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General Assembly Substitute Bill No. 440
February Session, 2024
AN ACT CONCERNING CERTIFICATES OF NEED.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 19a-638 of the 2024 supplement to the general 1
statutes is repealed and the following is substituted in lieu thereof 2
(Effective October 1, 2024): 3
(a) A certificate of need issued by the unit shall be required for: 4
(1) The establishment of a new health care facility; 5
(2) A transfer of ownership of a health care facility; 6
(3) A transfer of ownership of a large group practice to any entity 7
other than a (A) physician, or (B) group of two or more physicians, 8
legally organized in a partnership, professional corporation or limited 9
liability company formed to render professional services and not 10
employed by or an affiliate of any hospital, medical foundation, 11
insurance company or other similar entity; 12
(4) The establishment of a freestanding emergency department; 13
(5) The termination of inpatient or outpatient services offered by a 14
hospital, including, but not limited to, the termination by a short-term 15
acute care general hospital or children's hospital of inpatient and 16
outpatient mental health and substance abuse services; 17 Substitute Bill No. 440
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(6) The establishment of an outpatient surgical facility, as defined in 18
section 19a-493b, or as established by a short-term acute care general 19
hospital; 20
(7) The termination of surgical services by an outpatient surgical 21
facility, as defined in section 19a-493b, or a facility that provides 22
outpatient surgical services as part of the outpatient surgery department 23
of a short-term acute care general hospital, provided termination of 24
outpatient surgical services due to (A) insufficient patient volume, or (B) 25
the termination of any subspecialty surgical service, shall not require 26
certificate of need approval; 27
(8) The termination of an emergency department by a short-term 28
acute care general hospital; 29
(9) The establishment of cardiac services, including inpatient and 30
outpatient cardiac catheterization, interventional cardiology and 31
cardiovascular surgery; 32
(10) The acquisition of computed tomography scanners, magnetic 33
resonance imaging scanners, positron emission tomography scanners or 34
positron emission tomography-computed tomography scanners, by any 35
person, physician, provider, short-term acute care general hospital or 36
children's hospital, except (A) as provided for in subdivision (22) of 37
subsection (b) of this section, and (B) a certificate of need issued by the 38
unit shall not be required where such scanner is a replacement for a 39
scanner that was previously acquired through certificate of need 40
approval or a certificate of need determination, including a replacement 41
scanner that has dual modalities or functionalities if the applicant 42
already offers similar imaging services for each of the scanner's 43
modalities or functionalities that will be utilized; 44
(11) The acquisition of nonhospital based linear accelerators, except a 45
certificate of need issued by the unit shall not be required where such 46
accelerator is a replacement for an accelerator that was previously 47
acquired through certificate of need approval or a certificate of need 48
determination; 49 Substitute Bill No. 440
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(12) An increase in the licensed bed capacity of a health care facility, 50
except as provided in subdivision (23), subparagraph (C) of subdivision 51
(26) and subdivision (28) of subsection (b) of this section; 52
(13) The acquisition of equipment utilizing technology that has not 53
previously been utilized in the state; 54
(14) An increase of two or more operating rooms within any three-55
year period, commencing on and after October 1, 2010, by an outpatient 56
surgical facility, as defined in section 19a-493b, or by a short-term acute 57
care general hospital; [and] 58
(15) The termination of inpatient or outpatient services offered by a 59
hospital or other facility or institution operated by the state that 60
provides services that are eligible for reimbursement under Title XVIII 61
or XIX of the federal Social Security Act, 42 USC 301, as amended from 62
time to time; 63
(16) The relocation of outpatient, behavioral health care, substance 64
use disorder, women's health care or emergency medical services 65
outside of the municipality in which such services are currently 66
provided, except as provided in subdivision (27) of subsection (b) of this 67
section; 68
(17) Any investment in a health care facility by a private equity 69
company in which the private equity company acquires a controlling 70
interest, either directly or indirectly, in a health care facility, or 71
otherwise obtains the ability to exercise operational control, managerial 72
control or decision-making authority over such facility; 73
(18) Any transaction in which a private equity company acquires a 74
controlling interest, either directly or indirectly, in a large group practice 75
of ten or more full-time equivalent physicians, or otherwise obtains the 76
ability to exercise operational control, managerial control or decision-77
making authority over such large group practice; and 78
