Sec. 19a-646. (Formerly Sec. 19a-166). Negotiation of discounts and different rates and methods of payments with hospitals. Filing with the office. - Connecticut Statutes

      Sec. 19a-646. (Formerly Sec. 19a-166). Negotiation of discounts and different rates and methods of payments with hospitals. Filing with the office. (a) As used in this section:

      (1) "Office" means the Office of Health Care Access;

      (2) "Fiscal year" means the hospital fiscal year, as used for purposes of this chapter, consisting of a twelve-month period commencing on October first and ending the following September thirtieth;

      (3) "Hospital" means any short-term acute care general or children's hospital licensed by the Department of Public Health, including the John Dempsey Hospital of The University of Connecticut Health Center;

      (4) "Payer" means any person, legal entity, governmental body or eligible organization that meets the definition of an eligible organization under 42 USC Section 1395mm (b) of the Social Security Act, or any combination thereof, except for Medicare and Medicaid which is or may become legally responsible, in whole or in part for the payment of services rendered to or on behalf of a patient by a hospital. Payer also includes any legal entity whose membership includes one or more payers and any third-party payer; and

      (5) "Prompt payment" means payment made for services to a hospital by mail or other means on or before the tenth business day after receipt of the bill by the payer.

      (b) No hospital shall provide a discount or different rate or method of reimbursement from the filed rates or charges to any payer except as provided in this section.

      (c) (1) From April 1, 1994, to June 30, 2002, any payer may directly negotiate for a different rate and method of reimbursement with a hospital provided the charges and payments for the payer are reported in accordance with this subsection. No discount agreement or agreement for a different rate or method of reimbursement shall be effective until filed with the office.

      (2) On and after July 1, 2002, any payer may directly negotiate with a hospital for a different rate or method of reimbursement, or both, provided the charges and payments for the payer are on file at the hospital business office in accordance with this subsection. No discount agreement or agreement for a different rate or method of reimbursement, or both, shall be effective until a complete written agreement between the hospital and the payer is on file at the hospital. Each such agreement shall be available to the office for inspection or submission to the office upon request, for at least three years after the close of the applicable fiscal year.

      (3) On and after April 1, 1994, the charges and payments for each payer receiving a discount shall be accumulated by the hospital for each payer and reported as required by the office. The office may require a review by the hospital's independent auditor, at the hospital's expense, to determine compliance with this subsection.

      (4) From October 2, 1991, to June 30, 2002, a full written copy of each agreement executed pursuant to this subsection shall be filed with the Office of Health Care Access by each hospital executing such an agreement, no later than ten business days after such agreement is executed. On and after July 1, 2002, a full written copy of each agreement executed pursuant to this subsection shall be on file in the hospital business office within twenty-four hours of execution. Each agreement filed shall specify on its face that it was executed and filed pursuant to this subsection. Agreements filed at the Office of Health Care Access, in accordance with this subsection, shall be considered trade secrets pursuant to subdivision (5) of subsection (b) of section 1-210 except that the office may utilize and distribute data derived from such agreements, including the names of the parties to the agreement, the duration and dates of the agreement and the estimated value of any discount or alternate rate of payment.

      (d) A payer may negotiate with a hospital to obtain a discount on rates or charges for prompt payment.

      (e) A payer may also negotiate for and may receive a discount for the provision of the following administrative services: (1) A system which permits the hospital to bill the payer through either a computer-processed or machine-readable or similar billing procedure; (2) a system which enables the hospital to verify coverage of a patient by the payer at the time the service is provided; and (3) a guarantee of payment within the scope of the agreement between the patient and the third-party payer for service to the patient prior to the provision of that service.

      (f) No hospital may require a payer to negotiate for another element or any combination of the above elements of a discount, as established in subsections (d) and (e) of this section, in order to negotiate for or obtain a discount for any single element. No hospital may require a payer to negotiate a discount for all patients covered by such payer in order to negotiate a discount for any patient or group of patients covered by such payer.

      (g) Any hospital which agrees to provide a discount to a payer under subsection (d) or (e) of this section shall file a copy of the agreement in the hospital's business office and shall provide the same discount to any other payer who agrees to make prompt payment or provide administrative services similar to that contained in the agreement. Each agreement filed shall specify on its face that it was executed and filed pursuant to this subsection. The office shall disallow any agreement which gives a discount pursuant to the terms of subsections (d) and (e) of this section which is in excess of the maximum amount set forth in said subsections. No such agreement shall be contingent on volume or drafted in such a manner as to limit the discount to one or more payers by establishing criteria unique to such payers. Any payer aggrieved under this subsection may petition the office for an order directing the hospital to provide a similar discount. The office shall adopt regulations in accordance with the provisions of chapter 54 to carry out the provisions of this subsection.

      (h) (1) Nothing in this section shall be construed to require payment by any payer or purchaser, under any program or contract for payment or reimbursement of expenses for health care services, for: (A) Services not covered under such program or contract; or (B) that portion of any charge for services furnished by a hospital that exceeds the amount covered by such program or contract.

      (2) Nothing in this section shall be construed to supersede or modify any provision of such program or contract that requires payment of a copayment, deductible or enrollment fee or that imposes any similar requirement.

