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Connecticut Steps Up Provider Requirements
for Out-of-Network Charges and
More Transparency for Consumers
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POLICY UPDATE: New laws have been passed that hold providers and health plans accountable for informing consumers. In this article, Cristine A. Vogel, MPH, details how the new laws impact physician practices, hospitals, and health systems as more price transparency and health information-sharing systems are established.
The Affordable Care Act ("ACA") has changed the healthcare marketplace - from how insurance companies package and sell insurance to how physicians and hospitals provide and charge for healthcare services, and to how consumers purchase insurance and pay for healthcare services. Consumers are responsible for paying more out-of-pocket costs in the newer plan designs, which is driving the need for consumers to have access to comparable price and quality information. Connecticut lawmakers passed several new laws contained in Public Act 15-146 to make providers and health plans accountable for informing the consumers about out-of-network charges, and established the regulatory framework to proceed with a statewide Health Information Exchange.
Statewide Health Information Exchange
Connecticut has established a statewide Health Information Exchange ("HIE") with the passage of this law. HIE is used to provide the capability to electronically move medical information among disparate information systems. The HIE will enable the exchange of health information across Connecticut's entire healthcare system. This effort will be led by the Commissioner of the Department of Social Services ("DSS"). The stated goals of the HIE include: empower consumers to make effective healthcare decisions; promote patient-centered care; improve the quality, safety and value of health care; reduce waste and duplication of services; support clinical decision-making; keep confidential health information secure; and make progress toward the state's public health goals.
Because the success of the HIE is based on the meaningful sharing of health information among providers, the lawmakers are requiring statewide participation. Therefore, within one year after the HIE becomes operational, each hospital and clinical laboratory must maintain an electronic health record system capable of connecting to and participating in the Connecticut HIE. Other providers with electronic health record systems will have two years from the date the HIE becomes operational to connect to and participate in the HIE. Hospitals are not required to purchase new or additional technology, but failure to take all reasonable steps to comply shall be construed as health information blocking.
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SETTING UP THE STATEWIDE HEALTH INFORMATION EXCHANGE (HIE)
The effort to set up Connecticut's HIE will involve the following steps before
it becomes operational:
- Establish and hold the first meeting of the State Health Information Technology Advisory Council by September 1, 2015
- Submit a plan for establishing the HIE to the Secretary of the Office of Policy and Management by January 1, 2016
- Develop and issue Request for Proposals (RFPs) for the development, management and operations of the statewide HIE
- Report annually to the joint standing committees of the General Assembly regarding implementation progress and policy and regulatory recommendations
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Health Information Blocking
The term "health information blocking" has been defined in the law as knowingly interfering with or knowingly engaging in business practices that likely interfere with the ability of patients, providers or other authorized persons to access, exchange or use electronic health records. Also, it refers to using an electronic health record system to steer patient referrals to affiliated providers and to prevent or interfere with referrals to providers who are not affiliated. The definition clearly indicates that this term does not include legitimate referrals between providers participating in an accountable care organization or a similar value-based collaborative care model.
The new law mandates that electronic health records must follow the patient, be accessible to the patient, and be shared or exchanged with other providers of the patient's choice in a timely manner. It also says that health information blocking shall be an unfair trade practice and enforced by the Connecticut Attorney General. This provision became effective October 1, 2015 and employs the phrase "to the fullest extent practicable".
Study on Price Variation and Remedies
The Insurance Commissioner has been charged with organizing a working group to study the rising cost of healthcare. This study will address increases in the prices charged, the variation in prices charged by providers for comparable services, the impact of price variation, and any correlation between prices charged and the quality, patient population, and payer mix. For hospitals specifically, the working group needs to study the correlation between prices charged and the type of hospital (DSH, specialty, academic, etc.), consolidation structure (horizontal or vertical), facility fees, and comparable services.
A report of the study's findings and recommendations for legislation needs to be submitted to the General Assembly by January 1, 2016. The newly passed law included key topics that should be addressed, such as:
- Reducing price variations among providers
- Promoting the use of high quality providers with low total medical expenses and healthcare provider prices
- Mitigating the impact of facility fees on consumers out-of-pocket expenses and total medical spending
- Expanding or modifying the limitations on facility fees
- Establishing a maximum provider price variation limit
- Establishing a state-wide median rate for certain healthcare services and procedures
- Implementing site-neutral payment policies
The outcome of this study may have significant impact on providers and therefore they should follow the progress of this study and any legislation that will be created in response to the study.
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COST TRANSPARENCY:
The principle of healthcare cost transparency is to enable the patient to discover
how much a particular healthcare service or procedure costs, preferably before receiving the medical care, in order for a patient to make an informed decision based on quality
and cost.
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Informing Patients about Out-of-Network Charges Prior to Services
Connecticut established a state-based insurance exchange ("Access Health CT") in accordance with the ACA several years ago. The new law is requiring that Access Health CT establish and maintain a consumer health information website to assist consumers and employers in making informed decisions about healthcare services and providers. The key features of the site will include information comparing the quality, price and cost of services and links to The Joint Commission and Medicare Hospital Compare websites.
