Connecticut 2022 Regular Session Status: Passed House 4 D cosponsors

HB 5042 — AN ACT CONCERNING HEALTH CARE COST GROWTH.

Last action — FILE NO. 677

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. 3
    Passed House
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2022 Regular Session. It reached “Passed House” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Bill Text

What changed in the latest version

866 added · 497 removed

866 line(s) added, 497 removed.

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House of Representatives General Assembly File No.
House of Representatives File No.
56 February Session, 2022 Substitute House Bill No.
677 General Assembly February Session, 2022Reprint of File No.
5042 House of Representatives, March 22, 2022 The Committee on Insurance and Real Estate reported through REP.
56) Substitute House Bill No.
WOOD, K.
5042 As Amended by House Amendment Schedule "A" Approved by the Legislative Commissioner April 29, 2022 AN ACT CONCERNING HEALTH CARE COST GROWTH.
ofthe29thDist., Chairperson oftheCommittee on the part of the House, that the substitute bill ought to pass.
AN ACT CONCERNING HEALTH CARE COST GROWTH.
The department head of said office shall be the executive director ofthe Office ofHealthStrategy,who shallbeappointedby theGovernor in accordance with the provisions of sections 4-5 to 4-8, inclusive, with the powers and duties therein prescribed.
The department head of said office shall be the executive director oftheOffice ofHealthStrategy,who shallbeappointedby theGovernor in accordance with the provisions of sections 4-5 to 4-8, inclusive, as amended by this act, with the powers and duties therein prescribed.
(1) Developing and implementing a comprehensive and cohesive health care vision for the state, including, but not limited to, a sHB5042 / File No.
(1) Developing and implementing a comprehensive and cohesive sHB5042 / File No.
56 1 sHB5042 File No.
677 sHB5042 File No.
56 coordinated state health care cost containment strategy;
677 health care vision for the state, including, but not limited to, a coordinated state health care cost containment strategy;
(3) [Directing] (A) Developing, innovating, directing and overseeing health care delivery and payment models in the state that reduce health care cost growth and improve the quality of patient care, including, but not limited to, the State Innovation Model Initiative and related successor initiatives, (B) setting an annual health care cost growth benchmark and primary care spending target pursuant to section 3 of this act, (C) developing and adopting health care quality benchmarks pursuant to section 3 of this act, (D) developing strategies, in consultation with stakeholders, to facilitate adherence with such benchmarks and targets developed pursuant to section 3 of this act, (E) enhancing the transparency of provider entities, as defined in subdivision (13) of section 2 of this act, (F) monitoring the development of accountable care organizations and patient-centered medical homes in the state, and (G) monitoring the adoption of alternative payment methodologies in the state;
(3) Directing and overseeing the State Innovation Model Initiative and related successor initiatives;
sHB5042 / File No.
(6) Convening forums and meetings with state government and external stakeholders, including, but not limited to, the Connecticut Health Insurance Exchange, to discuss health care issues designed to develop effective health care cost and quality strategies;
56 2 sHB5042 File No.
[and] (7) (A) Administering the Covered Connecticut program established under section 19a-754c in consultation with the Commissioner of Social Services, Insurance Commissioner and Connecticut Health Insurance Exchange, and (B) consulting with the Commissioner of Social Services and Insurance Commissioner for the purposes set forth in section 17b- 312;
56 (6) Convening forums and meetings with state government and external stakeholders, including, but not limited to, the Connecticut Health Insurance Exchange, to discuss health care issues designed to develop effective health care cost and quality strategies;
[.] and sHB5042 / File No.
and (7) (A) Administering the Covered Connecticut program established under section 19a-754c in consultation with the Commissioner of Social Services, Insurance Commissioner and Connecticut Health Insurance Exchange, and (B) consulting with the Commissioner of Social Services and Insurance Commissioner for the purposes set forth in section 17b- 312.
677 sHB5042 File No.
677 (8) (A) Setting an annual health care cost growth benchmark and primary care spending target pursuant to section 3 of this act, (B) developing and adopting health care quality benchmarks pursuant to section 3 of this act, (C) developing strategies, in consultation with stakeholders, to meet such benchmarks and targets developed pursuant to section 3 of this act, (D) enhancing the transparency of provider entities, as defined in subdivision (13) of section 2 of this act, (E) monitoring the development of accountable care organizations and patient-centered medical homes in the state, and (F) monitoring the adoption of alternative payment methodologies in the state.
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677 sHB5042 File No.
56 pursuant to section 38a-479qqq of the general statutes, (B) studied or listed pursuant to subsection (c) or (d) of section 19a-754b of the general statutes, or (C) in a therapeutic class of drugs that the executive director determines, through public or private reports, has had a substantial impact on prescription drug expenditures, net of rebates, as a percentage of total health care expenditures;
677 pursuant to section 38a-479qqq of the general statutes, (B) studied or listed pursuant to subsection (c) or (d) of section 19a-754b of the general statutes, or (C) in a therapeutic class of drugs that the executive director determines, through public or private reports, has had a substantial impact on prescription drug expenditures, net of rebates, as a percentage of total health care expenditures;
(2) "Executive director" means the executive director of the office;
(2) "Executive director" means the executive director of the Office of Health Strategy;
(6) "Net cost of private health insurance" means the difference between premiums earned and benefits incurred, and includes insurers' costs of paying bills, advertising, sales commissions, and other administrative costs, net additions or subtractions from reserves, rate credits and dividends, premium taxes, and profits or losses;
(6) "Net cost of private health insurance" means the difference between premiums earned and benefits incurred, and includes insurers' costs of paying bills, advertising, sales commissions, and other administrative costs, net additions or subtractions from reserves, rate credits and dividends, premium taxes and profits or losses;
(8) "Other entity" means a drug manufacturer, pharmacy benefits manager, or other health care provider that is not considered a provider entity;
(8) "Other entity" means a drug manufacturer, pharmacy benefits manager or other health care provider that is not considered a provider entity;
(9) "Payer" means a payer, including Medicaid, Medicare and governmental and nongovernment health plans, and includes any organization acting as payer that is a subsidiary, affiliate or business owned or controlled by a payer that, during a given calendar year, pays health care providers for health care services or pharmacies or provider entities for prescription drugs designated by the executive director;