(19) Any transaction involving a private equity company in which a 79 Substitute Bill No. 440
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health care facility's assets would be increased or reduced. 80
(b) A certificate of need shall not be required for: 81
(1) Health care facilities owned and operated by the federal 82
government; 83
(2) The establishment of offices by a licensed private practitioner, 84
whether for individual or group practice, except when a certificate of 85
need is required in accordance with the requirements of section 19a-86
493b or subdivision (3), (10) or (11) of subsection (a) of this section; 87
(3) A health care facility operated by a religious group that 88
exclusively relies upon spiritual means through prayer for healing; 89
(4) Residential care homes, as defined in subsection (c) of section 19a-90
490, and nursing homes and rest homes, as defined in subsection (o) of 91
section 19a-490; 92
(5) An assisted living services agency, as defined in section 19a-490; 93
(6) Home health agencies, as defined in section 19a-490; 94
(7) Hospice services, as described in section 19a-122b; 95
(8) Outpatient rehabilitation facilities; 96
(9) Outpatient chronic dialysis services; 97
(10) Transplant services; 98
(11) Free clinics, as defined in section 19a-630; 99
(12) School-based health centers and expanded school health sites, as 100
such terms are defined in section 19a-6r, community health centers, as 101
defined in section 19a-490a, not-for-profit outpatient clinics licensed in 102
accordance with the provisions of chapter 368v and federally qualified 103
health centers; 104
(13) A program licensed or funded by the Department of Children 105 Substitute Bill No. 440
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and Families, provided such program is not a psychiatric residential 106
treatment facility; 107
(14) Any nonprofit facility, institution or provider that has a contract 108
with, or is certified or licensed to provide a service for, a state agency or 109
department for a service that would otherwise require a certificate of 110
need. The provisions of this subdivision shall not apply to a short-term 111
acute care general hospital or children's hospital, or a hospital or other 112
facility or institution operated by the state that provides services that are 113
eligible for reimbursement under Title XVIII or XIX of the federal Social 114
Security Act, 42 USC 301, as amended; 115
(15) A health care facility operated by a nonprofit educational 116
institution exclusively for students, faculty and staff of such institution 117
and their dependents; 118
(16) An outpatient clinic or program operated exclusively by or 119
contracted to be operated exclusively by a municipality, municipal 120
agency, municipal board of education or a health district, as described 121
in section 19a-241; 122
(17) A residential facility for persons with intellectual disability 123
licensed pursuant to section 17a-227 and certified to participate in the 124
Title XIX Medicaid program as an intermediate care facility for 125
individuals with intellectual disabilities; 126
(18) Replacement of existing computed tomography scanners, 127
magnetic resonance imaging scanners, positron emission tomography 128
scanners, positron emission tomography-computed tomography 129
scanners, or nonhospital based linear accelerators, if such equipment 130
was acquired through certificate of need approval or a certificate of need 131
determination, provided a health care facility, provider, physician or 132
person notifies the unit of the date on which the equipment is replaced 133
and the disposition of the replaced equipment, including if a 134
replacement scanner has dual modalities or functionalities and the 135
applicant already offers similar imaging services for each of the 136
equipment's modalities or functionalities that will be utilized; 137 Substitute Bill No. 440
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(19) Acquisition of cone-beam dental imaging equipment that is to be 138
used exclusively by a dentist licensed pursuant to chapter 379; 139
(20) The partial or total elimination of services provided by an 140
outpatient surgical facility, as defined in section 19a-493b, except as 141
provided in subdivision (6) of subsection (a) of this section and section 142
19a-639e; 143
(21) The termination of services for which the Department of Public 144
Health has requested the facility to relinquish its license; 145
(22) Acquisition of any equipment by any person that is to be used 146
exclusively for scientific research that is not conducted on humans; 147
(23) On or before June 30, 2026, an increase in the licensed bed 148
capacity of a mental health facility, provided (A) the mental health 149
facility demonstrates to the unit, in a form and manner prescribed by 150
the unit, that it accepts reimbursement for any covered benefit provided 151
to a covered individual under: (i) An individual or group health 152
insurance policy providing coverage of the type specified in 153
subdivisions (1), (2), (4), (11) and (12) of section 38a-469; (ii) a self-154
insured employee welfare benefit plan established pursuant to the 155
federal Employee Retirement Income Security Act of 1974, as amended 156
from time to time; or (iii) HUSKY Health, as defined in section 17b-290, 157
and (B) if the mental health facility does not accept or stops accepting 158
