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General Assembly Substitute Bill No. 983
January Session, 2023
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 any provision in a health care 3
contract that: 4
(A) Requires the health carrier or health plan administrator to 5
include all members of a health care provider in a network plan; or 6
(B) Requires the health carrier or health plan administrator to enter 7
into any additional contract with an affiliate of the health care provider 8
as a condition to entering into a contract with such health care 9
provider; 10
(2) "Anti-steering clause" means any provision of a health care 11
contract that restricts the ability of the health carrier or health plan 12
administrator from encouraging an enrollee to obtain a health care 13
service from a competitor of a hospital or health system, including 14
offering incentives to encourage enrollees to utilize specific health care 15
providers; 16
(3) "Anti-tiering clause" means any provision in a health care 17 Substitute Bill No. 983
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contract that: 18
(A) Restricts the ability of the health carrier or health plan 19
administrator to introduce and modify a tiered network plan or assign 20
health care providers into tiers; or 21
(B) Requires the health carrier or health plan administrator to place 22
all members of a health care provider in the same tier of a tiered 23
network plan; 24
(4) "Gag clause" means any provision of a health care contract that: 25
(A) Restricts the ability of the health care provider, health carrier or 26
health plan administrator to disclose any price or quality information, 27
including the allowed amount, negotiated rates or discounts, any fees 28
for services or any other claim-related financial obligations included in 29
the provider contract, to any governmental entity as authorized by law 30
or such governmental entity's contractors or agents, any enrollee, any 31
treating health care provider of an enrollee, plan sponsor or potential 32
eligible enrollees and plan sponsors; or 33
(B) Restricts the ability of either any health care provider, health 34
carrier or health plan administrator to disclose out-of-pocket costs to 35
any enrollee; 36
(5) "Health benefit plan", "network", "network plan" and "tiered 37
network" have the same meanings as provided in section 38a-472f of 38
the general statutes; 39
(6) "Health care contract" means any contract, agreement or 40
understanding, either orally or in writing, entered into, amended, 41
restated or renewed between a health care provider and a health 42
carrier, health plan administrator, plan sponsor or its contractors or 43
agents for delivery of health care services to an enrollee of a health 44
benefit plan; 45
(7) "Health care provider" means any for-profit or nonprofit entity, 46 Substitute Bill No. 983
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corporation, organization, parent corporation, member, affiliate, 47
subsidiary or entity under common ownership that is or whose 48
members are licensed or otherwise authorized by this state to furnish, 49
bill for or receive payment for health care service delivery in the 50
normal course of business, including, but not limited to, any health 51
system, hospital, hospital-based facility, freestanding emergency 52
department, imaging center, physician group in a practice of eight or 53
more physicians, urgent care center as defined in section 19a-493d of 54
the general statutes and any physician or physician group in a practice 55
of fewer than eight physicians that is employed by or an affiliate of any 56
hospital, medical foundation or insurance company; 57
(8) "Health carrier" has the same meaning as provided in section 58
38a-591a of the general statutes; and 59
(9) "Health plan administrator" means any third-party administrator 60
that acts on behalf of a plan sponsor to administer a health benefit 61
plan. 62
(b) No health care provider, health carrier, health plan 63
administrator, or any agent or other entity that contracts on behalf of a 64
health care provider, health carrier or health plan administrator, may 65
offer, solicit, request, amend, renew or enter into a health care contract 66
on or after January 1, 2024, that directly or indirectly includes any of 67
the following provisions: 68
(1) An all-or-nothing clause; 69
(2) An anti-steering clause; 70
(3) An anti-tiering clause; or 71
(4) A gag clause. 72
(c) Any clause in a health care contract, written policy, written 73
procedure or agreement entered into, renewed or amended on or after 74
January 1, 2024, that is contrary to the provisions set forth in 75 Substitute Bill No. 983
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subsection (b) of this section shall be null and void. All remaining 76
clauses of such health care contract, written policy, written procedure 77
or agreement shall remain in effect for the duration of the contract 78
term. 79
(d) Nothing in this section shall be construed to limit network 80
design or cost or quality initiatives by a group health plan, health 81
carrier or an administrator working on behalf of a plan sponsor, 82
including an accountable care organization, exclusive provider 83
organization or network, that tiers providers by cost or quality or that 84
steers enrollees to centers of excellence or any other pay-for-85
performance program. 86
Sec. 2. (NEW) (Effective January 1, 2024) (a) The Attorney General 87
shall have exclusive authority to enforce any violation of section 1 of 88
this act. 89
(b) For the period beginning July 1, 2024, and ending December 31, 90
2024, inclusive, the Attorney General shall, prior to initiating any 91
action for a violation of any provision of section 1 of this act, issue a 92
notice of violation to the health care provider, health carrier, health 93
plan administrator, or any agent or other entity that contracts on behalf 94
of a health care provider, health carrier or health plan administrator if 95
the Attorney General determines that a resolution is possible. If the 96
health care provider, health carrier, health plan administrator, or any 97
agent or other entity that contracts on behalf of a health care provider, 98
health carrier or health plan administrator fails to resolve such 99