(9) "Payer" means a payer, including Medicaid, Medicare and governmental and nongovernment health plans, and includes any organization acting as payer that is a subsidiary, affiliate or business owned or controlled by a payer that, during a given calendar year, pays health care providers for health care services or pharmacies or provider sHB5042 / File No.
sHB5042 / File No.
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677 entities for prescription drugs designated by the executive director;
56 (10) "Performance year" means the most recent calendar year for which data were submitted for the applicable health care cost growth benchmark, primary care spending target or health care quality benchmark;
(10) "Performance year" means the most recent calendar year for which data were submitted for the applicable health care cost growth benchmark, primary care spending target or health care quality benchmark;
and (16) "Total medical expense" means the total cost of care for the patient population of a payer or provider entity for a given calendar year, where cost is calculated for such year as the sum of (A) all claims- based spending paid to providers by public and private payers, and net of pharmacy rebates, (B) all nonclaims payments for such year, including, but not limited to, incentive payments and care coordination payments, and (C) all patient cost-sharing amounts expressed on a per sHB5042 / File No.
and (16) "Total medical expense" means the total cost of care for the patient population of a payer or provider entity for a given calendar year, where cost is calculated for such year as the sum of (A) all claims- based spending paid to providers by public and private payers, and net of pharmacy rebates, (B) all nonclaims payments for such year, sHB5042 / File No.
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56 capita basis for the patient population of a payer or provider entity in this state.
677 including, but not limited to, incentive payments and care coordination payments, and (C) all patient cost-sharing amounts expressed on a per capita basis for the patient population of a payer or provider entity in this state.
(B) In developing the health care cost growth benchmarks and primary care spending targets pursuant to this subdivision, the executive director shall consider (i) any historical and forecasted changes in median income for individuals in the state and the growth rate of potential gross state product, (ii) the rate of inflation, and (iii) the most recent report, if any, prepared by the executive director pursuant to subsection (b) of section 4 of this act.
(B) In developing the health care cost growth benchmarks and primary care spending targets pursuant to this subdivision, the executive director shall consider (i) any historical and forecasted changes in median income for individuals in the state and the growth rate of potential gross state product, (ii) the rate of inflation, and (iii) the most recent report prepared by the executive director pursuant to subsection (b) of section 4 of this act.
(C) (i) The executive director may hold informational public hearings concerning the benchmarks and targets set pursuant to subsection (a) or subdivision (1) of subsection (b) of this section.
(C) (i) The executive director shall hold at least one informational publichearingpriortoadoptingthehealthcarecostgrowthbenchmarks and primary care spending targets for each succeeding five-year period described in this subdivision.
The executive director may hold informational public hearings concerning any annual health care cost growth benchmark and primary care spending target set pursuant to subsection (a) or subdivision (1) of subsection (b) of this section.
The executive director sHB5042 / File No.
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677 shall make available on the office's Internet web site a summary of any such informational public hearing and include the executive director's recommendations, if any, to modify or not to modify any such annual benchmark or target.
sHB5042 / File No.
(iii) The executive director shall annually (I) review the current and projected rate of inflation, and (II) include on the office's Internet web site the executive director's findings of such review, including the reasons for making or not making a modification to any applicable health care cost growth benchmark.
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If the executive director determines that the rate of inflation requires modification of any health care cost growth benchmark adopted under this section, the executive director may modify such benchmark.
56 (iii) If the executive director determines that the rate of inflation requires modification of any health care cost growth benchmark adopted under this section, the executive director may modify such benchmark.
In such event, the executive director shall not berequired to hold aninformationalpublichearing concerning such modified health care cost growth benchmark.
In such event, the executive director shall not be required to hold an informational public hearing concerning such modified health care cost growth benchmark.
(B) In developing annual health care quality benchmarks pursuant to this subdivision, the executive director shall consider (i) quality measures endorsed by nationally recognized organizations, including, but not limited to, the National Quality Forum, the National Committee for Quality Assurance, the Centers for Medicare and Medicaid Services, the Centers for Disease Control, the Joint Commission and expert organizations that develop health equity measures, and (ii) measures that:
(B) In developing annual health care quality benchmarks pursuant to this subdivision, the executive director shall consider (i) quality measures endorsed by nationally recognized organizations, including, but not limited to, the National Quality Forum, the National Committee for Quality Assurance, the Centers for Medicare and Medicaid Services, sHB5042 / File No.
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677 the Centers for Disease Control, the Joint Commission and expert organizations that develop health equity measures, and (ii) measures that:
(C) (i) The executive director may hold informational public hearings concerning the quality measures the executive director proposes to adopt as health care quality benchmarks.
(C) (i) The executive director shall hold at least one informational public hearing prior to adopting the health care quality benchmarks for each succeeding five-year period described in this subdivision.
The executive director may hold informational public hearings concerning the quality measures the executive director proposes to adopt as health care quality benchmarks.
sHB5042 / File No.
The executive director shall make available on the office's Internet web site a summary of any such informational public hearing and include the executive director's recommendations, if any, to modify or not modify any such health care quality benchmark.
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(ii) If the executive director determines, after any informational public hearing held pursuant to this subparagraph, that modifications to any health care quality benchmarks are, in the executive director's discretion, reasonably warranted, the executive director may modify such quality benchmarks.
56 (ii) If the executive director determines, after any informational public hearing held pursuant to this subparagraph, that modifications to any health care quality benchmarks are, in the executive director's discretion, reasonably warranted, the executive director may modify such quality benchmarks.
(c)The executive director may enter into suchcontractualagreements as may be necessary to carry out the purposes of this section, including, but not limited to, contractual agreements with actuarial, economic and other experts and consultants.
