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