reimbursement for any covered benefit provided to a covered 159
individual under a policy, plan or program described in clause (i), (ii) or 160
(iii) of subparagraph (A) of this subdivision, a certificate of need for such 161
increase in the licensed bed capacity shall be required. 162
(24) The establishment at harm reduction centers through the pilot 163
program established pursuant to section 17a-673c; [or] 164
(25) On or before June 30, 2028, a birth center, as defined in section 165
19a-490, that is enrolled as a provider in the Connecticut medical 166
assistance program, as defined in section 17b-245g; 167 Substitute Bill No. 440
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(26) On or before June 30, 2030, (A) the establishment or expansion of 168
diagnostic or therapeutic cardiac catheterization or cardiac surgery 169
units, psychiatric units, substance use disorder units or rural health 170
services, (B) upgrades to radiologic technology, (C) an increase of 171
behavioral health beds for children, (D) an increase in capacity for 172
existing services offered by a health care facility, and (E) an increase in 173
the number of operating rooms at a health care facility existing on or 174
before October 1, 2024; 175
(27) The relocation of outpatient services (A) within the municipality 176
in which such services are currently provided, or (B) not more than 177
twenty miles from the current location at which such services are 178
provided; or 179
(28) An increase or reduction in the licensed bed capacity of a health 180
care facility of not more than twelve beds within any two-year period, 181
commencing on and after October 1, 2024. 182
(c) (1) Any person, health care facility or institution that is unsure 183
whether a certificate of need is required under this section, or (2) any 184
health care facility that proposes to relocate pursuant to section 19a-185
639c, shall send a letter to the unit that describes the project and requests 186
that the unit make a determination as to whether a certificate of need is 187
required. In the case of a relocation of a health care facility, the letter 188
shall include information described in section 19a-639c. A person, health 189
care facility or institution making such request shall provide the unit 190
with any information the unit requests as part of its determination 191
process. The unit shall provide a determination within thirty days of 192
receipt of such request. 193
(d) The executive director of the Office of Health Strategy may 194
implement policies and procedures necessary to administer the 195
provisions of this section while in the process of adopting such policies 196
and procedures as regulation, provided the executive director holds a 197
public hearing prior to implementing the policies and procedures and 198
posts notice of intent to adopt regulations on the office's Internet web 199 Substitute Bill No. 440
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site and the eRegulations System not later than twenty days after the 200
date of implementation. Policies and procedures implemented pursuant 201
to this section shall be valid until the time final regulations are adopted. 202
(e) On or before June 30, 2026, a mental health facility seeking to 203
increase licensed bed capacity without applying for a certificate of need, 204
as permitted pursuant to subdivision (23) of subsection (b) of this 205
section, shall notify the Office of Health Strategy, in a form and manner 206
prescribed by the executive director of said office, regarding (1) such 207
facility's intent to increase licensed bed capacity, (2) the address of such 208
facility, and (3) a description of all services that are being or will be 209
provided at such facility. 210
(f) Not later than January 1, 2025, the executive director of the Office 211
of Health Strategy shall report to the Governor and, in accordance with 212
the provisions of section 11-4a, to the joint standing committee of the 213
General Assembly having cognizance of matters relating to public 214
health concerning the executive director's recommendations, if any, 215
regarding the establishment of an expedited certificate of need process 216
for mental health facilities. 217
Sec. 2. Section 19a-639a of the 2024 supplement to the general statutes 218
is repealed and the following is substituted in lieu thereof (Effective 219
October 1, 2024): 220
(a) An application for a certificate of need shall be filed with the unit 221
in accordance with the provisions of this section and any regulations 222
adopted by the Office of Health Strategy. The application shall address 223
the guidelines and principles set forth in (1) subsection (a) of section 19a-224
639, and (2) regulations adopted by the department. The applicant shall 225
include with the application a nonrefundable application fee based on 226
the cost of the project. The amount of the fee shall be as follows: (A) One 227
thousand dollars for a project that will cost not greater than fifty 228
thousand dollars; (B) two thousand dollars for a project that will cost 229
greater than fifty thousand dollars but not greater than one hundred 230
thousand dollars; (C) three thousand dollars for a project that will cost 231 Substitute Bill No. 440
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greater than one hundred thousand dollars but not greater than five 232