(c)The executive director may enter into suchcontractualagreements as may be necessary to carry out the purposes of this section, including, but not limited to, contractual agreements with actuarial, economic and sHB5042 / File No.
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677 other experts and consultants.
sHB5042 / File No.
(1) Trends in major service category spending;
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56 (1) Trends in major service category spending;
and (3) The net cost of private health insurance by payer by market segment, including individual, small group, large group, self-insured, student and Medicare Advantage markets.
(3) The net cost of private health insurance by payer by market segment, including individual, small group, large group, self-insured, student and Medicare Advantage markets;
(c) The executive director shall annually submit a request to the federal Centers for Medicare and Medicaid Services for the unadjusted total medical expenses of Connecticut residents.
and (4) Any other factors the executive director deems relevant to providing context on such data, which shall include, but not be limited to, the following factors:
(d) Not later than August 15, 2023, and annually thereafter, each payer or provider entity shall report to the executive director in a form andmanner prescribed by theexecutive director,for thepreceding year, andforprioryearsiftheexecutivedirectorsorequestsbasedonmaterial changes to data previously submitted, on the health care quality benchmarks adopted pursuant to section 3 of this act.
(A) The impact of the rate of inflation and rate of medical inflation;
(B) impacts, if any, on access to care;
and (C) responses to public health crises or similar emergencies.
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677 (c) The executive director shall annually submit a request to the federal Centers for Medicare and Medicaid Services for the unadjusted total medical expenses of Connecticut residents.
(d) Not later than August 15, 2023, and annually thereafter, each payer or provider entity shall report to the executive director in a form andmanner prescribed by theexecutive director,for thepreceding year, andforprioryearsiftheexecutivedirectorsorequestsbasedon material changes to data previously submitted, on the health care quality benchmarks adopted pursuant to section 3 of this act.
(NEW) (Effective from passage) (a) (1) For each calendar year, beginning on January 1, 2023, the executive director shall identify, not later than May first of such calendar year, each payer or provider entity that exceeded the health care cost growth benchmark or failed to meet the primary care spending target for the performance year.
(NEW) (Effective from passage) (a) (1) For each calendar year, beginning on January 1, 2023, the executive director shall, if the payer or provider entity subject to the cost growth benchmark or primary care spending target so requests, meet with such payer or provider entity to review and validate the total medical expenses data collected pursuant to section 4 of this act for such payer or provider entity.
For each calendar year beginning on or after January 1, 2024, the executive director shall identify, not later than May first of such calendar year, each payer or provider entity that failed to meet the health care quality sHB5042 / File No.
The executive director shall review information provided by the payer or provider entity and, if deemed necessary, amend findings for such payer or provider prior to the identification of payer or provider entities that exceeded the health care cost growth benchmark or failed to meet the primary care spending target for the performance year as set forth in section 4 of this act.
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The executive director shall identify, not later than May first of such calendar year, each payer or provider entity that exceeded the health care cost growth benchmark or failed to meet the primary care spending target for the performance year.
56 benchmarks for the performance year.
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(2) Not later than thirty days after the executive director identifies each payer or provider entity pursuant to subsection (a) of this section, the executive director shall send a notice to each such payer or provider entity.
677 sHB5042 File No.
677 (2) For each calendar year beginning on or after January 1, 2024, the executive director shall, if the payer or provider entity subject to the health care quality benchmarks for the performance year so requests, meet with such payer or provider entity to review and validate the quality data collected pursuant to section 4 of this act for such payer or provider entity.
The executive director shall review information provided by the payer or provider entity and, if deemed necessary, amend findings for such payer or provider prior to the identification of payer or provider entities that exceeded the health care quality benchmark as set forth in section 4 of this act.
The executive director shall identify, not later than May first of such calendar year, each payer or provider entity that exceeded the health care quality benchmark for the performance year.
(3) Not later than thirty days after the executive director identifies each payer or provider entity pursuant to subdivisions (1) and (2) of this subsection, the executive director shall send a notice to each such payer or provider entity.
(A) That the executive director has identified such payer or provider entity pursuant to subdivision (1) of this subsection;
(A) That the executive director has identified such payer or provider entity pursuant to subdivision (1) or (2) of this subsection;
and (B) The factual basis for the executive director's identification of such payer or provider entity pursuant to subdivision (1) of this subsection.
and (B) The factual basis for the executive director's identification of such payer or provider entity pursuant to subdivision (1) or (2) of this subsection.
(A) The report, if any, prepared by the executive director pursuant to subsection (b) of section 4 of this act for such calendar year;
(A) The report prepared by the executive director pursuant to sHB5042 / File No.
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677 subsection (b) of section 4 of this act for such calendar year;
sHB5042 / File No.
(2) The executive director shall account for costs, net of rebates and discounts, when identifying other entities pursuant to this section.
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56 (2) The executive director shall account for costs, net of rebates and discounts, when identifying other entities pursuant to this section.
(A) The report, if any, most recently prepared by the executive director pursuant to subsection (b) of section 4 of this act;
(A) The report most recently prepared by the executive director pursuant to subsection (b) of section 4 of this act;
(2) The executive director may require any payer or provider entity that, for the performance year, is found to be a significant contributor to health care cost growthinthestate or hasfailedto meet theprimary care spending target, to participate in such hearing.
(2) The executive director may require any payer or provider entity that, for the performance year, is found to be a significant contributor to sHB5042 / File No.
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677 health care cost growthinthestate or hasfailedto meet theprimary care spending target, to participate in such hearing.
