's Bill No. 983
January Session, 2023
LCO No. 4061
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
Request of the Governor Pursuant
to Joint Rule 9
AN ACT LIMITING ANTICOMPETITIVE HEALTH CARE PRACTICES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective January 1, 2024) (a) As used in this section 1
and section 2 of this act: 2
(1) "All-or-nothing clause" means a provision in a health care contract 3
that: 4
(A) Requires a health carrier or health plan administrator to include 5
all members of a health care provider in a network plan; or 6
(B) Requires a health carrier or health plan administrator to enter into 7
any additional contract with an affiliate of a health care provider as a 8
condition to entering into a contract with such health care provider; 9
(2) "Anti-steering clause" means a provision of a health care contract 10
that restricts the ability of a health carrier or health plan administrator 11
from encouraging an enrollee to obtain a health care service from a 12
competitor of a hospital or health system, including offering incentives 13 Governor's Bill No. 983
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to encourage enrollees to utilize specific health care providers; 14
(3) "Anti-tiering clause" means a provision in a health care contract 15
that: 16
(A) Restricts the ability of a health carrier or health plan administrator 17
to introduce and modify a tiered network plan or assign health care 18
providers into tiers; or 19
(B) Requires a health carrier or health plan administrator to place all 20
members of a health care provider in the same tier of a tiered network 21
plan; 22
(4) "Gag clause" means a provision of a health care contract that: 23
(A) Restricts the ability of a health care provider or health carrier or 24
health plan administrator to disclose any price or quality information, 25
including the allowed amount, negotiated rates or discounts, any fees 26
for services or any other claim-related financial obligations included in 27
the provider contract, to a governmental entity as authorized by law or 28
its contractors or agents, any enrollee, treating provider of an enrollee, 29
plan sponsor, or potential eligible enrollees and plan sponsors; or 30
(B) Restricts the ability of either a health care provider, health carrier 31
or health plan administrator to disclose out-of-pocket costs to an 32
enrollee; 33
(5) "Health benefit plan", "network", "network plan", "participating 34
provider" and "tiered network" have the same meanings as provided in 35
section 38a-472f of the general statutes; 36
(6) "Health care contract" means a contract, agreement or 37
understanding, either orally or in writing, entered into, amended, 38
restated or renewed between a health care provider and a health carrier, 39
health plan administrator, plan sponsor or its contractors or agents for 40
the delivery of health care services to an enrollee of a health benefit plan; 41
(7) "Health care provider" means a for-profit or nonprofit entity, 42 Governor's Bill No. 983
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corporation, organization, parent corporation, member, affiliate, 43
subsidiary or entity under common ownership that is or whose 44
members are licensed or otherwise authorized by this state to furnish, 45
bill for or receive payment for health care service delivery in the normal 46
course of business, including, but not limited to, a health system, 47
hospital, hospital-based facility, freestanding emergency department, 48
imaging center, large physician group in a practice of eight or more 49
physicians, physician staffing organization, urgent care center and any 50
physician or physician group in a practice of fewer than eight physicians 51
that is employed by or an affiliate of any hospital, medical foundation, 52
insurance company or other similar entity; 53
(8) "Health carrier" has the same meaning as provided in section 38a-54
591a of the general statutes; and 55
(9) "Health plan administrator" means a third-party administrator 56
that acts on behalf of a plan sponsor to administer a health benefit plan. 57
(b) No health care provider, health carrier or health plan 58
administrator, or any agent or other entity that contracts on behalf of a 59
health care provider, health carrier or health plan administrator, may 60
offer, solicit, request, amend, renew or enter into a health care contract 61
on or after January 1, 2024, that would directly or indirectly include any 62
of the following provisions: 63
(1) An all-or-nothing clause; 64
(2) An anti-steering clause; 65
(3) An anti-tiering clause; or 66
(4) A gag clause. 67
(c) Any clause in a contract, written policy, written procedure or 68
agreement entered into, renewed or amended on or after January 1, 69
2024, that is contrary to the provisions set forth in subsection (b) of this 70
section shall be null and void. All remaining clauses of the contract, 71
written policy, written procedure or agreement shall remain in effect for 72 Governor's Bill No. 983
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the duration of the contract term. 73
(d) Nothing in this section shall be construed to limit network design 74
or cost or quality initiatives by a group health plan, health carrier or an 75
administrator working on behalf of a plan sponsor, including an 76
accountable care organization, exclusive provider organization or 77
network, that tiers providers by cost or quality or that steer enrollees to 78
centers of excellence or any other pay-for-performance program. 79
Sec. 2. (NEW) (Effective January 1, 2024) (a) The Attorney General shall 80
have exclusive authority to enforce violations of section 1 of this act. 81
(b) During the period beginning on July 1, 2024, and ending on 82
December 31, 2024, the Attorney General shall, prior to initiating any 83
action for a violation of any provision of section 1 of this act, issue a 84
notice of violation to the health care provider, health carrier, health plan 85
administrator, or any agent or other entity that contracts on behalf of a 86
health care provider, health carrier or health plan administrator if the 87