hundred thousand dollars; (D) four thousand dollars for a project that 233
will cost greater than five hundred thousand dollars but not greater than 234
one million dollars; (E) five thousand dollars for a project that will cost 235
greater than one million dollars but not greater than five million dollars; 236
(F) eight thousand dollars for a project that will cost greater than five 237
million dollars but not greater than ten million dollars; and (G) ten 238
thousand dollars for a project that will cost greater than ten million 239
dollars. 240
(b) Prior to the filing of a certificate of need application, the applicant 241
shall (1) publish notice that an application is to be submitted to the unit 242
(A) in a newspaper having a substantial circulation in the area where 243
the project is to be located, and (B) on the applicant's Internet web site 244
in a clear and conspicuous location that is easily accessible by members 245
of the public, (2) request the publication of notice (A) in at least two sites 246
within the affected community that are commonly accessed by the 247
public, such as a town hall or library, and (B) on any existing Internet 248
web site of the municipality or local health department, and (3) submit 249
such notice to the unit for posting on such unit's Internet web site. Such 250
newspaper notice shall be published for not less than three consecutive 251
days, with the final date of consecutive publication occurring not later 252
than twenty days prior to the date of filing of the certificate of need 253
application, and contain a brief description of the nature of the project 254
and the street address where the project is to be located. Postings in the 255
affected community and on the applicant's Internet web site shall 256
remain until the decision on the application is rendered. The unit shall 257
not invalidate any notice due to changes or removal of the notice from 258
a community Internet web site of which the applicant has no control. An 259
applicant shall file the certificate of need application with the unit not 260
later than ninety days after publishing notice of the application in a 261
newspaper in accordance with the provisions of this subsection. The 262
unit shall not accept the applicant's certificate of need application for 263
filing unless the application is accompanied by the application fee 264
prescribed in subsection (a) of this section and proof of compliance with 265 Substitute Bill No. 440
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the publication requirements prescribed in this subsection. Prior to 266
submitting the certificate of need application, the applicant may request 267
an informational meeting with the unit to discuss the requirements of 268
the application process. The unit shall hold such informational meeting 269
with the applicant not later than one week after the date it receives the 270
applicant's request for an informational meeting. 271
(c) (1) Not later than five business days after receipt of a properly filed 272
certificate of need application, the unit shall publish notice of the 273
application on its Internet web site. Not later than thirty days after the 274
date of filing of the application, the unit may request such additional 275
information as the unit determines necessary to complete the 276
application. In addition to any information requested by the unit, if the 277
application involves the transfer of ownership of a hospital, as defined 278
in section 19a-639, the applicant shall submit to the unit (A) a plan 279
demonstrating how health care services will be provided by the new 280
hospital for the first three years following the transfer of ownership of 281
the hospital, including any consolidation, reduction, elimination or 282
expansion of existing services or introduction of new services, and (B) 283
the names of persons currently holding a position with the hospital to 284
be purchased or the purchaser, as defined in section 19a-639, as an 285
officer, director, board member or senior manager, whether or not such 286
person is expected to hold a position with the hospital after completion 287
of the transfer of ownership of the hospital and any salary, severance, 288
stock offering or any financial gain, current or deferred, such person is 289
expected to receive as a result of, or in relation to, the transfer of 290
ownership of the hospital. 291
(2) The applicant shall, not later than sixty days after the date of the 292
unit's request, submit any requested information and any information 293
required under this subsection to the unit. If an applicant fails to submit 294
such information to the unit within the sixty-day period, the unit shall 295
consider the application to have been withdrawn. 296
(3) The unit shall make reasonable efforts to limit the requests for 297
additional information to two such requests and, in all cases, cease all 298 Substitute Bill No. 440
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requests for additional information not later than six months after 299
receiving the application. 300
(d) Upon deeming an application complete, the unit shall provide 301
notice of this determination to the applicant and to the public in 302
accordance with regulations adopted by the department. In addition, 303
the unit shall post such notice on its Internet web site and notify the 304