(3) The executive director may require that any other entity that is found to be a significant contributor to health care cost growth in this stateduringtheperformanceyearparticipateinsuchhearing.Anyother entity that is required to participate in such hearing shall provide testimony on issues identified by the executive director and provide sHB5042 / File No.
(3) The executive director may require that any other entity that is found to be a significant contributor to health care cost growth in this stateduringtheperformanceyearparticipateinsuchhearing.Anyother entity that is required to participate in such hearing shall provide testimony on issues identified by the executive director and provide additional information on actions taken to reduce such other entity's contribution to future state-wide health care costs.
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If such other entity is a drug manufacturer, and the executive director requires that such drug manufacturer participate in such hearing with respect to a specific drug or class of drugs, such hearing may, to the extent possible, include representativesfromatleast onebrand-name manufacturer,onegeneric manufacturer andoneinnovator company that islessthan ten yearsold.
56 additional information on actions taken to reduce such other entity's contribution to future state-wide health care costs.
If such other entity is a drug manufacturer, and the executive director requires that such drug manufacturer participate in such hearing with respect to a specific drug or class of drugs, such hearing may, to the extent possible, include representativesfromatleast onebrand-name manufacturer,onegeneric manufacturer andoneinnovator company that islessthan tenyearsold.
and (B) Disclose the executive director's recommendations, if any, concerning strategies to increase the efficiency of the state's health care system, including, but not limited to, any recommended legislation concerning the state's health care system.
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677 (B) Include the findings from the report prepared pursuant to subsection (b) of section 4 of this act;
(C) Describe a plan for monitoring any unintended adverse consequences resulting from the adoption of cost growth benchmarks and primary care spending targets and the results of any findings from the implementation of such plan;
and (D) Disclose the executive director's recommendations, if any, concerning strategies to increase the efficiency of the state's health care system, including, but not limited to, any recommended legislation concerning the state's health care system.
(A) The report, if any, most recently prepared by the executive director pursuant to subsection (e) of section 4 of this act;
(A) The report most recently prepared by the executive director pursuant to subsection (e) of section 4 of this act;
and sHB5042 / File No.
and (B) Any other matters that the executive director, in the executive director's discretion, deems relevant for the purposes of this section.
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56 (B) Any other matters that the executive director, in the executive director's discretion, deems relevant for the purposes of this section.
(3) Not later than October 15, 2024, and annually thereafter, the executive director shall prepare and submit a report, in accordance with section 11-4a of the general statutes, to the joint standing committees of the General Assembly having cognizance of matters relating to insurance and public health.
(3) Not later than October 15, 2024, and annually thereafter, the executive director shall prepare and submit a report, in accordance with section 11-4a of the general statutes, to the joint standing committees of sHB5042 / File No.
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677 the General Assembly having cognizance of matters relating to insurance and public health.
and (B) Disclose the executive director's recommendations, if any, concerning strategies to improve the quality of the state's health care system, including, but not limited to, any recommended legislation concerning the state's health care system.
(B) Include the findings from the report prepared pursuant to subsection (e) of section 4 of this act;
and (C) Disclose the executive director's recommendations, if any, concerning strategies to improve the quality of the state's health care system, including, but not limited to, any recommended legislation concerning the state's health care system.
This act shall take effect as follows and shall amend the following sections:
Sec.
8.
(NEW) (Effective January 1, 2023) (a) For the purposes of this section, "health enhancement program" means a health benefit program that ensures access and removes barriers to essential, high-value clinical services.
(b) (1) Not later than January 1, 2024, each insurer, health care center, hospital service corporation, medical service corporation, fraternal benefit society or other entity that delivers, issues for delivery, renews, amends or continues in this state an individual or group health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes shall develop not less than two health enhancement programs under such policy.
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56 Section 1 from passage 19a-754a Sec.
677 (2) Each health enhancement program developed pursuant to subdivision (1) of this subsection shall:
(A) Be available to each insured under the individual or group health insurance policy;
and (B) Provide to each insured under the individual or group health insurance policy incentives that are directly related to the provision of health insurance coverage, provided such insured chooses to complete certain preventive examinations and screenings recommended by the United States Preventive Services Task Force with a rating of "A" or "B".
(3) No health enhancement program developed pursuant to subdivision (1) of this subsection shall impose any penalty or other negative incentive on an insured under the individual or group health insurance policy nor shall any insured be required to participate in a health enhancement program.
(c) Each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 ofthegeneralstatutesdelivered,issuedfor delivery,renewed,amended or continued in this state shall include coverage for the health enhancement programs that the insurer, health care center, hospital service corporation, medical service corporation, fraternal benefit society or other entity that delivered, issued, renewed, amended or continued such policy developed pursuant to this section.
(d) Each group health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 ofthegeneralstatutesdelivered,issuedfor delivery,renewed,amended or continued in this state shall include coverage for the health enhancement programs that the insurer, health care center, hospital service corporation, medical service corporation, fraternal benefit society or other entity that delivered, issued, renewed, amended or continued such policy developed pursuant to this section.
(e) The Insurance Commissioner may adopt regulations, in sHB5042 / File No.
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677 accordance with the provisions of chapter 54 of the general statutes, to implement the provisions of this section.
Sec.
9.
Subsection (a) of section 19a-639a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) An application for a certificate of need shall be filed with the unit in accordance with the provisions of this section and any regulations adopted by the Office of Health Strategy.
The application shall address theguidelinesandprinciplessetforthin(1)subsection(a)ofsection19a- 639, and (2) regulations adopted by the department.
