Important New Connecticut Laws Affecting Health Care Effective July 1

The two most recent legislative sessions of the Connecticut General Assembly produced a number of new statutes that significantly impact the operations of hospitals and other health care providers. To help remind the health care industry of the changes ahead, we’ve highlighted below some of the key pieces of legislation that are scheduled to take effect on July 1, 2016.

Non-Competition Agreements with Physicians

This is one of the more newsworthy bills enacted this year, as it limits covenants not to compete in agreements that create a “professional relationship” with a physician (such as an employment agreement) and are entered into, amended, extended or renewed on or after July 1, 2016.

The statute restates the common law rules that such covenants must be necessary to protect a legitimate business interest; must be reasonably limited in time, geographic scope and practice restrictions; and must be consistent with the law and public policy, but also goes a step further and provides that non-competes may not restrict the physician’s competitive activities for more than one year and in a geographic area of more than 15 miles from the physician’s primary office. Further, these covenants are not enforceable if the employment agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions. These covenants are also not enforceable if the employer terminates the agreement other than for cause.

(PA 16-95, Section 1)

Surprise Bills

Enacted last year with an effective date of July 1, 2016, the Connecticut surprise bill statute protects patients from unexpected costs that arise when out-of-network providers deliver services at in-network facilities. Starting July 1, if a patient receives a surprise bill, he or she will only be required to pay the coinsurance, copayment, deductible, or other out-of-pocket expense that would apply if the services had been rendered by an in-network provider.

Similarly, with respect to emergency services rendered by an out-of-network provider, patients can only be charged the in-network rate.  Health insurers, however, must reimburse out-of-network providers who perform emergency services at the greatest of: (1) the amount the health care plan would pay if the services were rendered by an in-network provider; (2) the amount Medicare reimburses for those services; or (3) the usual, customary, and reasonable rate. (We’re keeping an eye on developments in the interpretation of the term “usual, customary, and reasonable” in light of a recent lawsuit filed by the American College of Emergency Physicians against the US Department of Health and Human Services,  which seeks clarification of the term as used in a similar provision of the Affordable Care Act.)

(PA 15-146, Section 9)

Unfair Trade Practices

An “unfair trade practice” in Connecticut permits a private right of action against the violator, and courts have the discretion to award punitive damages, costs, reasonable attorney’s fees, as well as an injunction and other relief.

Currently, it is an unfair trade practice for a health care provider to request payment from a patient (other than a copayment or deductible) for medical services covered under a plan (Connecticut General Statutes §20-7f). Beginning July 1, it will be an unfair trade practice for a health care provider to request payment from a patient (other than a coinsurance, copayment, deductible or other out-of-pocket expense) for:

  • Health care services or a facility fee covered under a health care plan;
  • Emergency services covered by a health care plan and rendered by an out-of-network provider; or
  • A surprise bill.

It will also an unfair trade practice for a health care provider to report to a credit reporting agency a patient’s failure to pay a bill for the above listed items when a health carrier has primary responsibility for paying. (Under current law, it is an unfair trade practice to report to a credit reporting agency only a patient’s failure to pay a bill for medical services that a managed care organization has primary responsibility for paying.)

(PA 15-146, Section 11)

Annual Report on Facility Fees

Beginning July 1, 2016 and annually thereafter, hospitals and health systems must report to the Department of Public Health on the facility fees charged during the preceding calendar year at facilities located off the hospital campus.  The required information includes such data as: the number of patient visits at each such facility for which a facility fee was charged or billed; for each facility, the total amount of revenue received by the hospital/health system derived from facility fees; and the top ten procedures for which facility fees are charged based on patient volume. DPH will publish this information or post it on website of the Office of Health Care Access.

(PA 15-146, Section 13)

Outpatient Surgical Facilities

Currently, the anticipated postoperative recovery period for ambulatory surgical care provided by an outpatient surgical facility in Connecticut generally cannot require skilled medical/nursing care that would extend the patient’s admission beyond the normal period of clinic operations during one day.

Beginning July 1, outpatient surgical facilities in Connecticut that qualify as “ambulatory surgical centers” under federal law may provide surgical services that require no more than 24 hours of postoperative observation without hospitalization. The new law also requires the Department of Public Health to study the implications of this change and determine if regulations are needed to implement them, also by July 1.

(PA 16-3, Sections 195 and 196)

Electronic Prescription Drug Monitoring Program

Effective July 1, pharmacists and other controlled substance dispensers must report information on controlled substance prescriptions to the state’s electronic prescription drug monitoring program immediately after dispensing the prescription, but in no event later than the next business day. (Current law requires such information to be reported at least weekly.) Reporting must be done electronically.  If the program is not operational, the dispenser must report the required information no later than the next business day after regaining access to the program.

The statute also relaxes the requirements regarding how often a prescriber must review the patient’s records in the program when prescribing a prolonged course of a Schedule V non-narcotic controlled substance, from once every 90 days to once a year.

Finally, the new law allows a prescribing practitioner to designate an agent to carry out its obligations under the program on his or her behalf. Special rules apply if the practitioner is employed by, or provides professional services in, a hospital.

(PA 15-5, Section 354 and PA 16-43, Section 9)

Administration of Opioid Drugs

A prescribing practitioner who is authorized to prescribe opioid drugs may not, on or after July 1, issue a prescription for more than a seven-day supply to: (1) a minor; or (2) with respect to the first time for outpatient use, an adult. When prescribing less than a seven-day supply to a minor, the practitioner must discuss the risks associated with the drug with the minor and, if present, the minor’s parent or guardian.

The seven-day restriction does not apply if:

  • In the practitioner’s professional judgment, the opioid drug is required to treat an acute medical condition, chronic pain, cancer-associated pain or for palliative care, so long as the practitioner documents the patient’s condition in the medical record and indicates that alternatives were not appropriate for the patient; or
  • The medications are prescribed for the treatment of abuse or dependence on an opioid drug, including opioid agonists and opioid antagonists.

(PA 16-43, Section 7)

Telehealth for Medicaid Patients

The Department of Social Services must, within available state and federal resources, provide Medicaid coverage for telehealth services that it determines are:

  • Clinically appropriate to provide via telehealth;
  • Cost-effective for the state; and
  • Likely to expand access to medically necessary services for Medicaid recipients who experience undue hardship accessing appropriate health care services.

DSS will seek federal waivers or amend the Medicaid state plan as necessary to attempt to secure federal reimbursement for the costs of providing telehealth services under Medicaid.

(PA 16-198)