      (i) A hospital which has established a program approved by the office with one or more banks for the purpose of reducing the hospital's bad debt load, may reduce its published charges for that portion of a patient's bill for services which a payer who is a private individual is or may become legally responsible for, after all other insurers or third-party payers have been assessed their full charges provided (1) prior to the rendering of such services, the hospital and the individual payer or parent or guardian or custodian have agreed in writing that after receipt of any insurer or third-party payment paid in accordance with the full hospital charges the remaining payment due from the private individual for such reduced charges shall be made in whole or in part from the balance on deposit in a bank account which has been established by or on behalf of such individual patient, and (2) such payment is made from such account. Nothing in this section shall relieve a patient or legally liable person from being responsible for the full amount of any underpayment of the hospital's authorized charges excluding any discount under this section, by a patient's insurer or any other third-party payer for that insurer's or third-party payer's portion of the bill. Any reduction in charges granted to an individual or parent or guardian or custodian under this subsection shall be reported to the office as a contractual allowance. For purposes of this section "private individual" shall include a patient's parent, legal guardian or legal custodian but shall not include an insurer or third-party payer.

      (P.A. 84-323, S. 2, 6; P.A. 85-613, S. 51, 154; P.A. 91-258, S. 3, 4; June Sp. Sess. P.A. 91-11, S. 22, 25; P.A. 93-229, S. 5, 21; P.A. 93-381, S. 9, 39; P.A. 94-9, S. 34, 41; May Sp. Sess. P.A. 94-3, S. 21, 28; P.A. 95-257, S. 12, 21, 39, 58; June 18 Sp. Sess. P.A. 97-2, S. 94, 165; P.A. 02-101, S. 4; P.A. 07-149, S. 6.)

      History: P.A. 85-613 made technical change; P.A. 91-258 amended Subsec. (c) to add a requirement that a copy of each agreement reached under Subsec. (c) be filed with the commission on hospitals and health care, amended Subsecs. (c) and (g) to require that agreements specify that they have been executed and filed pursuant to those Subsecs. and made technical changes; June Sp. Sess. P.A. 91-11 amended Subsec. (c) to clarify that required agreements be filed until July 1, 1992, and to exempt the names of the parties to agreements from freedom of information provisions; P.A. 93-229 amended Subsec. (a) to delete definition of "Blue Cross", renumbering Subdivs. as necessary, amended Subsec. (c) to insert Subdiv. indicators, to limit Subdiv. (1) to the time period prior to October 1, 1993, and to add new Subdiv. (2) re negotiation commencing October 1, 1993, to amend Subdiv. (3) re commission not including discount in calculation of authorized gross revenue and addition of discount to actual net revenues for fiscal year and to amend Subdiv. (4) to delete provision exempting names of parties from freedom of information provisions, deleted Subsec. (h) an obsolete provision re Blue Cross discount, added new Subsec. (i) re hospital establishing programs with banks to reduce bad debt load and made technical changes, effective June 4, 1993; P.A. 93-381 replaced department of health services with department of public health and addiction services, effective July 1, 1993; P.A. 94-9 amended Subsec. (a) to add eligible organizations under 42 USC 1395mm(b) to the definition of payer, Subsec. (c) to add new Subdivs. (3) and (4) re discounts permitted and requirements after April 1, 1994, deleting former Subdiv. (3) re prohibition on cost of discount being borne by patients not covered and relettering former Subdiv. (4) as Subdiv. (5) and added provision re agreements considered trade secrets, and made technical changes, effective April 1, 1994; May Sp. Sess. P.A. 94-3 amended Subsec. (c)(5) to specifically authorize use of names of parties, duration and dates and estimated value, effective July 1, 1994; P.A. 95-257 replaced Commission on Hospitals and Health Care with Office of Health Care Access and replaced Commissioner and Department of Public Health and Addiction Services with Commissioner and Department of Public Health, effective July 1, 1995; Sec. 19a-166 transferred to Sec. 19a-646 in 1997; June 18 Sp. Sess. P.A. 97-2 amended Subsec. (a) to make a technical change, effective July 1, 1997; P.A. 02-101 amended Subsec. (a)(3) to redefine "hospital" to include a "children's" hospital, amended Subsec. (a)(4) to change the cite to federal law from "42 USC Section 1395mm(b)" to "Section 1876 of the Social Security Act", amended Subsec. (b) to add the prohibition against a different rate or method of reimbursement, amended Subsec. (c) to delete obsolete Subdivs. (1) and (2) to renumber existing Subdiv. (3) as Subdiv. (1) and limit it to the period from April 1, 1994, to June 30, 2002, to add a new Subdiv. (2) re payer negotiation, on and after July 1, 2002, for a different rate or method of reimbursement, renumbered Subdivs. (4) and (5) as Subdivs. (3) and (4), in new Subdiv. (4) applied requirement for a written copy to be filed with the Office of Health Care Access to agreements executed during the period from October 2, 1991, to June 30, 2002, and added requirement for agreements executed on and after July 1, 2002, to be filed in hospital business office within 48 hours of execution, and amended Subsecs. (f) and (g) to make technical changes, effective July 1, 2002; P.A. 07-149 amended Subsec. (a) by redefining "fiscal year", "hospital" and "payer", effective July 1, 2007.

      Annotation to former section 19a-166:

      Cited. 214 C. 321.