violation not later than sixty days after receipt of such notice of 100
violation, the Attorney General may bring an action pursuant to this 101
section. Not later than February 1, 2024, the Attorney General shall 102
submit a report, in accordance with the provisions of section 11-4a of 103
the general statutes, to the joint standing committee of the General 104
Assembly having cognizance of matters relating to general law 105
disclosing: (1) The number of notices of violation the Attorney General 106
has issued; (2) the nature of each violation; (3) the number of violations 107
that were resolved during such sixty-day resolution period; and (4) 108 Substitute Bill No. 983
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any other matter the Attorney General deems relevant for the purposes 109
of such report. 110
(c) Nothing in section 1 of this act shall be construed to provide the 111
basis for, or be subject to, a private right of action for any violation of 112
said section or any other law. 113
(d) Any violation of the requirements of section 1 of this act shall 114
constitute an unfair trade practice for purposes of section 42-110b of 115
the general statutes and shall be enforced solely by the Attorney 116
General, provided the provisions of section 42-110g of the general 117
statutes shall not apply to such violation. 118
Sec. 3. (NEW) (Effective January 1, 2024) (a) As used in this section: 119
(1) "Executive director" means the executive director of the Office of 120
Health Strategy; 121
(2) "Health benefit plan" means any agreement, including, but not 122
limited to, a nonfederal governmental plan, as defined in 29 USC 123
1002(32), a policy, a contract, a certificate or an agreement entered into, 124
offered or issued by a health carrier or health plan administrator acting 125
on behalf of a plan sponsor to provide, deliver, arrange for, pay for or 126
reimburse any of the costs of health care services, but does not include 127
any coverage for health care services by Medicare, Medicaid, TriCare, 128
the United States Department of Veterans Affairs, the Indian Health 129
Services or the Federal Employees Health Benefits Program; 130
(3) "Health care provider" means any individual, for-profit or 131
nonprofit entity, corporation or organization, including, but not 132
limited to, any health system, hospital or hospital-based facility that 133
furnishes, bills for or is paid for the delivery of health care services in 134
the normal course of business; 135
(4) "Health carrier" means any entity subject to the insurance laws 136
and regulations of this state or subject to the jurisdiction of the 137
Insurance Commissioner that offers health insurance, health benefits 138 Substitute Bill No. 983
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or contracts for health care services, including, but not limited to, 139
prescription drug coverage, to large groups, small groups or 140
individuals on or outside the insurance marketplace; 141
(5) "Health plan administrator" means any third-party administrator 142
who acts on behalf of a plan sponsor to administer a health benefit 143
plan; 144
(6) "Health system" means: (A) A parent corporation of one or more 145
hospitals and any entity affiliated with such parent corporation 146
through ownership, governance, membership or other means, or (B) a 147
hospital and any entity affiliated with such hospital through 148
ownership, governance or membership; 149
(7) "Hospital" means any hospital licensed under section 19a-490 of 150
the general statutes; 151
(8) "Hospital-based facility" means any facility (A) owned or 152
operated, in whole or in part, by a hospital, and (B) where hospital or 153
professional medical services are provided; 154
(9) "Hospital price transparency laws" means Section 2718(e) of the 155
Public Health Service Act, 42 USC 256b, as amended from time to time, 156
and rules adopted by the United States Department of Health and 157
Human Services implementing said section; and 158
(10) "Transparency in coverage laws" means Section 2715A of the 159
Public Health Service Act, 42 USC 256b, as amended from time to time, 160
and Section 715 of the Employee Retirement Income Security Act of 161
1974, as amended from time to time, and Section 9815 of the Internal 162
Revenue Code, as amended from time to time, and rules adopted by 163
the United States Department of Health and Human Services, United 164
States Department of the Treasury and United States Department of 165
Labor implementing Section 2715A of the Public Health Service Act, 166
Section 715 of the Employee Retirement Income Security Act, and 167
Section 9815 of the Internal Revenue Code. 168 Substitute Bill No. 983
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(b) (1) The total out-of-network costs assessed by any health care 169
provider for an inpatient or outpatient hospital service furnished to 170
any person covered by a health benefit plan entered into, renewed or 171
amended on or after January 1, 2024, with whom the health care 172
provider does not participate shall not exceed one hundred fifty per 173
cent of the reimbursement rate payable under Medicare for the same 174
service provided in the same geographic area. 175
(2) No health care provider who is reimbursed in accordance with 176
subdivision (1) of this subsection shall charge or collect from the 177
patient, or any person who is financially responsible for the patient, 178
any amount greater than cost-sharing amounts authorized by the 179
terms of the health benefit plan and allowed under applicable law. The 180
total cost, including amounts paid by such health benefit plan and 181
individual cost-sharing, shall not exceed the assessed costs described 182
in subdivision (1) of this subsection or a separate amount as 183
determined by the Office of Health Strategy in regulations adopted 184
pursuant to subsection (d) of this section. 185
(3) If a health benefit plan does not reimburse claims on a fee-for-186
service basis, the payment method used shall take into account the 187
limit on the assessed costs specified in subdivision (1) of this 188
subsection. Such payment methods include, but are not limited to, 189
value-based payments, capitation payments and bundled payments. 190
