OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 ↓ (860) 240-0200

http://www.cga.ct.gov/ofa

SB-35

AN ACT CONCERNING NOTICE OF ACQUISITIONS, JOINT VENTURES AND AFFILIATIONS OF GROUP MEDICAL PRACTICES.

AMENDMENT

LCO No.: 3850

File Copy No.: 419

Senate Calendar No.: 286

OFA Fiscal Note

State Impact:

Municipal Impact: None

Explanation

The amendment expands Certificate Of Need (CON) requirements to include transfers of ownership of a group practice to a hospital, hospital system, medical foundation, captive professional entity or other entity that is owned by or affiliated with a hospital. This results in a net state cost of 68,644 in FY 15 and $93,293 in FY 16, which reflects an anticipated cost to the Department of Public Health (DPH) of $53,452 in FY 15 and $71,220 in FY 16, an anticipated cost to the State Comptroller Fringe Benefits of $19,192 in FY 15 and $26,073 in FY 16 and an anticipated revenue gain to the General Fund of $4,000 in both fiscal years. The amendment also requires that all CON deliberations by DPH's Office of Health Care Access (OHCA) take into consideration and include in its written findings: (1) the effect of the change on the diversity of health care providers and patient choice in the geographic region and (2) the effect of any consolidation on market share and any potential adverse effect on health care costs. This may result in a cost to OHCA to the extent that the Office needs additional resources to meet these new requirements.

In 2013, 31 new CON applications were filed with OHCA and 37 decisions were rendered.² OHCA estimates that there were approximately 23 transfers of ownership of a group practice over the past three years or approximately eight annually. Currently, six OHCA analysts work on CON decisions (analyzing slightly more than five to six CON applications annually), but they are not solely dedicated to the CON program. They are also assigned to process hospital financial filings and support the Connecticut Statewide Health Care Facilities and Services Plan. As such, the cost to DPH reflects only one full-time Health Care Analyst to analyze and decide approximately eight more CONs annually, anticipated under the bill. The cost for this position reflects a 10/1/14 hire date ($52,352 in FY 15 and $71,120 in FY 16), equipment ($1,000 for a computer in FY 15 only) and supplies ($100 annually). The associated State Comptroller - Fringe Benefits cost for this position is $19,192 in FY 15 and $26,073 in FY 16. Revenue of $4,000 annually reflects eight CON applications filed with a fee of $500 each.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.