applicant not later than five days after deeming the application 305
complete. The date on which the unit posts such notice on its Internet 306
web site shall begin the review period. Except as provided in this 307
subsection, (1) the review period for an application deemed complete 308
shall be [ninety] thirty days from the date on which the unit posts such 309
notice on its Internet web site; and (2) the unit shall issue a decision on 310
an application deemed complete prior to the expiration of the [ninety-311
day] thirty-day review period in matters without a public hearing. If the 312
unit does not issue a decision on an application deemed complete prior 313
to the expiration of the thirty-day review period in matters without a 314
public hearing, such application shall be deemed approved. The review 315
period for an application deemed complete that involves a transfer of a 316
large group practice, as described in subdivision (3) of subsection (a) of 317
section 19a-638, when the offer was made in response to a request for 318
proposal or similar voluntary offer for sale, shall be [sixty] twenty days 319
from the date on which the unit posts notice on its Internet web site. 320
Upon request or for good cause shown, the unit may extend the review 321
period for a period of time not to exceed [sixty] twenty days. If the 322
review period is extended, the unit shall issue a decision on the 323
completed application prior to the expiration of the extended review 324
period. If the unit holds a public hearing concerning a completed 325
application in accordance with subsection (e) or (f) of this section, the 326
unit shall issue a decision on the completed application not later than 327
[sixty] twenty days after the date the unit closes the public hearing 328
record. If the unit does not issue a decision on the completed 329
application, not later than twenty days after such date, the application 330
shall be deemed approved. 331
(e) Except as provided in this subsection, the unit shall hold a public 332 Substitute Bill No. 440
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hearing on a properly filed and completed certificate of need application 333
if three or more individuals or an individual representing an entity with 334
five or more people submits a request, in writing, that a public hearing 335
be held on the application. For a properly filed and completed certificate 336
of need application involving a transfer of ownership of a large group 337
practice, as described in subdivision (3) of subsection (a) of section 19a-338
638, when an offer was made in response to a request for proposal or 339
similar voluntary offer for sale, a public hearing shall be held if twenty-340
five or more individuals or an individual representing twenty-five or 341
more people submits a request, in writing, that a public hearing be held 342
on the application. Any request for a public hearing shall be made to the 343
unit not later than [thirty] ten days after the date the unit deems the 344
application to be complete. 345
(f) (1) The unit shall hold a public hearing with respect to each 346
certificate of need application filed pursuant to section 19a-638, as 347
amended by this act, after December 1, 2015, that concerns any transfer 348
of ownership involving a hospital. Such hearing shall be held in the 349
municipality in which the hospital that is the subject of the application 350
is located. 351
(2) The unit may hold a public hearing with respect to any certificate 352
of need application submitted under this chapter. The unit shall provide 353
not less than [two weeks'] five days' advance notice to the applicant, in 354
writing, and to the public by publication in a newspaper having a 355
substantial circulation in the area served by the health care facility or 356
provider. In conducting its activities under this chapter, the unit may 357
hold hearings with respect to applications of a similar nature at the same 358
time. The applicant shall post a copy of the unit's hearing notice on the 359
applicant's Internet web site in a clear and conspicuous location that is 360
easily accessible by members of the public. Such applicant shall request 361
the publication of notice in at least two sites within the affected 362
community that are commonly accessed by the public, such as a town 363
hall or library, as well as on any existing Internet web site of the 364
municipality or local health department. The unit shall not invalidate 365
any notice due to changes or removal of the notice from a community 366 Substitute Bill No. 440
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Internet web site of which the applicant has no control. 367
(g) An applicant may request an expedited timeline for determination 368
on a certificate of need application in a form and manner prescribed by 369
the unit. The unit shall develop a process for approving a request for an 370
expedited timeline. Notwithstanding the provisions of this section, if the 371
unit accepts a request for an expedited timeline, a determination shall 372
be made on the application not more than fourteen days after the date 373
the completed application is submitted to the unit. 374
[(g)] (h) (1) For applications submitted on or after October 1, 2023, the 375
unit may retain an independent consultant with expertise in the specific 376
area of health care that is the subject of the application filed by an 377
