Cheat sheet: What's in the big health care bill

The state Senate unanimously passed a wide-ranging health care bill Monday that could have significant implications for hospitals, insurance companies, doctors and patients.

Proponents say it will help control health care costs and improve transparency for patients. Critics say it contains problematic new regulations and could jeopardize the ability of struggling hospitals to find buyers to help them survive.

The 87-page bill passed the House Saturday night and now goes to the governor.

What does it do? Here’s a look at the key parts.

Disclosure of fees and affiliations

A major impetus behind this legislation was the concern among state Senate leaders about the growth of large health systems that control multiple hospitals and physician practices. Senate President Pro Tem Martin M. Looney, D-New Haven, and Senate Minority Leader Len Fasano, R-North Haven, have warned that consolidation can lead to higher prices – hospital-owned medical practices and facilities can often charge higher rates – and pressure on independent physicians to join large systems.

(Hospital officials say forming larger systems and aligning with doctors and other health care providers help them adapt to funding cuts and changes in how care is delivered and paid for.)

Parts of the bill focus on changes that can result from consolidation. One is facility fees – additional, often costly, charges patients can face if they get care at outpatient facilities owned by hospitals.

Starting in 2016, all billing statements that include a facility fee must clearly identify the facility fee and include a statement that the facility fee is intended to cover the hospital’s operational expenses and that the patient might have paid less if the services were provided at a facility not owned by a hospital. Patients would also have to be notified of their right to request a reduction of the fee, and a telephone number to use to request it.
If a hospital buys a physician practice or medical facility and is likely to begin charging facility fees, it would have to notify patients.
Beginning in 2017, facility fees would not be allowed for certain outpatient physician office visits.

Another provision sets new rules for providers who refer patients to providers they have an affiliation with. The referring provider would have to let the patient know in writing about the affiliation, and that the patient is not required to see that provider.

An earlier version of the bill contained other provisions aimed at reducing the advantages of consolidation – particularly the ability of hospital-owned facilities to charge more – but they were removed.

Rules for sales of hospitals

Waterbury Hospital Credit: Erin Covey / Waterbury Republican American

The state approval process for sales of hospitals has been under scrutiny as independent hospitals consider joining larger networks and, in some cases, becoming for-profit. That intensified last year after Tenet Healthcare, a national for-profit company, dropped plans to buy five Connecticut hospitals after the state regulator indicated it would impose conditions on a sale that Tenet considered too burdensome.

Unions and advocacy groups have pushed for greater restrictions on for-profits running hospitals, while hospital leaders say the state needs to ensure that the regulatory process won’t scare off potential purchasers – including for-profits – that could help assure the survival of community hospitals.

The bill would add new factors to the approval process for sales of hospitals, with additional scrutiny for hospitals seeking to be purchased by for-profit companies or large hospitals or health systems – defined as those with net patient revenue of more than $1.5 billion.

The Office of Health Care Access, the regulator that can approve or reject a potential sale, would have to consider whether the sale would reduce competition or raise prices.
Applicants would have to provide a plan showing whether services would change in the first three years after the sale, and disclose any financial gain hospital officials are expected receive related to the transaction.
The Office of Health Care Access would have to weigh the value of any conditions it places on the approval of the sale against the burden they would impose, and would have to state the basis for each condition. The hospital or its purchaser could appeal the conditions.
Proposed sales involving for-profit or large organizations would have to go through a cost and market-impact review, and the state attorney general could take further action if the review finds that the transaction is likely to lead to an organization with a dominant market share or prices that are “materially higher” than the median prices charged in the market. If the sale is approved, the purchaser would have to pay for an independent monitor to track compliance with any conditions set for the certificate of need for three years.

The new rules take effect Dec. 1, giving hospitals in the midst of talks to be purchased – including Waterbury Hospital – time to file applications that would be handled under current rules.

Sharing medical records

Electronic medical records have become common, but the ability to share them easily between providers lags. Credit: Courtesy of Flickr user MC4 Army, used under CC license.

Although most health care providers in the state use an electronic records system, the different systems aren’t always set up to share information with each other.

The bill establishes a statewide health information exchange with the goal of allowing real-time, secure access to patient health information and complete medical records across health care provider settings, and puts the commissioner of social services in charge of developing it. The bill calls for the state to contract with an organization to develop and run a statewide health information exchange using bonding funds – but does not authorize any money for that purpose.

DSS officials have said they prefer to bridge the gaps that exist in the ability to share records, rather than building a new, overarching infrastructure, and the bill allows the DSS commissioner to propose an alternative plan for establishing a health information exchange.

