Connecticut 2023 Regular Session

Connecticut Senate Bill SB00983 Compare Versions

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7	7		General Assembly Substitute Bill No. 983
8	8		January Session, 2023
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14	14		AN ACT LIMITING ANTICOMPETITIVE HEALTH CARE PRACTICES.
15	15		Be it enacted by the Senate and House of Representatives in General
16	16		Assembly convened:
17	17
18	18		Section 1. (NEW) (Effective January 1, 2024) (a) As used in this section 1
19	19		and section 2 of this act: 2
20	20		(1) "All-or-nothing clause" means any provision in a health care 3
21	21		contract that: 4
22	22		(A) Requires the health carrier or health plan administrator to include 5
23	23		all members of a health care provider in a network plan; or 6
24	24		(B) Requires the health carrier or health plan administrator to enter 7
25	25		into any additional contract with an affiliate of the health care provider 8
26	26		as a condition to entering into a contract with such health care provider; 9
27	27		(2) "Anti-steering clause" means any provision of a health care 10
28	28		contract that restricts the ability of the health carrier or health plan 11
29	29		administrator from encouraging an enrollee to obtain a health care 12
30	30		service from a competitor of a hospital or health system, including 13
31	31		offering incentives to encourage enrollees to utilize specific health care 14
32	32		providers; 15
33	33		(3) "Anti-tiering clause" means any provision in a health care contract 16 Substitute Bill No. 983
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39	39
40	40		that: 17
41	41		(A) Restricts the ability of the health carrier or health plan 18
42	42		administrator to introduce and modify a tiered network plan or assign 19
43	43		health care providers into tiers; or 20
44	44		(B) Requires the health carrier or health plan administrator to place 21
45	45		all members of a health care provider in the same tier of a tiered network 22
46	46		plan; 23
47	47		(4) "Gag clause" means any provision of a health care contract that: 24
48	48		(A) Restricts the ability of the health care provider, health carrier or 25
49	49		health plan administrator to disclose any price or quality information, 26
50	50		including the allowed amount, negotiated rates or discounts, any fees 27
51	51		for services or any other claim-related financial obligations included in 28
52	52		the provider contract, to any governmental entity as authorized by law 29
53	53		or such governmental entity's contractors or agents, any enrollee, any 30
54	54		treating health care provider of an enrollee, plan sponsor or potential 31
55	55		eligible enrollees and plan sponsors; or 32
56	56		(B) Restricts the ability of either any health care provider, health 33
57	57		carrier or health plan administrator to disclose out-of-pocket costs to 34
58	58		any enrollee; 35
59	59		(5) "Health benefit plan", "network", "network plan" and "tiered 36
60	60		network" have the same meanings as provided in section 38a-472f of the 37
61	61		general statutes; 38
62	62		(6) "Health care contract" means any contract, agreement or 39
63	63		understanding, either orally or in writing, entered into, amended, 40
64	64		restated or renewed between a health care provider and a health carrier, 41
65	65		health plan administrator, plan sponsor or its contractors or agents for 42
66	66		delivery of health care services to an enrollee of a health benefit plan; 43
67	67		(7) "Health care provider" means any for-profit or nonprofit entity, 44
68	68		corporation, organization, parent corporation, member, affiliate, 45 Substitute Bill No. 983
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75	75		subsidiary or entity under common ownership that is or whose 46
76	76		members are licensed or otherwise authorized by this state to furnish, 47
77	77		bill for or receive payment for health care service delivery in the normal 48
78	78		course of business, including, but not limited to, any health system, 49
79	79		hospital, hospital-based facility, freestanding emergency department, 50
80	80		imaging center, physician group in a practice of eight or more 51
81	81		physicians, urgent care center as defined in section 19a-493d of the 52
82	82		general statutes and any physician or physician group in a practice of 53
83	83		fewer than eight physicians that is employed by or an affiliate of any 54
84	84		hospital, medical foundation or insurance company; 55
85	85		(8) "Health carrier" has the same meaning as provided in section 38a-56
86	86		591a of the general statutes; and 57
87	87		(9) "Health plan administrator" means any third-party administrator 58
88	88		that acts on behalf of a plan sponsor to administer a health benefit plan. 59
89	89		(b) No health care provider, health carrier, health plan administrator, 60
90	90		or any agent or other entity that contracts on behalf of a health care 61
91	91		provider, health carrier or health plan administrator, may offer, solicit, 62
92	92		request, amend, renew or enter into a health care contract on or after 63
93	93		January 1, 2024, that directly or indirectly includes any of the following 64
94	94		provisions: 65
95	95		(1) An all-or-nothing clause; 66
96	96		(2) An anti-steering clause; 67
97	97		(3) An anti-tiering clause; or 68
98	98		(4) A gag clause. 69
99	99		(c) Any clause in a health care contract, written policy, written 70