applicant if the review and analysis of an application cannot reasonably 378
be conducted by the unit without the expertise of an industry analyst or 379
other actuarial consultant. The unit shall submit bills for independent 380
consultant services to the applicant. Such applicant shall pay such bills 381
not later than thirty days after receipt of such bills. Such bills shall be a 382
reasonable amount per application. The provisions of chapter 57 and 383
sections 4-212 to 4-219, inclusive, and 4e-19 shall not apply to any 384
retainer agreement executed pursuant to this subsection. 385
(2) For applications submitted on or after October 1, 2024, the unit 386
may contract with independent consultants or other persons, as deemed 387
necessary by the executive director of the Office of Health Strategy, to 388
assist in reviewing and issuing decisions on applications submitted 389
pursuant to the provisions of this section. Not later than July 1, 2025, 390
and quarterly thereafter, the executive director of the Office of Health 391
Strategy shall post all costs incurred as a result of contracts entered into 392
pursuant to the provisions of this subdivision on the Office of Health 393
Strategy's Internet web site. 394
[(h)] (i) The executive director of the Office of Health Strategy may 395
implement policies and procedures necessary to administer the 396
provisions of this section while in the process of adopting such policies 397
and procedures as regulation, provided the executive director holds a 398 Substitute Bill No. 440
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public hearing prior to implementing the policies and procedures and 399
posts notice of intent to adopt regulations on the office's Internet web 400
site and the eRegulations System not later than twenty days after the 401
date of implementation. Policies and procedures implemented pursuant 402
to this section shall be valid until the time final regulations are adopted. 403
Sec. 3. (Effective from passage) The executive director of the Office of 404
Health Strategy shall conduct a study regarding the certificate of need 405
process in the state. Such study shall include, but need not be limited to, 406
(1) an examination of the cost to health care systems resulting from 407
delays or inefficiencies in the certificate of need process, (2) not less than 408
three public hearings convened by the executive director that allow 409
providers, insurers, the public and other stakeholders to provide 410
testimony regarding the certificate of need process, and (3) the 411
development of recommendations to improve the certificate of need 412
process by reducing delays, streamlining administrative processes and 413
hiring trained, experienced staff in lieu of contracting with third-party 414
experts. Not later than January 1, 2025, the executive director shall 415
report, in accordance with section 11-4a of the general statutes, to the 416
joint standing committee of the General Assembly having cognizance of 417
matters relating to public health regarding the results of such study. 418
Sec. 4. Section 19a-639f of the general statutes is repealed and the 419
following is substituted in lieu thereof (Effective October 1, 2024): 420
(a) The [Health Systems Planning Unit of the Office of Health 421
Strategy] office of the Attorney General shall conduct a cost and market 422
impact review in each case where (1) an application for a certificate of 423
need filed pursuant to section 19a-638, as amended by this act, involves 424
the transfer of ownership of a hospital, as defined in section 19a-639, and 425
(2) the purchaser is a hospital, as defined in section 19a-490, whether 426
located within or outside the state, that had net patient revenue for fiscal 427
year 2013 in an amount greater than one billion five hundred million 428
dollars, or a hospital system, as defined in section 19a-486i, whether 429
located within or outside the state, that had net patient revenue for fiscal 430
year 2013 in an amount greater than one billion five hundred million 431 Substitute Bill No. 440
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dollars or any person that is organized or operated for profit. 432
(b) Not later than twenty-one days after receipt of a properly filed 433
certificate of need application involving the transfer of ownership of a 434
hospital filed on or after December 1, 2015, as described in subsection 435
(a) of this section, the unit shall notify the office of the Attorney General 436
of the need for the cost and market impact review. The Attorney General 437
shall initiate such cost and market impact review by sending the 438
transacting parties a written notice that shall contain a description of the 439
basis for the cost and market impact review as well as a request for 440
information and documents. Not later than thirty days after receipt of 441
such notice, the transacting parties shall submit to the [unit] Attorney 442
General a written response. Such response shall include, but need not 443
be limited to, any information or documents requested by the [unit] 444
Attorney General concerning the transfer of ownership of the hospital. 445
The [unit] Attorney General shall have the powers with respect to the 446
cost and market impact review as provided in section 19a-633. 447
(c) The [unit] Attorney General shall keep confidential all nonpublic 448
