File No. 264

House of Representatives, March 26, 2009

The Committee on Insurance and Real Estate reported through REP. FONTANA, S. of the 87th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT CONCERNING REVIEWS OF HEALTH INSURANCE BENEFITS MANDATED IN THIS STATE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2009) (a) As used in this section:

(1) "Commissioner" means the Insurance Commissioner.

(2) "Mandated health benefit" means an existing statutory obligation of, or proposed legislation that would require, an insurer, health care center, hospital service corporation, medical service corporation, fraternal benefit society or other entity that offers individual or group health insurance or medical or health care benefits plan in this state to: (A) Permit an insured or enrollee to obtain health care treatment or services from a particular type of health care provider; (B) offer or provide coverage for the screening, diagnosis or treatment of a particular disease or condition; or (C) offer or provide coverage for a particular type of health care treatment or service, or for medical equipment, medical supplies or drugs used in connection with a health care treatment or service. "Mandated health benefit" includes any proposed legislation to expand or repeal an existing statutory obligation relating to health insurance coverage or medical benefits.

(b) (1) There is established within the Insurance Department a health benefit review program for the review and evaluation of any mandated health benefit that is requested by the joint standing committee of the General Assembly having cognizance of matters relating to insurance. Such program shall be funded by the Insurance Fund established under section 38a-52a of the general statutes. The commissioner shall be authorized to make assessments in a manner consistent with the provisions of chapter 698 of the general statutes for the costs of carrying out the requirements of this section. Such assessments shall be in addition to any other taxes, fees and moneys otherwise payable to the state. The commissioner shall deposit all payments made under this section with the State Treasurer. The moneys deposited shall be credited to the Insurance Fund and shall be accounted for as expenses recovered from insurance companies. Such moneys shall be expended by the commissioner to carry out the provisions of this section and section 2 of this act.

(2) The commissioner shall contract with The University of Connecticut Center for Public Health and Health Policy to conduct any mandated health benefit review requested pursuant to subsection (c) of this section. The director of said center may engage the services of an actuary, quality improvement clearinghouse, health policy research organization or any other independent expert, and may engage or consult with any dean, faculty or other personnel said director deems appropriate within The University of Connecticut schools and colleges, including, but not limited to, The University of Connecticut (A) School of Business, (B) School of Dental Medicine, (C) School of Law, (D) School of Medicine, and (E) School of Pharmacy.

(c) Not later than August first of each year, the joint standing committee of the General Assembly having cognizance of matters relating to insurance shall submit to the commissioner a list of any mandated health benefits for which said committee is requesting a review. Not later than January first of the succeeding year, the commissioner shall submit a report, in accordance with section 11-4a of the general statutes, of the findings of such review and the information set forth in subsection (d) of this section.

(d) The review report shall include at least the following, to the extent information is available:

(1) The social impact of mandating the benefit, including:

(A) The extent to which the treatment, service or equipment, supplies or drugs, as applicable, is utilized by a significant portion of the population;

(B) The extent to which the treatment, service or equipment, supplies or drugs, as applicable, is currently available to the population, including, but not limited to, coverage under Medicare, or through public programs administered by charities, public schools, the Department of Public Health, municipal health departments or health districts or the Department of Social Services;

(C) The extent to which insurance coverage is already available for the treatment, service or equipment, supplies or drugs, as applicable;

(D) If the coverage is not generally available, the extent to which such lack of coverage results in persons being unable to obtain necessary health care treatment;

(E) If the coverage is not generally available, the extent to which such lack of coverage results in unreasonable financial hardships on those persons needing treatment;

(F) The level of public demand and the level of demand from providers for the treatment, service or equipment, supplies or drugs, as applicable;

(G) The level of public demand and the level of demand from providers for insurance coverage for the treatment, service or equipment, supplies or drugs, as applicable;

(H) The likelihood of achieving the objectives of meeting a consumer need as evidenced by the experience of other states;

