Public Health Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-249

Title:

AN ACT CONCERNING DISPUTES BETWEEN HOSPITALS OR HOSPITAL SYSTEMS AND HEALTH INSURERS.

Vote Date:

3/27/2015

Vote Action:

Joint Favorable

PH Date:

3/11/2015

File No.:

635

SPONSORS OF BILL:

Public Health Committee

Sen. Looney, 11th Dist.

REASONS FOR BILL:

The bill establishes a binding arbitration process for disputes between hospitals or hospital systems and health insurers concerning network participation. It applies to contracts entered into or amended after the bill takes effect. It allows either party to request binding arbitration, at least 120 days before the existing contract is set to expire. If neither party does so, the contract is extended for a year.

The bill sets conditions governing the arbitration process. In coming to a decision, the arbitrator must select one party's proposal on each unresolved issue. The arbitrator must consider certain factors, such as the (1) needs of patients, (2) needs and interests of the parties, (3) history of the negotiations, and (4) interests and welfare of hospital employees.

RESPONSE FROM ADMINISTRATION/AGENCY:

None

NATURE AND SOURCES OF SUPPORT:

None

NATURE AND SOURCES OF OPPOSITION:

Connecticut Association of Health Plans: Passage of the bill will likely result in prolonged conflict as opposed to quicker resolution. Contract negotiations often commence when a provider issues a termination notice to a payer as is their right. It's the interest of both parties to come to an agreement as quickly as possible. Establishing an artificial timeline by virtue of beginning arbitration for discussions will only prolong the process.

Connecticut Hospital Association: Given the current environment, while the parties always work to resolve their issues, unfortunately there is going to be instances in which the parties can't continue to work together and therefore need to terminate the agreement. Essentially, the results of this bill would push ahead by 60 or 90 days the termination date for inclusion of specific hospital providers.

Hartford HealthCare: Negotiations between hospitals and health insurance companies are part of normal operations. Ideally, hospitals and health plans work in partnership to arrange contracts that allow for the greatest possible access to high quality care. The ability to negotiate is important to the structure of the healthcare system.

Reported by: Zani Imetovski

Date: 04/17/2015