information and documents obtained pursuant to this section and shall 449
not disclose the information or documents to any person without the 450
consent of the person that produced the information or documents, 451
except in a preliminary report or final report issued in accordance with 452
this section if the [unit] Attorney General believes that such disclosure 453
should be made in the public interest after taking into account any 454
privacy, trade secret or anti-competitive considerations. Such 455
information and documents shall not be deemed a public record, under 456
section 1-210, and shall be exempt from disclosure. 457
(d) The cost and market impact review conducted pursuant to this 458
section shall examine factors relating to the businesses and relative 459
market positions of the transacting parties as defined in subsection (d) 460
of section 19a-639 and may include, but need not be limited to: (1) The 461
transacting parties' size and market share within its primary service 462
area, by major service category and within its dispersed service areas; 463
(2) the transacting parties' prices for services, including the transacting 464 Substitute Bill No. 440
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parties' relative prices compared to other health care providers for the 465
same services in the same market; (3) the transacting parties' health 466
status adjusted total medical expense, including the transacting parties' 467
health status adjusted total medical expense compared to that of similar 468
health care providers; (4) the quality of the services provided by the 469
transacting parties, including patient experience; (5) the transacting 470
parties' cost and cost trends in comparison to total health care 471
expenditures state wide; (6) the availability and accessibility of services 472
similar to those provided by each transacting party, or proposed to be 473
provided as a result of the transfer of ownership of a hospital within 474
each transacting party's primary service areas and dispersed service 475
areas; (7) the impact of the proposed transfer of ownership of the 476
hospital on competing options for the delivery of health care services 477
within each transacting party's primary service area and dispersed 478
service area including the impact on existing service providers; (8) the 479
methods used by the transacting parties to attract patient volume and to 480
recruit or acquire health care professionals or facilities; (9) the role of 481
each transacting party in serving at-risk, underserved and government 482
payer patient populations, including those with behavioral, substance 483
use disorder and mental health conditions, within each transacting 484
party's primary service area and dispersed service area; (10) the role of 485
each transacting party in providing low margin or negative margin 486
services within each transacting party's primary service area and 487
dispersed service area; (11) consumer concerns, including, but not 488
limited to, complaints or other allegations that a transacting party has 489
engaged in any unfair method of competition or any unfair or deceptive 490
act or practice; and (12) any other factors that the [unit] Attorney 491
General determines to be in the public interest. 492
(e) Not later than ninety days after the [unit] Attorney General 493
determines that there is substantial compliance with any request for 494
documents or information issued by the [unit] Attorney General in 495
accordance with this section, or a later date set by mutual agreement of 496
the unit and the transacting parties, the [unit] Attorney General shall 497
make factual findings and issue a preliminary report on the cost and 498 Substitute Bill No. 440
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market impact review. Such preliminary report shall include, but shall 499
not be limited to, an indication as to whether a transacting party meets 500
the following criteria: (1) Currently has or, following the proposed 501
transfer of operations of the hospital, is likely to have a dominant market 502
share for the services the transacting party provides; and (2) (A) 503
currently charges or, following the proposed transfer of operations of 504
the hospital, is likely to charge prices for services that are materially 505
higher than the median prices charged by all other health care providers 506
for the same services in the same market, or (B) currently has or, 507
following the proposed transfer of operations of a hospital, is likely to 508
have a health status adjusted total medical expense that is materially 509
higher than the median total medical expense for all other health care 510
providers for the same service in the same market. 511
(f) The transacting parties that are the subject of the cost and market 512
impact review may respond in writing to the findings in the preliminary 513
report issued in accordance with subsection (e) of this section not later 514
than thirty days after the issuance of the preliminary report. Not later 515
than sixty days after the issuance of the preliminary report, the [unit] 516
Attorney General shall issue a final report of the cost and market impact 517
review. [The unit shall refer to the Attorney General any final report on 518
any proposed transfer of ownership that meets the criteria described in 519