100	100		procedure or agreement entered into, renewed or amended on or after 71
101	101		January 1, 2024, that is contrary to the provisions set forth in subsection 72
102	102		(b) of this section shall be null and void. All remaining clauses of such 73
103	103		health care contract, written policy, written procedure or agreement 74 Substitute Bill No. 983
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110	110		shall remain in effect for the duration of the contract term. 75
111	111		(d) Nothing in this section shall be construed to limit network design 76
112	112		or cost or quality initiatives by a group health plan, health carrier or an 77
113	113		administrator working on behalf of a plan sponsor, including an 78
114	114		accountable care organization, exclusive provider organization or 79
115	115		network, that tiers providers by cost or quality or that steers enrollees to 80
116	116		centers of excellence or any other pay-for-performance program. 81
117	117		Sec. 2. (NEW) (Effective January 1, 2024) (a) The Attorney General shall 82
118	118		have exclusive authority to enforce any violation of section 1 of this act. 83
119	119		(b) For the period beginning July 1, 2024, and ending December 31, 84
120	120		2024, inclusive, the Attorney General shall, prior to initiating any action 85
121	121		for a violation of any provision of section 1 of this act, issue a notice of 86
122	122		violation to the health care provider, health carrier, health plan 87
123	123		administrator, or any agent or other entity that contracts on behalf of a 88
124	124		health care provider, health carrier or health plan administrator if the 89
125	125		Attorney General determines that a resolution is possible. If the health 90
126	126		care provider, health carrier, health plan administrator, or any agent or 91
127	127		other entity that contracts on behalf of a health care provider, health 92
128	128		carrier or health plan administrator fails to resolve such violation not 93
129	129		later than sixty days after receipt of such notice of violation, the 94
130	130		Attorney General may bring an action pursuant to this section. Not later 95
131	131		than February 1, 2024, the Attorney General shall submit a report, in 96
132	132		accordance with the provisions of section 11-4a of the general statutes, 97
133	133		to the joint standing committee of the General Assembly having 98
134	134		cognizance of matters relating to general law disclosing: (1) The number 99
135	135		of notices of violation the Attorney General has issued; (2) the nature of 100
136	136		each violation; (3) the number of violations that were resolved during 101
137	137		such sixty-day resolution period; and (4) any other matter the Attorney 102
138	138		General deems relevant for the purposes of such report. 103
139	139		(c) Nothing in section 1 of this act shall be construed to provide the 104
140	140		basis for, or be subject to, a private right of action for any violation of 105
141	141		said section or any other law. 106 Substitute Bill No. 983
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148	148		(d) Any violation of the requirements of section 1 of this act shall 107
149	149		constitute an unfair trade practice for purposes of section 42-110b of the 108
150	150		general statutes and shall be enforced solely by the Attorney General, 109
151	151		provided the provisions of section 42-110g of the general statutes shall 110
152	152		not apply to such violation. 111
153	153		Sec. 3. (NEW) (Effective January 1, 2024) (a) As used in this section: 112
154	154		(1) "Executive director" means the executive director of the Office of 113
155	155		Health Strategy; 114
156	156		(2) "Health benefit plan" means any agreement, including, but not 115
157	157		limited to, a nonfederal governmental plan, as defined in 29 USC 116
158	158		1002(32), a policy, a contract, a certificate or an agreement entered into, 117
159	159		offered or issued by a health carrier or health plan administrator acting 118
160	160		on behalf of a plan sponsor to provide, deliver, arrange for, pay for or 119
161	161		reimburse any of the costs of health care services, but does not include 120
162	162		any coverage for health care services by Medicare, Medicaid, TriCare, 121
163	163		the United States Department of Veterans Affairs, the Indian Health 122
164	164		Services or the Federal Employees Health Benefits Program; 123
165	165		(3) "Health care provider" means any individual, for-profit or 124
166	166		nonprofit entity, corporation or organization, including, but not limited 125
167	167		to, any health system, hospital or hospital-based facility that furnishes, 126
168	168		bills for or is paid for the delivery of health care services in the normal 127
169	169		course of business; 128
170	170		(4) "Health carrier" means any entity subject to the insurance laws 129
171	171		and regulations of this state or subject to the jurisdiction of the Insurance 130
172	172		Commissioner that offers health insurance, health benefits or contracts 131
173	173		for health care services, including, but not limited to, prescription drug 132
174	174		coverage, to large groups, small groups or individuals on or outside the 133
175	175		insurance marketplace; 134
176	176		(5) "Health plan administrator" means any third-party administrator 135