Attorney General determines that a cure is possible. If the health care 88
provider, health carrier, health plan administrator, or any agent or other 89
entity that contracts on behalf of a health care provider, health carrier or 90
health plan administrator fails to cure such violation not later than sixty 91
days after receipt of the notice of violation, the Attorney General may 92
bring an action pursuant to this section. Not later than February 1, 2024, 93
the Attorney General shall submit a report, in accordance with the 94
provisions of section 11-4a of the general statutes, to the joint standing 95
committee of the General Assembly having cognizance of matters 96
relating to general law disclosing: (1) The number of notices of violation 97
the Attorney General has issued; (2) the nature of each violation; (3) the 98
number of violations that were cured during the sixty-day cure period; 99
and (4) any other matter the Attorney General deems relevant for the 100
purposes of such report. 101
(c) Nothing in section 1 of this act shall be construed as providing the 102
basis for, or be subject to, a private right of action for violations of said 103
section or any other law. 104 Governor's Bill No. 983
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(d) A violation of the requirements of section 1 of this act shall 105
constitute an unfair trade practice for purposes of section 42-110b of the 106
general statutes and shall be enforced solely by the Attorney General, 107
provided the provisions of section 42-110g of the general statutes shall 108
not apply to such violation. 109
Sec. 3. (NEW) (Effective January 1, 2024) (a) As used in this section: 110
(1) "Executive director" means the executive director of the Office of 111
Health Strategy; 112
(2) "Health benefit plan" means a plan, including, but not limited to, 113
a nonfederal governmental plan, as defined in 29 USC 1002(32), a policy, 114
a contract, a certificate or an agreement entered into, offered or issued 115
by a health carrier or health plan administrator acting on behalf of a plan 116
sponsor to provide, deliver, arrange for, pay for or reimburse any of the 117
costs of health care services, but does not include any coverage for 118
health care services by Medicare, Medicaid, TriCare, the United States 119
Department of Veterans Affairs, the Indian Health Services or the 120
Federal Employees Health Benefits Program; 121
(3) "Health care provider" means an individual or a for-profit or 122
nonprofit entity, corporation or organization, including, but not limited 123
to, a health system, hospital or hospital-based facility that furnishes bills 124
for or is paid for the delivery of health care services in the normal course 125
of business; 126
(4) "Health carrier" means an entity subject to the insurance laws and 127
regulations of this state or subject to the jurisdiction of the Insurance 128
Commissioner that offers health insurance, health benefits or contracts 129
for health care services, including, but not limited to, prescription drug 130
coverage, to large groups, small groups or individuals on or outside the 131
insurance marketplace; 132
(5) "Health plan administrator" means a third-party administrator 133
who acts on behalf of a plan sponsor to administer a health benefit plan; 134 Governor's Bill No. 983
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(6) "Health system" means: (A) A parent corporation of one or more 135
hospitals and any entity affiliated with such parent corporation through 136
ownership, governance, membership or other means, or (B) a hospital 137
and any entity affiliated with such hospital through ownership, 138
governance, membership or other means; 139
(7) "Hospital" means a hospital licensed under section 19a-490 of the 140
general statutes; 141
(8) "Hospital-based facility" means a facility that is (A) owned or 142
operated, in whole or in part, by a hospital, and (B) where hospital or 143
professional medical services are provided; 144
(9) "Hospital price transparency laws" means Section 2718(e) of the 145
Public Health Service Act, 42 USC 256b, as amended from time to time, 146
and rules adopted by the United States Department of Health and 147
Human Services implementing said section; and 148
(10) "Transparency in coverage laws" means Section 2715A of the 149
Public Health Service Act, 42 USC 256b, as amended from time to time, 150
and Section 715 of the Employee Retirement Income Security Act of 151
1974, as amended from time to time, and Section 9815 of the Internal 152
Revenue Code, as amended from time to time, and rules adopted by the 153
United States Department of Health and Human Services, United States 154
Department of the Treasury and United States Department of Labor 155
implementing Section 2715A of the Public Health Services Act, Section 156
715 of the Employee Retirement Income Security Act, and Section 9815 157
of the Internal Revenue Code. 158
(b) (1) Total out-of-network costs assessed by any health care 159
provider for an inpatient or outpatient hospital service furnished to a 160
person covered by a health benefit plan with whom the health care 161
provider does not participate shall not exceed one hundred per cent of 162
the amount paid by Medicare for the same service in the same 163
geographic area. 164
(2) A health care provider who is reimbursed in accordance with 165 Governor's Bill No. 983
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subdivision (1) of this subsection may not charge or collect from the 166
patient, or any person who is financially responsible for the patient, any 167
amount greater than cost-sharing amounts authorized by the terms of 168
the health benefit plan and allowed under applicable law. The total cost, 169
including amounts paid by the health benefit plan and individual cost-170
sharing, shall not exceed the assessed costs described in subdivision (1) 171
of this subsection or another amount as determined by the Office of 172
Health Strategy in regulations adopted pursuant to subsection (d) of this 173
section. 174