(4) A health benefit plan shall pass on any savings from any 191
reduction in provider payments pursuant to this subsection to 192
consumers. Any savings by a health carrier from any reduction in 193
provider payments shall be reflected in such health carrier's annual 194
rate filing for such health benefit plan. 195
(5) This subsection shall not apply to (A) a hospital located in a rural 196
town, as designated by the State Office of Rural Health, or (B) a 197
federally qualified health center, as described in section 17b-245b of the 198
general statutes. 199 Substitute Bill No. 983
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(c) (1) Each health care provider shall provide the Office of Health 200
Strategy, in a form and manner prescribed by the executive director, 201
any information and data that said office determines is necessary for 202
hospital price transparency, in order for said office to calculate the 203
costs of in-network and out-of-network hospital services and to 204
monitor compliance with the limit on out-of-network costs established 205
in subsection (b) of this section. 206
(2) The Office of Health Strategy shall keep confidential all 207
nonpublic information and documents obtained under this subdivision 208
and shall not disclose such information or documents to any person 209
without the consent of the party that produced such information or 210
documents, except such information or documents may be disclosed to 211
an expert or consultant under contract with said office, provided such 212
expert or consultant is bound by the same confidentiality requirements 213
as said office. Such information and documents shall not be public 214
records and shall be exempt from disclosure pursuant to the 215
provisions of chapter 14 of the general statutes. 216
(3) Not later than January 1, 2025, and annually thereafter, the Office 217
of Health Strategy shall report, in accordance with the provisions of 218
section 11-4a of the general statutes, to the joint standing committee of 219
the General Assembly having cognizance of matters related to 220
insurance on trends of provider in-network and out-of-network costs 221
and compliance with the provisions of this section. The Office of 222
Health Strategy may include in such report recommendations for 223
further action to make health care more affordable and accessible to 224
residents of the state. 225
(d) The Office of Health Strategy may adopt regulations, in 226
accordance with the provisions of chapter 54 of the general statutes, to 227
implement the provisions of this section, alter or reduce the limit on 228
assessed costs established under subsection (b) of this section and 229
impose civil penalties for noncompliance with the provisions of this 230
section in accordance with the provisions of section 19a-653 of the 231
general statutes. 232 Substitute Bill No. 983
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(e) (1) (A) If the executive director receives information or has a 233
reasonable belief that any person, health care provider or health carrier 234
violated or is violating any provision of this section, or rule or 235
regulation adopted thereunder, the executive director may issue a 236
notice of violation and civil penalty pursuant to this section by first-237
class mail or personal service. Such notice shall include: (i) A reference 238
to the section of the general statutes, rule or section of the regulations 239
of Connecticut state agencies believed or alleged to have been violated; 240
(ii) a short and plain language statement of the matters asserted or 241
charged; (iii) a description of the activity to cease; (iv) a statement of 242
the amount of the civil penalty or penalties that may be imposed; (v) a 243
statement concerning the right to a hearing; and (vi) a statement that 244
such person, health care provider or health carrier may, not later than 245
ten business days after receipt of such notice, make a request for a 246
hearing on the matters asserted. 247
(B) The person, health care provider or health carrier to whom such 248
notice is provided pursuant to subparagraph (A) of this subdivision 249
may, not later than ten business days after receipt of such notice, make 250
written application to the Office of Health Strategy to request a hearing 251
to demonstrate that such violation did not occur. The failure to make a 252
timely request for a hearing shall result in the issuance of a cease and 253
desist order or civil penalty. All hearings held under this subsection 254
shall be conducted in accordance with the provisions of chapter 54 of 255
the general statutes. 256
(C) Following any hearing before the Office of Health Strategy 257
pursuant to this subsection, if the Office of Health Strategy finds by a 258
preponderance of the evidence that such person, health care provider 259
or health carrier violated or is violating any provision of this section, 260
any rule or regulation adopted thereunder or any order issued by the 261
Office of Health Strategy, the Office of Health Strategy shall issue a 262
final cease and desist order in addition to any civil penalty the Office 263
of Health Strategy imposes. 264
(2) The executive director, or the executive director's designee, may 265 Substitute Bill No. 983
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audit any person, health care provider or health carrier subject to the 266
provisions of this section for compliance with the requirements of this 267
section. Until the expiration of four years after the furnishing of any 268
services for which an out-of-network cost was charged, billed or 269
collected, each person, health care provider or health carrier subject to 270
any such audit shall make available, upon written request of the 271
executive director of the Office of Health Strategy, or the executive 272
director's designee, copies of any books, documents, records or data 273
that are necessary for completing such audit. 274
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 Legislative Commissioners:
In Section 3(c)(3), "and real estate" was deleted for consistency with the
general statutes; and in Section 3(e)(1)(B), reference to "subdivision (1)
of this subsection" was changed to "subparagraph (A) of this
subdivision" for accuracy.
INS Joint Favorable Subst.