177	177		who acts on behalf of a plan sponsor to administer a health benefit plan; 136 Substitute Bill No. 983
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184	184		(6) "Health system" means: (A) A parent corporation of one or more 137
185	185		hospitals and any entity affiliated with such parent corporation through 138
186	186		ownership, governance, membership or other means, or (B) a hospital 139
187	187		and any entity affiliated with such hospital through ownership, 140
188	188		governance or membership; 141
189	189		(7) "Hospital" means any hospital licensed under section 19a-490 of 142
190	190		the general statutes; 143
191	191		(8) "Hospital-based facility" means any facility (A) owned or 144
192	192		operated, in whole or in part, by a hospital, and (B) where hospital or 145
193	193		professional medical services are provided; 146
194	194		(9) "Hospital price transparency laws" means Section 2718(e) of the 147
195	195		Public Health Service Act, 42 USC 256b, as amended from time to time, 148
196	196		and rules adopted by the United States Department of Health and 149
197	197		Human Services implementing said section; and 150
198	198		(10) "Transparency in coverage laws" means Section 2715A of the 151
199	199		Public Health Service Act, 42 USC 256b, as amended from time to time, 152
200	200		and Section 715 of the Employee Retirement Income Security Act of 153
201	201		1974, as amended from time to time, and Section 9815 of the Internal 154
202	202		Revenue Code, as amended from time to time, and rules adopted by the 155
203	203		United States Department of Health and Human Services, United States 156
204	204		Department of the Treasury and United States Department of Labor 157
205	205		implementing Section 2715A of the Public Health Service Act, Section 158
206	206		715 of the Employee Retirement Income Security Act, and Section 9815 159
207	207		of the Internal Revenue Code. 160
208	208		(b) (1) The total out-of-network costs assessed by any health care 161
209	209		provider for an inpatient or outpatient hospital service furnished to any 162
210	210		person covered by a health benefit plan entered into, renewed or 163
211	211		amended on or after January 1, 2024, with whom the health care 164
212	212		provider does not participate shall not exceed one hundred fifty per cent 165
213	213		of the reimbursement rate payable under Medicare for the same service 166
214	214		provided in the same geographic area. 167 Substitute Bill No. 983
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221	221		(2) No health care provider who is reimbursed in accordance with 168
222	222		subdivision (1) of this subsection shall charge or collect from the patient, 169
223	223		or any person who is financially responsible for the patient, any amount 170
224	224		greater than cost-sharing amounts authorized by the terms of the health 171
225	225		benefit plan and allowed under applicable law. The total cost, including 172
226	226		amounts paid by such health benefit plan and individual cost-sharing, 173
227	227		shall not exceed the assessed costs described in subdivision (1) of this 174
228	228		subsection or a separate amount as determined by the Office of Health 175
229	229		Strategy in regulations adopted pursuant to subsection (d) of this 176
230	230		section. 177
231	231		(3) If a health benefit plan does not reimburse claims on a fee-for-178
232	232		service basis, the payment method used shall take into account the limit 179
233	233		on the assessed costs specified in subdivision (1) of this subsection. Such 180
234	234		payment methods include, but are not limited to, value-based 181
235	235		payments, capitation payments and bundled payments. 182
236	236		(4) A health benefit plan shall pass on any savings from any reduction 183
237	237		in provider payments pursuant to this subsection to consumers. Any 184
238	238		savings by a health carrier from any reduction in provider payments 185
239	239		shall be reflected in such health carrier's annual rate filing for such 186
240	240		health benefit plan. 187
241	241		(5) This subsection shall not apply to (A) a hospital located in a rural 188
242	242		town, as designated by the State Office of Rural Health, or (B) a federally 189
243	243		qualified health center, as described in section 17b-245b of the general 190
244	244		statutes. 191
245	245		(c) (1) Each health care provider shall provide the Office of Health 192
246	246		Strategy, in a form and manner prescribed by the executive director, any 193
247	247		information and data that said office determines is necessary for 194
248	248		hospital price transparency, in order for said office to calculate the costs 195
249	249		of in-network and out-of-network hospital services and to monitor 196
250	250		compliance with the limit on out-of-network costs established in 197
251	251		subsection (b) of this section. 198 Substitute Bill No. 983
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258	258		(2) The Office of Health Strategy shall keep confidential all nonpublic 199
259	259		information and documents obtained under this subdivision and shall 200
260	260		not disclose such information or documents to any person without the 201
261	261		consent of the party that produced such information or documents, 202
262	262		except such information or documents may be disclosed to an expert or 203