Patient safety advocates say allowing records to be shared between a patient’s health care providers could reduce errors, improve care coordination and help avoid duplicative tests. Looney and Fasano have also warned that the lack of a neutral, statewide system for sharing records can give business advantages to large health systems, giving patients an incentive to see providers within the system so their records can be easily shared. Hospital officials dispute that characterization, and some have questioned the need to spend significant money on new infrastructure for sharing records.

The bill also defines the practice of “health information blocking” – intentional activities to interfere with the ability of patients or health care providers to access, exchange or use electronic health records, or using an electronic records system to steer patient referrals to affiliated providers – and deems them unfair trade practices that the state attorney general could enforce.

Transparency

The Yale New Haven Health System controls the most hospital beds in the state, and some legislators are worried about its growth. Credit: Paul Bass / New Haven Independent

The bill creates new ways for patients to learn what their medical care would cost and whether their health care providers are in their insurer’s network.

The state’s health insurance exchange, Access Health CT, would create a website that patients could use to compare quality and price of health care services. Each insurance company would be required to give the exchange information on the amounts they pay for the most common types of care – information that could be particularly valuable to people with high-deductible plans, who must pay whatever payment rates their insurer negotiated until they reach their deductible.

Hospitals and other health care providers would have to provide patients with cost information in some situations.

When a hospital schedules a patient for nonemergency care, it would have to notify the patient that he or she can request information on cost and quality. Patients who ask would be given the information within three days. Patients with insurance would be told the amount their insurer would pay and how to contact their insurer to find out what their out-of-pocket expenses would be. Patients without insurance would be told the charges they could face.
Health care providers would have to notify uninsured patients who schedule nonemergency care what the charge would be. If the patient has insurance but the provider is not in the carrier’s network, the provider would have to notify the patient of the cost and the likelihood that out-of-network rates would apply. But the patient could face additional charges if unforeseen care is provided.
Contracts between insurance companies and health care providers would not be allowed to prohibit either party from disclosing information on what the provider bills for care or what the insurer pays.

Other provisions create new requirements for insurance companies, including some inspired by concerns that certain insurance companies have designed their benefits to discourage people with costly medical conditions from picking their plans, such as by making all drugs for conditions like HIV subject to high out-of-pocket costs.

Each insurance company would be required to have a website and toll-free number that customers could use to get information on the cost of medical care, including their estimated out-of-pocket costs, as well as data on quality measures and patient satisfaction, which providers are in the network, accepting new patients, and the language providers speak.
Insurance companies would have to notify customers in writing within 30 days when a provider stops participating in the health plan. Insurers would also have to update their provider directories at least once a month.
Insurance companies would have to make available, in an easily readable format, information on coverage exclusions and restrictions, a description of out-of-pocket expenses that apply to prescription drugs, and a way to determine whether a specific drug is covered, how much the customer would have to pay for it, any restrictions on its coverage, and whether providers are in the network.
The insurance commissioner would be required to evaluate whether insurance companies are complying with the federal health law’s prohibition against discriminatory benefit designs and report on it annually to the legislature.

Surprise billing

Senate President Pro Tem Martin M. Looney (left) and Senate Minority Leader Len Fasano said the state needs better levers to address the changing health care landscape. Credit: Arielle Levin Becker / Ctmirror.org

Inspired by a New York Times article about patients who received huge bills after unknowingly receiving care from out-of-network providers, legislators proposed restrictions on so-called “surprise billing,” which the bill defines as billing for nonemergency health care services rendered by an out-of-network provider at an in-network facility, in cases when the patient did not choose to get care from that provider.

Patients who receive emergency care from an out-of-network provider would not have to pay more than they would if the care were delivered by a provider in their insurer’s network. The bill provides guidelines for what the patient’s insurance company would pay the provider, who would otherwise be allowed to bill any amount.
In cases of surprise bills, patients’ financial responsibility would be whatever they would pay for an in-network provider, while the insurer would pay the in-network rate (though it could agree to something else with the provider).

More to come: Stuff to be studied

The bill calls for two groups to study issues related to health care costs and price variation, which could lead to recommendations for future changes.

The state’s existing health care cabinet – which is led by Lt. Gov. Nancy Wyman – would study health care cost containment models other states use and recommend policy changes. Those could include setting benchmarks or limits for cost growth and identifying ways to promote “value-based” care that provides high-quality at low costs.
The insurance commissioner would lead a working group to study the rising cost of care and price variation. Before next year’s legislative session, the group would have to recommend ways the state could reduce price variation among health care providers and promote the use of high-quality, low-cost providers. According to the bill, those could include expanding or modifying limits on facility fees, establishing limits on price variation or a statewide median rate for certain types of care. The group could also recommend whether to implement “site-neutral” reimbursement policies, in which physicians receive the same payment rate whether their practice is owned by a hospital or not – a controversial policy that Looney and Fasano included in the bill but that got taken out after intense lobbying.