(I) The relevant findings of state agencies or other appropriate public organizations relating to the social impact of the mandated health benefit;

(J) The alternatives to meeting the identified need, including, but not limited to, other treatments, methods or procedures;

(K) Whether the benefit is a medical or a broader social need and whether it is consistent with the role of health insurance and the concept of managed care;

(L) The potential social implications of the coverage with respect to the direct or specific creation of a comparable mandated benefit for similar diseases, illnesses or conditions;

(M) The impact of the benefit on the availability of other benefits currently offered;

(N) The impact of the benefit as it relates to employers shifting to self-insured plans and the extent to which the benefit is currently being offered by employers with self-insured plans;

(O) The impact of making the benefit applicable to the state employee health insurance or health benefits plan; and

(P) The extent to which credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community determines the treatment, service or equipment, supplies or drugs, as applicable, to be safe and effective; and

(2) The financial impact of mandating the benefit, including:

(A) The extent to which the mandated health benefit may increase or decrease the cost of the treatment, service or equipment, supplies or drugs, as applicable, over the next five years;

(B) The extent to which the mandated health benefit may increase the appropriate or inappropriate use of the treatment, service or equipment, supplies or drugs, as applicable, over the next five years;

(C) The extent to which the mandated health benefit may serve as an alternative for more expensive or less expensive treatment, service or equipment, supplies or drugs, as applicable;

(D) The methods that will be implemented to manage the utilization and costs of the mandated health benefit;

(E) The extent to which insurance coverage for the treatment, service or equipment, supplies or drugs, as applicable, may be reasonably expected to increase or decrease the insurance premiums and administrative expenses for policyholders;

(F) The extent to which the treatment, service or equipment, supplies or drugs, as applicable, is more or less expensive than an existing treatment, service or equipment, supplies or drugs, as applicable, that is determined to be equally safe and effective by credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community;

(G) The impact of insurance coverage for the treatment, service or equipment, supplies or drugs, as applicable, on the total cost of health care, including potential benefits or savings to insurers and employers resulting from prevention or early detection of disease or illness related to such coverage;

(H) The impact of the mandated health care benefit on the cost of health care for small employers, as defined in section 38a-564 of the general statutes, and for employers other than small employers; and

(I) The impact of the mandated health benefit on cost-shifting between private and public payors of health care coverage and on the overall cost of the health care delivery system in the state.

Sec. 2. (Effective July 1, 2009) The commissioner shall carry out a review as set forth in section 1 of this act of statutorily mandated health benefits existing on or effective on July 1, 2009. The commissioner shall submit, in accordance with section 11-4a of the general statutes, the findings to the joint standing committee of the General Assembly having cognizance of matters relating to insurance not later than January 1, 2010.

The following fiscal impact statement and bill analysis are prepared for the benefit of members of the General Assembly, solely for the purpose of information, summarization, and explanation, and do not represent the intent of the General Assembly or either House thereof for any purpose:

OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

This bill requires the Insurance Department (DOI) to establish a health benefit review program, creating an increased workload for the agency that can be accommodated within existing resources, and does not result in a fiscal impact.

The Out Years

None

OLR Bill Analysis

HB 5018

AN ACT CONCERNING REVIEWS OF HEALTH INSURANCE BENEFITS MANDATED IN THIS STATE.

SUMMARY:

This bill establishes a health benefit review program within the Insurance Department to evaluate the social and financial impacts of mandated health benefits.

The bill requires the insurance commissioner to review mandated health benefits existing or effective on July 1, 2009. He must report findings to the Insurance and Real Estate Committee by January 1, 2010. It requires the committee, annually by August 1, to give the commissioner a list of any mandated health benefits it wants reviewed. The commissioner must review those benefit and report findings to the committee by the next January 1. The reports must include specified information (see below).