263	263		consultant under contract with said office, provided such expert or 204
264	264		consultant is bound by the same confidentiality requirements as said 205
265	265		office. Such information and documents shall not be public records and 206
266	266		shall be exempt from disclosure pursuant to the provisions of chapter 207
267	267		14 of the general statutes. 208
268	268		(3) Not later than January 1, 2025, and annually thereafter, the Office 209
269	269		of Health Strategy shall report, in accordance with the provisions of 210
270	270		section 11-4a of the general statutes, to the joint standing committee of 211
271	271		the General Assembly having cognizance of matters related to insurance 212
272	272		on trends of provider in-network and out-of-network costs and 213
273	273		compliance with the provisions of this section. The Office of Health 214
274	274		Strategy may include in such report recommendations for further action 215
275	275		to make health care more affordable and accessible to residents of the 216
276	276		state. 217
277	277		(d) The Office of Health Strategy may adopt regulations, in 218
278	278		accordance with the provisions of chapter 54 of the general statutes, to 219
279	279		implement the provisions of this section, alter or reduce the limit on 220
280	280		assessed costs established under subsection (b) of this section and 221
281	281		impose civil penalties for noncompliance with the provisions of this 222
282	282		section in accordance with the provisions of section 19a-653 of the 223
283	283		general statutes. 224
284	284		(e) (1) (A) If the executive director receives information or has a 225
285	285		reasonable belief that any person, health care provider or health carrier 226
286	286		violated or is violating any provision of this section, or rule or regulation 227
287	287		adopted thereunder, the executive director may issue a notice of 228
288	288		violation and civil penalty pursuant to this section by first-class mail or 229
289	289		personal service. Such notice shall include: (i) A reference to the section 230
290	290		of the general statutes, rule or section of the regulations of Connecticut 231 Substitute Bill No. 983
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297	297		state agencies believed or alleged to have been violated; (ii) a short and 232
298	298		plain language statement of the matters asserted or charged; (iii) a 233
299	299		description of the activity to cease; (iv) a statement of the amount of the 234
300	300		civil penalty or penalties that may be imposed; (v) a statement 235
301	301		concerning the right to a hearing; and (vi) a statement that such person, 236
302	302		health care provider or health carrier may, not later than ten business 237
303	303		days after receipt of such notice, make a request for a hearing on the 238
304	304		matters asserted. 239
305	305		(B) The person, health care provider or health carrier to whom such 240
306	306		notice is provided pursuant to subparagraph (A) of this subdivision 241
307	307		may, not later than ten business days after receipt of such notice, make 242
308	308		written application to the Office of Health Strategy to request a hearing 243
309	309		to demonstrate that such violation did not occur. The failure to make a 244
310	310		timely request for a hearing shall result in the issuance of a cease and 245
311	311		desist order or civil penalty. All hearings held under this subsection 246
312	312		shall be conducted in accordance with the provisions of chapter 54 of 247
313	313		the general statutes. 248
314	314		(C) Following any hearing before the Office of Health Strategy 249
315	315		pursuant to this subsection, if the Office of Health Strategy finds by a 250
316	316		preponderance of the evidence that such person, health care provider or 251
317	317		health carrier violated or is violating any provision of this section, any 252
318	318		rule or regulation adopted thereunder or any order issued by the Office 253
319	319		of Health Strategy, the Office of Health Strategy shall issue a final cease 254
320	320		and desist order in addition to any civil penalty the Office of Health 255
321	321		Strategy imposes. 256
322	322		(2) The executive director, or the executive director's designee, may 257
323	323		audit any person, health care provider or health carrier subject to the 258
324	324		provisions of this section for compliance with the requirements of this 259
325	325		section. Until the expiration of four years after the furnishing of any 260
326	326		services for which an out-of-network cost was charged, billed or 261
327	327		collected, each person, health care provider or health carrier subject to 262
328	328		any such audit shall make available, upon written request of the 263
329	329		executive director of the Office of Health Strategy, or the executive 264 Substitute Bill No. 983
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336	336		director's designee, copies of any books, documents, records or data that 265
337	337		are necessary for completing such audit. 266
338	338		This act shall take effect as follows and shall amend the following
339	339		sections:
340	340
341	341		Section 1 January 1, 2024 New section
342	342		Sec. 2 January 1, 2024 New section
343	343		Sec. 3 January 1, 2024 New section
344	344
345	345
346	346		INS Joint Favorable Subst.
347	347		APP Joint Favorable
348		-	JUD Joint Favorable
349	348