To provide state government and the public with more information about the most frequent diagnoses and procedures, the Connecticut Insurance Commissioner and the Public Health Commissioner will jointly report to Access Health CT the following statewide data:
- 50 most frequently occurring inpatient primary diagnoses and procedures
- 50 most frequently provided outpatient procedures
- 25 most frequent surgical procedures
- 25 most frequent imaging procedures
The same information is also required to be posted on both Department's websites as well. The report is to be compiled using available discharge and claims data; however, at the request of Access Health CT, the above list may be expanded to include additional admissions and procedures. The first report is due to Access Health CT by July 1, 2016 and annually thereafter.
The most frequently performed procedures that Access Health CT will be reporting on will also need to be well-known to hospitals because beginning January 1, 2017, when a hospital is scheduling a nonemergency service that matches a diagnosis or procedure that is included in the report submitted to Access Health CT, the hospital must notify the patient of the patient's right to make a request for cost and price information. This written notification needs to be sent (electronically or by mail) to the patient within three business days of scheduling the appointment.
Effective October 1, 2015, when a provider refers a patient to another provider who is not a member of the same group, but is affiliated with the referring provider, the referring provider must notify the patient, in writing, about the provider affiliation along with the following:
- how the patient is not required to see the provider to whom he or she was referred and that the patient has the right to seek care from a provider that the patient selects
- the website and toll-free number of the patient's insurance carrier to obtain information regarding in-network providers and estimated out-of-pocket costs for the referred service
Beginning January 1, 2016, each healthcare provider, prior to scheduling any admission, procedure, or service, for nonemergency care, needs to determine if the patient has insurance coverage. If it is determined that the patient does not have insurance or would be covered for the particular service as out-of-network, the provider must notify the patient in writing (electronically or by mail) of the following information:
- The charges for the services
- How the patient may be charged and is responsible for payment for unforeseen services that may occur
- An explanation regarding a provider who is out-of-network and that the services may be charged at out-of-network rates
The term "healthcare provider" is not specifically defined in this section of the law, so it seems unclear as to whether this is required for physician practices and/or hospitals and hospital-based facilities.
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NOTIFICATION REQUIRED:
- If the patient is uninsured, the total amount to be charged, including the amount of any facility fee, or an estimated maximum allowed amount if the hospital cannot predict the specific treatment or diagnosis code
- The Medicare reimbursement amount
- If the patient is insured, the allowed amount, the toll-free telephone number and the website of the patient's health insurance carrier so the patient can contact them about any charges and out-of-pocket expenses they may be responsible for
- The Joint Commission's composite accountability rating and the Medicare Hospital Compare star rating for the hospital, as applicable, as well as the Joint Commission's website
- If the patient is insured and the hospital is out-of-network under the patient's policy, the written notice must include the information about the procedure being charged out-of-network rates.
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Out-of-Network Charges and Surprise Bill
When a patient receives a surprise bill from the out-of-network provider when they were located at an in-network provider or facility, the insured individual will only be required to pay the applicable coinsurance, copayment, deductible or out-of-pocket expense that would be imposed if the particular services were provided by an in-network provider. Additionally, the health insurer will reimburse the out-of-network provider or the insured individual for services rendered at the in-network rate under the insured's health plan policy, unless the insurer and provider agree otherwise.
Effective July 1, 2016, it shall be an unfair trade practice violation of chapter 735a for any healthcare provider to request payment from an enrollee, other than coinsurance, copayment, deductible or other out-of-pocket expense for the following:
- Healthcare services or a facility fee covered under a health plan
- Emergency services covered under a health plan and rendered by an out-of-network provider
- Surprise billing for out-of-network provider charges
Furthermore, it will be considered an unfair trade practice violation of chapter 735a for any healthcare provider to report to a credit reporting agency an enrollee's failure to pay a bill for the services, facility fee or surprise bill when the health insurer has primary responsibility for payment of such services, fees, or bills. This section defines a "healthcare provider" as an individual licensed to provide healthcare services.
The new healthcare law begins to set the stage to bring more transparency to the cost of healthcare for state government and consumers. There will be significant compliance for providers as a result of this policy.
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WHAT IS A "SURPRISE BILL?
A surprise bill happens when an insured individual receives healthcare services (other than emergency services) at an in-network facility and receives a bill from an out-of-network provider. The out-of-network provider was likely involved in only a portion of the services, which often occurs during a procedure. The insured individual does not knowingly choose these services from the out-of-network provider because the patient made an assumption that if they are using an in-network facility, all the providers involved in that services are also in-network. So the out-of-network charges are a surprise to the patient after the service was provided. A surprise bill does not include those bills occurring when an in-network provider was available but the patient elected to use an out-of-network provider.
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