On May 14, 2018, Connecticut Governor Dannel P. Malloy signed into law Public Act No. 18-91 “An Act Concerning the Office of Health Strategy” (PA 18-91), a bill that operationalizes the Office of Health Strategy (OHS), a new health oversight agency in Connecticut. OHS is a division of the Department of Public Health (DPH) “for administrative purposes only” that was provisionally established by the Connecticut General Assembly within the budget implementer bill passed in a special session in late 2017 and accorded responsibility for developing and implementing a health care vision for Connecticut, among other things. PA 18-91 operationalizes OHS by assigning responsibility for administration of Connecticut’s certificate of need (CON) process to a newly created unit within OHS that succeeds the Office of Health Care Access (OHCA), as well as by clarifying and increasing OHS’s statutory health oversight duties.
PA 18-91 took effect from passage on May 14, 2018, except as noted below.
Health Systems Planning Unit and CON Changes
This legislation renames the Office of Health Care Access the “Health Systems Planning Unit” (HSPU). HSPU will operate as a unit within OHS, overseen by the executive director of OHS. PA 18-91 further provides that OHS will exercise independent decision-making authority over all CON decisions as of May 14, 2018, except with respect to completed CON applications that are currently pending (as described below).
Although this legislation shifts oversight of the CON process from within DPH to OHS and its HSPU, PA 18-91 stipulates that the Deputy Commissioner of Public Health retains independent decision-making authority over any CON applications that are currently pending before OHCA and have been deemed complete by OHCA on or before May 14, 2018. Once the Deputy Commissioner of Public Health has issued a final decision on any such complete but pending CON application, the executive director of OHS shall exercise independent authority on any further action required on any such CON application or CON issued pursuant to such an application.
Consistent with HSPU’s assumption of duties formerly held by OHCA, the legislation imposes a deadline of October 1, 2018 for HSPU to enter into a memorandum of understanding with the State Comptroller to allow the Comptroller to access certain data collected by HSPU from hospitals and outpatient surgical facilities, provided the Comptroller agrees to keep such information confidential. OHCA was previously required to enter into a similar memorandum in connection with OHCA’s data-collection responsibilities now being assumed by the HSPU.
The bill also makes conforming changes to State laws governing reporting of information and data by health care facilities and providers to replace references to OHCA with references to the HSPU and to replace certain references to DPH with references to OHS. For example, this legislation revises the statutory requirements for providing notice of material changes to group practices in Connecticut and for annual reporting on operations by group practices and affiliations by hospitals and health systems in Connecticut, to provide that such notices and such reports shall now be submitted to OHS and not DPH. Likewise, hospitals and health systems will now be required to file facility fee reports by July 1 of each year with OHS and not DPH. Medical foundations are required to file corporate organizational documents (and any amendments thereto) with the HSPU and not OHCA. Although the legislation retains a reference to reporting to the ‘office’ in connection with the annual reporting requirements for medical foundations concerning their operations under Connecticut General Statutes § 33-182bb(g), PA 18-91 appears to intend for that reporting now to be made to the HSPU. Additionally, tax-exempt hospitals will now be obligated to file copies of their Internal Revenue Service Form 990 along with their audited financial statements to the HSPU and not OHCA by February 28 of each year.
PA 18-91 also provides that OHS shall post notice of its intent to adopt regulations concerning the CON process on its website and the State’s eRegulations system within 20 days after the date of implementation. Notice of CON regulations will no longer be posted in the Connecticut Law Journal.
PA 18-91 shifts responsibility for overseeing hospital conversions in Connecticut under Connecticut General Statutes § 19a-486 et seq. from DPH to OHS. Connecticut’s hospital conversion laws govern review and approval of transfers of ownership or a material amount of assets from a nonprofit Connecticut hospital to an entity organized or operated for profit. The conversion laws contemplate a joint review of any such proposed “conversion” transactions, a process previously overseen by the Connecticut Attorney General and DPH. As a result of this legislation, OHS and the Connecticut Attorney General now will be responsible for jointly vetting and approving any proposed hospital conversions.