The applicant shall include with the application a nonrefundable application fee [of five hundred dollars] based on the cost of the project.
The amount of the fee shall be as follows:
(A) One thousand dollars for a project that will cost not greater than fifty thousand dollars;
(B) two thousand dollars for a project that will cost greater than fifty thousand dollars but not greater than one hundred thousand dollars;
(C) three thousand dollars for a project that will cost greater than one hundred thousand dollars but not greater than five hundred thousand dollars;
(D) four thousand dollars for a project that will cost greater than five hundred thousand dollars but not greater than one million dollars;
(E) five thousand dollars for a projectthatwillcostgreaterthanonemilliondollarsbutnot greaterthan five million dollars;
(F) eight thousand dollars for a project that will cost greater than five million dollars but not greater than ten million dollars;
and (G) ten thousand dollars for a project that will cost greater than ten million dollars.
Sec.
10.
Section 19a-630 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
As used in this chapter, unless the context otherwise requires:
(1) "Affiliate" means a person, entity or organization controlling, controlled by or under common control with another person, entity or organization.
Affiliate does not include a medical foundation organized under chapter 594b.
sHB5042 / File No.
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677 (2) "Applicant" means any person or health care facility that applies for a certificate of needpursuant to section 19a-639a, as amended by this act.
(3) "Bed capacity" means the total number of inpatient beds in a facility licensed by the Department of Public Health under sections 19a- 490 to 19a-503, inclusive.
(4) "Capital expenditure" means an expenditure that under generally accepted accounting principles consistently applied is not properly chargeable as an expense of operation or maintenance and includes acquisition by purchase, transfer, lease or comparable arrangement, or through donation, if the expenditure would have been considered a capital expenditure had the acquisition been by purchase.
(5) "Certificate of need" means a certificate issued by the unit.
(6) "Days" means calendar days.
(7) "Executive director" means the executive director of the Office of Health Strategy.
(8) "Free clinic" means a private, nonprofit community-based organization that provides medical, dental, pharmaceutical or mental health services at reduced cost or no cost to low-income, uninsured and underinsured individuals.
(9) "Large group practice" means eight or more full-time equivalent physicians, legally organized in a partnership, professional corporation, limited liability company formed to render professional services, medical foundation, not-for-profit corporation, faculty practice plan or other similar entity (A) in which each physician who is a member of the groupprovidessubstantially thefullrange of servicesthat thephysician routinely provides, including, but not limited to, medical care, consultation, diagnosis or treatment, through the joint use of shared office space, facilities, equipment or personnel;
(B) for which substantially all of the services of the physicians who are members of sHB5042 / File No.
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677 the group are provided through the group and are billed in the name of the group practice and amounts so received are treated as receipts of the group;
or (C) in which the overhead expenses of, and the income from, the group are distributed in accordance with methods previously determined by members of the group.
An entity that otherwise meets the definition of group practice under this section shall be considered a group practice although its shareholders, partners or owners of the group practice include single-physician professional corporations, limited liability companies formed to render professional services or other entities in which beneficial owners are individual physicians.
(10) "Health care facility" means (A) hospitals licensed by the DepartmentofPublicHealthunderchapter368v;
(B)specialtyhospitals;
(C) freestanding emergency departments;
(D) outpatient surgical facilities, as defined in section 19a-493b and licensed under chapter 368v;
(E) a hospital or other facility or institution operated by the state that provides services that are eligible for reimbursement under Title XVIII or XIX of the federal Social Security Act, 42 USC 301, as amended;
(F) a central service facility;
(G) mental health facilities;
(H) substance abuse treatment facilities;
and (I) any other facility requiring certificate of need review pursuant to subsection (a) of section 19a-638.
"Health care facility" includes any parent company, subsidiary, affiliate or joint venture, or any combination thereof, of any such facility.
(11) "Nonhospital based" means located at a site other than the main campus of the hospital.
(12) "Office" means the Office of Health Strategy.
(13) "Person" means any individual, partnership, corporation, limited liability company, association, governmental subdivision, agency or public or private organization of any character, but does not include the agency conducting the proceeding.
(14) "Physician" has the same meaning as provided in section 20-13a.
(15) "Termination of services" means the cessation of any services for sHB5042 / File No.
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677 a period greater than one hundred eighty days.
[(15)] (16) "Transfer of ownership" means a transfer that impacts or changes the governance or controlling body of a health care facility, institution or large group practice, including, but not limited to, all affiliations, mergers or any sale or transfer of net assets of a health care facility.
[(16)] (17) "Unit" means the Health Systems Planning Unit.
Sec.
11.
Section 4-5 of the 2022 supplement to the general statutes, as amended by section 6 of public act 17-237, section 279 of public act 17-2 of the June special session, section 20 of public act 18-182, section 283 of public act 19-117 and section 254 of public act 21-2 of the June special session, is repealed and the following is substituted in lieu thereof (Effective July 1, 2022):
As used in sections 4-6, 4-7 and 4-8, the term "department head" meansSecretaryoftheOffice ofPolicy andManagement, Commissioner of Administrative Services, Commissioner of Revenue Services, Banking Commissioner, Commissioner of Children and Families, Commissioner of Consumer Protection, Commissioner of Correction, Commissioner of Economic and Community Development, State Board of Education, Commissioner of Emergency Services and Public Protection, Commissioner of Energy and Environmental Protection, Commissioner of Agriculture, Commissioner of Public Health, Insurance Commissioner, Labor Commissioner, Commissioner of MentalHealth andAddictionServices,Commissioner ofSocialServices, Commissioner of Developmental Services, Commissioner of Motor Vehicles, Commissioner of Transportation, Commissioner of Veterans Affairs, Commissioner of Housing, Commissioner of Rehabilitation Services, the Commissioner of Early Childhood, the executive director of the Office of Health Strategy, the executive director of the Office of Military Affairs, the executive director of the Technical Education and Career System and the Chief Workforce Officer.
As used in sections 4-6 and 4-7, "department head" also means the Commissioner of Education.
sHB5042 / File No.
677 sHB5042 File No.
677 This act shall take effect as follows and shall amend the following sections:
Section 1 from passage 19a-754a Sec.
7 from passage New section Statement of Legislative Commissioners:
7 from passage New section Sec.
In Section 1(b)(3), "primary care target" was changed to "primary care spending target" for consistency;
8 January 1, 2023 New section Sec.
in Section 2(10), "cost growth benchmark" was changed to "health care cost growth benchmark", "primary care spend target" was changed to "primary care spending target", and "quality benchmark" was changed to "health care quality benchmark" for consistency;
9 from passage 19a-639a(a) from passage Sec.
in Section 2(12), "Primary care target" was changed to "Primary care spending target" for consistency;
10 19a-630 Sec.
and in Section 3(b)(2)(C)(ii), "quality benchmarks" was changed to "health care quality benchmarks" for consistency.
11 July 1, 2022 4-5 sHB5042 / File No.
INS Joint Favorable Subst.
677 21 sHB5042 File No.
-LCO sHB5042 / File No.
677 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.
56 14 sHB5042 File No.
56 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.
None Municipal Impact:
See Below Municipal Impact:
The Out Years State Impact:
The bill, which requires private health carriers in Connecticut to develop at least two health enhancement programs (HEPs) under their policies, does not result in a fiscal impact to the state.
None Municipal Impact:
It is anticipated that the Insurance Department, which may adopt implementing regulations under the bill, can review compliance within existing resources.
None sHB5042 / File No.
It is unknown if there will be a fiscal impact to fully insured municipalities as a result of HEP provisions of the bill.
56 15 sHB5042 File No.
The bill also changes the CON application fee from $500 to a range of $1,000 to $10,000 depending on the proposed project's cost.
56 OLR Bill Analysis sHB 5042 AN ACT CONCERNING HEALTH CARE COST GROWTH.
Based on a four-year average of CON proposals, the bill's fee schedule is anticipated to generate an additional $100,000 in annual revenue.
The current fee of $500 generates approximately $12,500 annually.
This increase in the application fee results in a cost to UConn Health Center each time the entity applies for a CON.
The health center expects to apply for one CON in either FY 23 or FY 24.
The cost will be equal to the difference between the current fee ($500) and the new fees based on sHB5042 / File No.
677 22 sHB5042 File No.
677 project costs ($1,000 to $10,000).
Lastly, the bill adds the executive director of OHS to the statutory definition of a department head.
This has no fiscal impact.
House "A" strikes the original bill and its associated fiscal impact, thus becoming the bill with the above referenced fiscal impact.
The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.
sHB5042 / File No.
677 23 sHB5042 File No.
677 OLR Bill Analysis sHB 5042 (as amended by House "A")* AN ACT CONCERNING HEALTH CARE COST GROWTH.
(In doing so, it codifies severalprovisionsof Executive Order 5.) When developing these benchmarks and spending targets, the executive director may hold informational public hearings and consider certain specified information.
(Indoing so,it codifies severalprovisionsofExecutive Order 5.) When developing these benchmarks and spending targets, the executive director may hold informational public hearings and consider certain specified information.
The bill also allows the executive director to adopt implementing regulations to carry out the bill’s provisions and OHS’s existing sHB5042 / File No.
sHB5042 / File No.
56 16 sHB5042 File No.
677 24 sHB5042 File No.
56 statutory obligations.
677 The bill also allows the executive director to adopt implementing regulations to carry out the bill’s provisions and OHS’s existing statutory obligations (§ 7).
Separately, the bill requires health carriers (e.g., insurers and HMOs) that deliver, issue, renew, amend, or continue certain individual and grouphealthinsurance policiesinthestatetodevelopatleasttwohealth enhancement programs (HEPs) under the policies by January 1, 2024.
Under the bill, an HEP is a health benefit program that ensures access and removes barriers to essential, high-value clinical services.
The bill authorizes the insurance commissioner to adopt related implementing regulations.
Additionally, the bill addresses matters concerning the state’s certificate of need (CON) program, which OHS administers.
Under the CON law, health care institutions (e.g., hospitals, freestanding emergency departments, outpatient surgical facilities) must generally receive state approval when establishing new facilities or services, changing ownership, acquiring certain equipment, or terminating services.
The bill increases the nonrefundable CON application fee from $500 to a range of $1,000 to $10,000 depending on the proposed project’s cost.
Also, for purposes of applying the CON requirements, the bill defines “termination of services” to mean ending services for more than days (§ 10).
Lastly, the bill makes technical changes, including to ensure that the OHS executive director remains a department head as of July 1, 2022 (§ 11).
*House Amendment “A” (1) requires, rather than allows, the OHS executive director to hold certain hearings related to benchmarks and spending targets;
(2) requires she meet with certain entities before identifying them as missing these benchmarks or exceeding the spending targets;
(3) makes several minor changes to the benchmark and spending target provisions, including to the type of information sHB5042 / File No.
677 25 sHB5042 File No.
677 certain annual reports to the legislature must contain;
and (4) adds the HEP and CON provisions.
Upon passage § 2 — DEFINITIONS Under the bill, “total medical expense” is the total cost of care for a payer or provider entity’s patient population in a calendar year, calculated as the sum of (1) all claims-based spending paid to providers by public and private payers, net of pharmacy rebates;
Upon passage, except the HEP provisions are effective January 1, 2023, and a technical change is effective July 1, 2022.
§ 2 — DEFINITIONS Under the bill, “total medical expense” is the total cost of care for a payer or provider entity’s patient population in a calendar year, calculated as the sum of (1) all claims-based spending paid to providers by public and private payers, net of pharmacy rebates;
(The specific number of attributed lives required to participate in a total cost of care contract is unclear under the bill.) A “payer” is a government (e.g., Medicaid and Medicare) or non- government health plans, and any of their affiliates, subsidiaries, or businesses acting as a payer that, during any calendar year, pays (1) health care providers for health care services or (2) pharmacies or private entities for prescription drugs that the OHS executive director designates.
(The specific number of attributed lives required to participate in a total cost of care contract is unclear under the bill.) A “payer” is a government (e.g., Medicaid and Medicare) or non- government health plan, and any of their affiliates, subsidiaries, or businesses acting as a payer that, during any calendar year, pays (1) health care providers for health care services or (2) pharmacies or private entities for prescription drugs that the OHS executive director designates.
“Net cost of private health insurance” is the difference between premiums earned and benefits incurred, including the insurers’ cost of paying bills;
“Net cost of private health insurance” is the difference between sHB5042 / File No.
677 26 sHB5042 File No.
677 premiums earned and benefits incurred, including the insurers’ cost of paying bills;
sales commissions and other administrative sHB5042 / File No.
sales commissions and other administrative costs;
56 17 sHB5042 File No.
56 costs;
developing, innovating, directing, and overseeing health care delivery and payment models in the state that reduce health care cost growth and improve the quality of patient care;
setting an annual health care cost growth benchmark and primary care spending target, as described below;
setting an annual health care cost growth benchmark and primary care spending target;
developing and adopting health care quality benchmarks, as described below;
developing and adopting health care quality benchmarks;
developing strategies, in consultation with stakeholders, to meet these benchmarks and targets;
developing strategies, in consultation with stakeholders, to facilitate adherence with these benchmarks and targets;
5.
and 6.
and 5.
Current law requires the office to perform various other duties, including overseeing the State Innovation Model Initiative and related successor initiatives.
The bill specifies that it must also develop, innovate, and direct these initiatives.
health care cost growth benchmarks and annual primary care spending targets as a percentage oftotal medical expenses for the calendar years 2021-2025, inclusive, and 2.
health care cost growth benchmarks and annual primary care spending targets as a percentage of total medical expenses for calendar years 2021 through 2025, and 2.
annual health care quality benchmarks for calendar years 2022 to sHB5042 / File No.
annual health care quality benchmarks for calendar years 2022 through 2025.
56 18 sHB5042 File No.
56 2025.
She must also develop, adopt, and post on the office’s website by July 1, 2025, and every five years after, the following:
sHB5042 / File No.
677 27 sHB5042 File No.
677 The director must develop, adopt, and post on the office’s website by July 1, 2025, and every five years after, the following:
measuresthatmeet standardsofpatient-centerednessandensure sHB5042 / File No.
measuresthatmeet standardsofpatient-centerednessandensure consideration of differences in preferences and clinical characteristics within patient subpopulations.
56 19 sHB5042 File No.
Public Hearings and Modifying Benchmarks or Targets sHB5042 / File No.
56 consideration of differences in preferences and clinical characteristics within patient subpopulations.
677 sHB5042 File No.
Public Hearings and Modifying Benchmarks or Targets The bill allows, but does not require, the executive director to hold informational public hearings on the health care benchmarks and spending targets she sets.
677 The bill requires the executive director to hold at least one informational public hearing before adopting the health care benchmarks and spending targets.
It also authorizes her to hold additional informational hearings on (1) health care cost growth benchmarks and primary care spending targets after they have been set and (2) the quality measures she proposes as health care quality benchmarks.
The bill does not require her to hold an additional public hearing on modifications to annual health care quality benchmarks.
The bill requires the executive director to annually review the current and projected inflation rates and post her findings on OHS’s website, including her reasons for changing or maintaining a benchmark.
The executive director must post a summary of any informational public hearing she holds on these benchmarks and targets on OHS’s website, including her decision to modify them if applicable.
(2) primary care spending as a percentage of total medical expenses;
(2) primary care spending as a percentage of sHB5042 / File No.
677 29 sHB5042 File No.
677 total medical expenses;
Additionally, the bill requires payers and provider entities, starting sHB5042 / File No.
Additionally, the bill requires payers and provider entities, starting by August 15, 2023, to report annually to the executive director on the health care quality benchmarks she adopts.
56 20 sHB5042 File No.
56 by August 15, 2023, to report annually to the executive director on the health care quality benchmarks she adopts.
and 3.
3.
the net cost of health insurance by payer by market segment, including individual, small group, large group, self-insured, student, and Medicare Advantage markets.
the net cost of health insurance by payer by market segment, including individual, small group, large group, self-insured, student, and Medicare Advantage markets;
The bill also requires the executive director to annually request the unadjusted total medical expenses for Connecticut residents from the federal Centers for Medicare and Medicaid Services.
and 4.
any other factors the executive director deems relevant to providing context, which must include the impact of inflation and medical inflation, the impacts on access to care, and responses to public health crises or similar emergencies.
The bill also requires the executive director to annually request the unadjusted total medical expenses for Connecticut residents from the sHB5042 / File No.
677 30 sHB5042 File No.
677 federal Centers for Medicare and Medicaid Services.
Authority to Contract The bill allows the executive director to enter into contractual agreementsnecessarytopreparetheannualhealthcareexpenditureand quality benchmark reports, including contracts with actuarial, sHB5042 / File No.
Authority to Contract The bill allows the executive director to enter into contractual agreementsnecessarytopreparetheannualhealthcareexpenditureand quality benchmark reports, including contracts with actuarial, economic, and other experts and consultants.
56 21 sHB5042 File No.
§§ 5 & 6 — FAILURE TO MEET HEALTH CARE BENCHMARKS AND SPENDING TARGETS Payers and Provider Entities Beginning in 2023, the bill requires the OHS executive director to identify each payer or provider entity that exceeded the health care cost growth benchmark or failed to meet the primary care spending target fortheperformanceyear (i.e.,themostrecentyearforwhichcertaindata are available).
56 economic, and other experts and consultants.
She must do so annually by May 1.
§§ 5 & 6 — FAILURE TO MEET HEALTH CARE BENCHMARKS AND SPENDING TARGETS Payers and Provider Entities Beginning January 1, 2023, the bill requires the OHS executive director to identify each payer or provider entity that exceeded the health care cost growth benchmark or failed to meet the primary care spending target for the performance year (i.e., the most recent year for which certain data is available).
However, before identifying any payer or provider entity, she must meet with it upon its request to review and validate the total medical expense data collected.
She must do so by annually by May 1.
She must review any information the payer or provider entity provides and, if necessary, amend her findings before identifying it as exceeding the health care cost growth benchmark or failing to meet the spending targets.
Starting January 1, 2024, she must also identify, annually by May 1, each payer or provider entity that failed to meet the health care quality benchmarks for the performance year.
Beginning in 2024, she must also identify, annually by May 1, each payer or provider entity that exceeded the health care quality benchmark for the performance year.
Within 30 days of making the identification, the bill requires the executive director to notify the payer or provider entity, in a form and manner she prescribes, that (1) she identified its failure to meet a health care benchmark or spending target and (2) the factual basis for her identification.
She must similarly meet with any payer or provider entity upon its request to review and validate the quality data she collected and, if necessary, amend her findings before making a determination.
Other Contributing Entities Starting January 1, 2023, if the executive director determines that the annual percentage change in total health care expenditures for the performanceyearexceededthehealthcarecostgrowthbenchmark,then the bill requires her to identify any entity that significantly contributed to exceeding the benchmark.
Within 30 days of making these identifications, the bill requires the sHB5042 / File No.
677 31 sHB5042 File No.
677 executive director to notify the payer or provider entity, in a form and manner she prescribes, that (1) she identified its failure to meet a health care benchmark or spending target and (2) the factual basis for her identification.
Other Contributing Entities Beginning in 2023, if the executive director determines that the annual percentage change in total health care expenditures for the performanceyearexceededthehealthcarecostgrowthbenchmark,then the bill requires her to identify any entity that significantly contributed to exceeding the benchmark.
sHB5042 / File No.
3.
56 22 sHB5042 File No.
56 3.
starting by June30,2023,ahearing to comparethegrowthintotal health care expenditures in the performance year to the associated health care cost growth benchmark and 2.
starting by June30,2023,ahearing to comparethegrowthintotal sHB5042 / File No.
677 32 sHB5042 File No.
677 health care expenditures in the performance year to the associated health care cost growth benchmark and 2.
OHS’s most recent annual total health care expenditure report required under the bill, if any;
OHS’s most recent annual total health care expenditure report required under the bill;
The bill allows the executive director to require hearing participation from any payer or provider entity that she determines is a significant sHB5042 / File No.
The bill allows the executive director to require hearing participation from any payer or provider entity that she determines is a significant contributor to the state’s health care cost growth or has failed to meet the primary care spending target for that year.
56 23 sHB5042 File No.
56 contributor the state’s health care cost growth or has failed to meet the primary care spending target for that year.
If the other entity is a drug manufacturer whose participation is required with respect to a specific drug or drug class, then the bill permits the hearing, to theextent possible, to includerepresentativesfromat leastonebrand- name manufacturer;
If the other entity is a drug manufacturer whose participation is required with respect to a specific drug or drug class, then the bill permits the hearing, sHB5042 / File No.
677 33 sHB5042 File No.
677 to theextent possible, to includerepresentativesfromat leastonebrand- name manufacturer;
Annual Legislative Reports on Public Hearing Information ThebillrequiresOHS,startingbyOctober15,2023,toreport annually to the Insurance and Public Health committees on her analysis of the information submitted during the most recent informational public sHB5042 / File No.
Annual Legislative Reports on Public Hearing Information ThebillrequiresOHS,startingbyOctober15,2023,toreport annually to the Insurance and Public Health committees on her analysis of the information submitted during the most recent informational public hearing on total health care expenditures.
56 24 sHB5042 File No.
The report must:
56 hearing on total health care expenditures.
The report must accomplish the following:
describe health care spending trends in the state, including trends in primary care spending as a percentage of total medical expenses, and the factors underlying these trends and 2.
describe health care spending trends in the state, including trends in primary care spending as a percentage of total medical expenses, and the factors underlying these trends;
disclose the office’s recommendations, if any, on strategies to increase the efficiency of the state’s health care system, including any recommended legislative changes.
2.
include any findings from the total health care expenditure report;
3.
describe how to monitor any unintended adverse consequences from the cost growth benchmarks and primary care spending targets, as well as any findings from doing so;
and 4.
disclose the office’s recommendations, if any, on strategies to increase the efficiency of the state’s health care system, including sHB5042 / File No.
677 34 sHB5042 File No.
677 any recommended legislative changes.
describe health care quality trends in the state and their underlying factors and 2.
describe health care quality trends in the state and their underlying factors, 2.
include the findings from the health care quality benchmark report 3.
§ 8 — HEALTH ENHANCEMENT PROGRAMS The bill requires health carriers to develop at least two HEPs by January 1, 2024.
Each HEP must (1) be available to each insured under the health insurance policy and (2) provide incentives to each insured directly related to providing health insurance coverage for insureds choosing to complete certain preventive examinations and screenings the U.S.
Preventive Services Task Force recommends with an “A” or“B” rating.
The bill prohibits an HEP from imposing any penalty or negative incentive on an insured.
It also specifies that an insured cannot be required to participate in an HEP.
The bill also requires certain individual and group health insurance policies to cover the HEPs.
(However, it is unclear if this means they must cover HEP administration costs or the examinations and screenings insureds receive through the HEP.) The bill’s HEP provisions apply to individual and group health sHB5042 / File No.
677 35 sHB5042 File No.
677 insurance policies delivered, issued, renewed, amended, or continued in Connecticut that cover (1) basic hospital expenses;
(2) basic medical- surgical expenses;
(3) major medical expenses;
or (4) hospital or medical services, including those provided under an HMO plan.
§ 9 — CON APPLICATION FEE The bill increases the nonrefundable CON application fee from $500 to a range of $1,000 to $10,000 depending on the proposed project’s cost, as shown in Table 1 below.
Table 1:
CON Application Fees Under the Bill Application Fee Project Cost $1,000 Up to $50,000 $2,000 >$50,000 and up to $100,000 $3,000 >$100,000 and up to $500,000 $4,000 >$500,000 and up to $1 million $5,000 >$1 million and up to $5 million $8,000 >$5 million and up to $10 million $10,000 >$10 million BACKGROUND Related Bills sSB 15 (File 39), reported favorably by the Insurance and Real Estate Committee, contains similar HEP provisions as this bill.
sHB 5449 (File 343), reported favorably by the Insurance and Real Estate Committee, increases CON application fees in different amounts than this bill.
56 25
677 36
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Action History

  1. FILE NO. 677

  2. SENATE CALENDAR NUMBER 516

  3. FAV. RPT., TAB. FOR CAL., SEN.

  4. HOUSE PASSED, HOUSE AMEND. SCH. A

  5. HOUSE REJECTED HOUSE AMEND. SCH. B

  6. HOUSE ADOPTED HOUSE AMEND. SCH. A

  7. FILE NO. 56

  8. HOUSE CALENDAR NUMBER 85

  9. FAV. RPT., TABLED FOR HOUSE CALENDAR

  10. RPTD. OUT OF LCO

  11. REFERRED TO Office of Legislative Research AND Office of Fiscal Analysis 03/21/22

  12. FILED WITH LCO

  13. Joint Favorable

  14. PUBLIC HEARING 0301

  15. REF. TO JOINT COMM. ON Insurance and Real Estate

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4 sponsors · 0 co-sponsors · 183 not signed on

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Frequently asked questions

Who sponsors HB 5042?
HB 5042 is sponsored by Susan M. Johnson (Democratic), Martin M. Looney (Democratic), Hilda E. Santiago (Democratic), and Kenneth Gucker (Democratic).
What is the current status of HB 5042?
This bill died with 2022 Regular Session. It reached “Passed House” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
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