(3) If a health benefit plan does not reimburse claims on a fee-for-175
service basis, the payment method used shall take into account the limit 176
on the assessed costs specified in subdivision (1) of this subsection. Such 177
payment methods include, but are not limited to, value-based 178
payments, capitation payments and bundled payments. 179
(4) This section shall not apply to (A) a hospital located in a rural 180
town, as designated by the State Office of Rural Health, or (B) a federally 181
qualified health center, as described in section 17b-245b of the general 182
statutes. 183
(c) (1) Health care providers shall provide the Office of Health 184
Strategy, in a form and manner prescribed by the executive director, any 185
information and data as said office determines is necessary for hospital 186
price transparency, to calculate the costs of in-network and out-of-187
network hospital services and to monitor compliance with the limit on 188
out-of-network costs established in subsection (b) of this section. 189
(2) The Office of Health Strategy shall keep confidential all nonpublic 190
information and documents obtained under this subdivision and shall 191
not disclose such information or documents to any person without the 192
consent of the party that produced such information or documents, 193
except such information or documents may be disclosed to an expert or 194
consultant under contract with said office, provided such expert or 195
consultant is bound by the same confidentiality requirements as said 196
office. Such information and documents shall not be public records and 197 Governor's Bill No. 983
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shall be exempt from the provisions of chapter 14 of the general statutes. 198
(3) Not later than January 1, 2025, and annually thereafter, the Office 199
of Health Strategy shall report, in accordance with the provisions of 200
section 11-4a of the general statutes, to the joint standing committee of 201
the General Assembly having cognizance of matters related to insurance 202
and real estate on trends of provider in-network and out-of-network 203
costs and compliance with the provisions of this section. The Office of 204
Health Strategy may include in such report recommendations for 205
further action to make health care more affordable and accessible to 206
residents of the state. 207
(d) The Office of Health Strategy may adopt regulations, in 208
accordance with the provisions of chapter 54 of the general statutes, to 209
implement the provisions of this section, alter or reduce the limit on 210
assessed costs established under subsection (b) of this section and 211
impose civil penalties for noncompliance with the provisions of this 212
section in accordance with the provisions of section 19a-653 of the 213
general statutes. 214
(e) (1) (A) If the executive director has received information or has a 215
reasonable belief that any person, health care facility or institution has 216
violated or is violating any provision of this section, or rule or regulation 217
adopted thereunder, the executive director may issue a notice of 218
violation and civil penalty pursuant to this section by first-class mail or 219
personal service. The notice shall include: (i) A reference to the section 220
of the general statutes, rule or section of the regulations of Connecticut 221
state agencies believed or alleged to have been violated; (ii) a short and 222
plain language statement of the matters asserted or charged; (iii) a 223
description of the activity to cease; (iv) a statement of the amount of the 224
civil penalty or penalties that may be imposed; (v) a statement 225
concerning the right to a hearing; and (vi) a statement that such person, 226
health care facility or institution may, not later than ten business days 227
after receipt of such notice, make a request for a hearing on the matters 228
asserted. 229 Governor's Bill No. 983
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(B) The person, health care facility or institution to whom such notice 230
is provided pursuant to subdivision (1) of this subsection may, not later 231
than ten business days after receipt of such notice, make written 232
application to the Office of Health Strategy to request a hearing to 233
demonstrate that such violation has not occurred. A failure to make a 234
timely request for a hearing shall result in the issuance of a cease and 235
desist order or civil penalty. All hearings held under this subsection 236
shall be conducted pursuant to chapter 54 of the general statutes. 237
(C) Following a hearing before the Office of Health Strategy pursuant 238
to this subsection if the office finds by a preponderance of the evidence 239
that such person, health care facility or institution has violated or is 240
violating any provision of this section, any rule or regulation adopted 241
thereunder or any order of the office, the office shall issue a final cease 242
and desist order in addition to any civil penalty the office imposes. 243
(2) The executive director, or the executive director's designee, may 244
audit any person, health care facility or institution governed by the 245
provision of this section for compliance with the requirements of this 246
section. Until the expiration of four years after the furnishing of any 247
services for which an out-of-network cost was charged, billed or 248
collected, each person, health care facility or institution subject to the 249
audit shall make available, upon written request of the executive 250
director of the Office of Health Strategy, or the executive director's 251
designee, copies of any books, documents, records or data that are 252
necessary for completing the audit. 253
This act shall take effect as follows and shall amend the following
sections:
Section 1 January 1, 2024 New section
Sec. 2 January 1, 2024 New section
Sec. 3 January 1, 2024 New section
Statement of Purpose:
To implement the Governor's budget recommendations. Governor's Bill No. 983
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[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.]