Prior to the passage of this legislation, OHS was required to take responsibility for certain matters “on or before July 1, 2018,” including for (1) developing and implementing a comprehensive and cohesive health care vision for Connecticut; (2) directing and overseeing the State Innovation Model Initiative and the State’s all-payer claims database; (3) coordinating the State’s health information technology initiatives; (4) directing and overseeing OHCA; and (5) convening meetings to discuss health care issues in Connecticut.
PA 18-91 affirms those provisional duties and newly obligates OHS to promote effective health planning and the provision of quality health care in Connecticut in a manner that (1) ensures access for State residents to cost-effective health care services; (2) avoids duplication of those services; and (3) improves the availability and financial stability of those services statewide. OHCA was previously obligated to promote effective health planning in Connecticut. To avoid duplication, this legislation repeals that statutory requirement.
PA 18-91 also expands OHS’s responsibilities concerning the State’s all-payer claims database program. The all-payer claims database program collects, assesses, and reports health care information relating to safety, quality, cost-effectiveness, access, and efficiency for all levels of health care in the State. Pursuant to this legislation, OHS is required to maintain written procedures for the administration of the database in consultation with the Health Information Technology Advisory Council. Those procedures must contain (at a minimum) reporting requirements for reporting entities and for providing notice to such entities of alleged failures to comply with reporting requirements. PA 18-91 further requires OHS to establish and maintain the State’s consumer health information website.
PA 18-91 makes a number of technical changes to Connecticut statutes to formalize the transition of OHCA’s responsibilities to the HSPU, and to transition other responsibilities for State oversight of the health care market to OHS. For example, and without limitation, under this legislation OHS assumes the responsibilities of (1) the duties of the State’s health information technology officer (including for annually reporting to the Connecticut General Assembly’s Human Services and Public Health committees) and is obligated to designate an employee to serve in that role; (2) the Connecticut Health Insurance Exchange relating to administration of the all-payer claims database; and (3) the Office of the Lieutenant Governor relating to the development of a chronic disease plan, and for oversight of the Health Care Cabinet, a group responsible for advising the Governor on development of an integrated health system in Connecticut and related matters. Establishment of the Health Care Cabinet within OHS does not take effect until July 1, 2018.
This legislation also clarifies that no statutory provision related to OHS’s responsibility for overseeing the State’s all-payer claims database, nor any action taken by OHS, shall be construed to preempt, supersede, or otherwise affect the authority of the Insurance Commissioner to regulate the business of insurance in Connecticut.
Notably, PA 18-91 revises the make-up of the State Health Information Technology Advisory Council, which is responsible for advising OHS and the health information technology officer in establishing priorities and developing policy recommendations for advancing and standardizing the State’s health information technology and health information exchange efforts. PA 18-91 adds a new member to the Council – to be appointed by OHS – who must be an expert in State health care reform initiatives (although the term “expert” is not defined in the legislation). PA 18-91 also removes a previous requirement that one of the three members of the Council nominated by the president pro tempore of the Senate be a “representative” of the Connecticut State Medical Society and now requires that such nominee be a Connecticut-licensed physician.
Finally, although this legislation transfers authority for a number of health care oversight duties in Connecticut from DPH to OHS and the HSPU, PA 18-91 does not transfer responsibility for licensure to OHS. Professional licensure will continue to be overseen by DPH. Moreover, DPH has indicated that while PA 18-91 for the most part took effect immediately upon signature on May 14, 2018, the transition may be gradual as DPH and OHCA formalize the new health care oversight structure in Connecticut. Health care providers and facilities would therefore be well-advised to communicate with DPH and OHS concerning licensure, reporting, and transactional matters, to assure compliance with the new requirements and processes.