subsection (e) of this section.] 520
(g) Nothing in this section shall prohibit a transfer of ownership of a 521
hospital, provided any such proposed transfer shall not be completed 522
(1) less than thirty days after the [unit] Attorney General has issued a 523
final report on a cost and market impact review, if such review is 524
required, or (2) while any action brought by the Attorney General 525
pursuant to subsection (h) of this section is pending and before a final 526
judgment on such action is issued by a court of competent jurisdiction. 527
(h) After the [unit refers a final report on a transfer of ownership of a 528
hospital to the Attorney General under subsection (f) of this section] 529
Attorney General has issued a final report on the cost and market impact 530
review, the Attorney General may: (1) Conduct an investigation to 531 Substitute Bill No. 440
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determine whether the transacting parties engaged, or, as a result of 532
completing the transfer of ownership of the hospital, are expected to 533
engage in unfair methods of competition, anti-competitive behavior or 534
other conduct in violation of chapter 624 or 735a or any other state or 535
federal law; and (2) if appropriate, take action under chapter 624 or 735a 536
or any other state law to protect consumers in the health care market. 537
The [unit's] final cost and market impact review report may be evidence 538
in any such action. 539
(i) For the purposes of this section, the provisions of chapter 735a may 540
be directly enforced by the Attorney General. Nothing in this section 541
shall be construed to modify, impair or supersede the operation of any 542
state antitrust law or otherwise limit the authority of the Attorney 543
General to (1) take any action against a transacting party as authorized 544
by any law, or (2) protect consumers in the health care market under any 545
law. Notwithstanding subdivision (1) of subsection (a) of section 42-546
110c, the transacting parties shall be subject to chapter 735a. 547
(j) The [unit] Attorney General shall retain an independent consultant 548
with expertise on the economic analysis of the health care market and 549
health care costs and prices to conduct each cost and market impact 550
review, as described in this section. The [unit] transacting parties shall 551
submit three proposed independent consultants to the Attorney 552
General, who shall select one such independent consultant to conduct 553
the cost and market impact review. The Attorney General shall submit 554
bills for such services to the purchaser, as defined in subsection (d) of 555
section 19a-639. Such purchaser shall pay such bills not later than thirty 556
days after receipt. Such bills shall not exceed two hundred thousand 557
dollars per application. The provisions of chapter 57, sections 4-212 to 4-558
219, inclusive, and section 4e-19 shall not apply to any agreement 559
executed pursuant to this subsection. 560
(k) Any employee of the unit who [directly oversees or] assists in 561
conducting a cost and market impact review shall not take part in factual 562
deliberations or the issuance of a preliminary or final decision on the 563
certificate of need application concerning the transfer of ownership of a 564 Substitute Bill No. 440
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hospital that is the subject of such cost and market impact review. 565
(l) The executive director of the Office of Health Strategy shall adopt 566
regulations, in accordance with the provisions of chapter 54, concerning 567
cost and market impact reviews and to administer the provisions of this 568
section. Such regulations shall include definitions of the following 569
terms: "Dispersed service area", "health status adjusted total medical 570
expense", "major service category", "relative prices", "total health care 571
spending" and "health care services". The executive director may 572
implement policies and procedures necessary to administer the 573
provisions of this section while in the process of adopting such policies 574
and procedures in regulation form, provided the executive director 575
publishes notice of intention to adopt the regulations on the office's 576
Internet web site and the eRegulations System not later than twenty 577
days after implementing such policies and procedures. Policies and 578
procedures implemented pursuant to this subsection shall be valid until 579
the time such regulations are effective. 580
Sec. 5. (NEW) (Effective October 1, 2024) On and after October 1, 2024, 581
an insurance company that invests in any institution, as defined in 582
section 19a-490 of the general statutes, shall not exercise operational 583
control, managerial control or decision-making authority relating to the 584
institution's delivery of health care services. 585
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2024 19a-638
Sec. 2 October 1, 2024 19a-639a
Sec. 3 from passage New section
Sec. 4 October 1, 2024 19a-639f
Sec. 5 October 1, 2024 New section
Statement of Legislative Commissioners:
In Section 1(a)(16), ", except as provided in subdivision (27) of
subsection (b) of this section" was added for clarity and consistency with
other provisions of the section.
Substitute Bill No. 440
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PH Joint Favorable Subst. -LCO