The bill requires the commissioner to contract with the UConn Center for Public Health and Health Policy to conduct the reviews. It authorizes the center's director, as he or she deems appropriate, to (1) retain an actuary, quality improvement clearinghouse, health policy research organization, or other independent expert and (2) engage or consult with any UConn dean, faculty, or other personnel.

The bill requires the Insurance Fund to pay for the review program. It authorizes the commissioner to assess insurers for the program's costs. It specifies that the assessment is in addition to any other taxes, fees, and money the insurers pay to the state. The bill requires the commissioner to deposit payments with the state treasurer, who must credit them to the Insurance Fund as expenses recovered from insurers.

EFFECTIVE DATE: July 1, 2009

MANDATED HEALTH BENEFIT

The bill defines “mandated health benefit” as a statutory obligation of, or proposed legislation that would require, an insurer, HMO, hospital or medical service corporation, fraternal benefit society, or other entity offering health insurance or benefits in Connecticut to:

1. allow an insured or plan enrollee to obtain health care treatment or services from a particular type of health care provider;

2. offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition; or

3. offer or provide coverage for (a) a particular type of health care treatment or service or (b) medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.

The term includes proposed legislation to expand or repeal an existing health insurance or medical benefit statutory requirement.

REVIEW REQUIREMENTS

The bill requires a mandated health benefit review report to address the benefit's social and financial impacts.

Social Impact

The report must include the social impact of mandating the benefit, including, to the extent available, at least the following:

1. the extent to which a significant portion of the population uses the treatment, service, equipment, supplies, or drugs;

2. the extent to which the treatment, service, or equipment is, or supplies and drugs are, available under Medicare or through public programs that charities, public schools, the Department of Public Health, municipal health departments or districts, or the Department of Social Services administer;

3. the extent to which insurance policies already cover the treatment, service, equipment, supplies, or drugs;

4. if coverage is not generally available, the extent to which this results in (a) people being unable to obtain necessary treatment and (b) unreasonable financial hardships on those needing treatment;

5. the level of demand from the public and health care providers for (a) the treatment, service, equipment, supplies, or drugs and (b) insurance coverage for these;

6. the likelihood of meeting a consumer need based on other states' experiences;

7. relevant findings of state agencies or other appropriate public organizations relating to the benefit's social impact;

8. alternatives to meeting the identified need, including other treatments, methods, or procedures;

9. whether the benefit is (a) a medical or broader social need and (b) consistent with the role of health insurance and managed care concepts;

10. potential social implications regarding the direct or specific creation of a comparable mandated benefit for similar diseases, illnesses, or conditions;

11. the benefit's impact (a) on the availability of other benefits already offered and (b) on employers shifting to self-insured plans;

12. the extent to which employers with self-insured plans offer the benefit;

13. the impact of making the benefit apply to the state employees' health plan; and

14. the extent to which credible scientific evidence published in peer-reviewed medical literature that the relevant medical community generally recognizes determines the treatment, service, equipment, supplies or drugs safe and effective.

Financial Impact

The report must include the financial impact of mandating the benefit, including, to the extent available, at least the following:

1. the extent to which the benefit may increase or decrease, over the next five years, (a) the cost of the treatment, service, equipment, supplies, or drugs and (b) the appropriate or inappropriate use of it;

2. the extent to which the treatment, service, or equipment is, or supplies or drugs are, more or less expensive than another that credible scientific evidence published in peer-reviewed medical literature that the relevant medical community generally recognizes is determined to be equally safe and effective;

3. the extent to which the treatment, service, equipment, supplies, or drugs could be an alternative for a more or less expensive one;

4. the reasonably expected increase or decrease of a policyholder's insurance premiums and administrative expenses;

5. methods that will be implemented to manage the benefit's utilization and costs;

6. the impact on the (a) the total cost of health care, including potential savings to insurers and employers resulting from prevention or early detection of disease or illness and (b) cost of health care for small employers and other employers; and

7. the impact on (a) cost-shifting between private and public payors of health care coverage and (b) the overall cost of the state's health care delivery system.

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable