OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-440
AN ACT CONCERNING CERTIFICATES OF NEED.
Primary Analyst: JP 4/8/24
Contributing Analyst(s): LD, MM, ES
Reviewer: RW
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 25 $ FY 26 $
Resources of the General Fund GF - Revenue
Loss
745,000 440,000
Office of Health Strategy See Below - See
Below
See Below See Below
State Comptroller - Fringe
Benefits
1
See Below - See
Below
See Below See Below
Attorney General GF - Cost Significant Significant
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill modifies the state’s Certificate of Need (CON) program for
health care entities, administered by the Office of Health Strategy’s
(OHS) Health Systems Planning Unit (HSPU), increasing the total
expenditure of HSPU by $745,000 in FY 25, and $440,000 annually
beginning in FY 26. Costs related to HSPU are deducted from an
assessment on the various state hospitals' revenue before any remaining
funds are deposited in the General Fund, ultimately resulting in a
revenue loss to the General Fund beginning in FY 25.
Section 1 of the bill makes changes to what transactions require CON
approval, and Section 2 affects various deadlines related to the CON
1
The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 41.25% of payroll in FY 25. 2024SB-00440-R000314-FN.DOCX Page 2 of 3
process. The bill may result in a fiscal impact to the state associated with
eliminating the CON process for certain service categories, until
6/30/30. The extent of the impact depends on the increased utilization
and associated Medicaid payments where new exclusions are granted.
OHS will incur costs of approximately $440,000 in salary and fringe
benefits beginning in FY 25 for two full-time positions and two
consultants with external medical expertise. The staff will be needed to
conduct CON application reviews on an annual basis.
Additionally, OHS will incur a one-time cost of $100,000 in FY 25 to
hire a consultant to assist the department in developing the expedited
review process.
Section 3 requires OHS to conduct a study on the state's CON process
and report to the Public Health Committee by January 1, 2025. OHS will
incur a one-time cost of $200,000 in FY 25 to contract with an outside
consultant because the department does not have the existing staff or
resources to complete the study within the timeframe established under
the bill.
Section 4 moves the responsibility of conducting Cost and Market
Impact Reviews (CMIRs) to the Attorney General's Office from HSPU.
OHS is still required to adopt regulations regarding the CMIR and
administer certain provisions. There is no fiscal impact to OHS from this
section.
The bill's provision transferring responsibility for conducting cost
and market impact reviews for certain hospital ownership transfers
would result in a significant cost to the Office of the Attorney General
(OAG), as it is outside the usual scope of its expertise. It is anticipated
that contracted services as well as potentially additional personnel
would be required in the OAG to conduct the mandatory reviews as
ownership transfers are proposed.
The Out Years
The annualized ongoing fiscal impact identified above would 2024SB-00440-R000314-FN.DOCX Page 3 of 3
continue into the future subject to inflation.