Connecticut Budget Bill Includes Important Changes to Network Participation Contracts Between Health Care Providers and Insurers

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On June 23, 2021, Connecticut Governor Ned Lamont signed into law Public Act 21-2 “An Act Concerning Provisions Related To Revenue And Other Items To Implement The State Budget For The Biennium Ending June 30, 2023” (PA 21-2). PA 21-2 makes various changes to Connecticut law as part of implementing the Governor’s budget, including, in pertinent part, a change to statutory requirements that apply to contracts between health carriers (insurers) and participating health care providers. This provision of PA 21-2 takes effect October 1, 2021.

Currently, health carriers are required – at the time a contract is signed with a participating provider – to disclose to the provider all provisions and other documents that are incorporated by reference into the contract (e.g., manuals or policies of the health carrier), and to provide “timely” notice to the provider of any change to such provisions or documents thereafter that constitutes a material change. The contract must also include definitions of timely notice and material change.

Under PA 21-2, for participating provider contracts entered into, amended, or renewed on or after July 1, 2022, the health carrier is expressly required to disclose all provider manuals and policies incorporated by reference in contracts with participating providers. In addition, for all such contracts entered into, amended, or renewed on or after July 1, 2022, the health carrier must give contracted participating providers at least ninety (90) days’ written notice of any change to the provision, documents, policies, or manuals incorporated by reference into the contract, if such change constitutes a material change to the contract or the procedures a provider must follow under it.

Additionally, contracts entered into, amended, or renewed on or after July 1, 2022 must include provisions that: (a) disclose the ninety (90) day advance written notice requirement described above; (b) disclose what is considered timely notice and a material change; and (c) afford participating providers a right to appeal proposed changes to contract provisions or other documents, provider manuals, or policies incorporated into such provider contracts.

Finally, effective October 1, 2022, PA 21-2 also newly defines the term “Psychiatric residential treatment facility” in the Department of Public Health (DPH) facility licensure statutes, and directs DPH to adopt regulations governing licensure by DPH of psychiatric residential treatment facilities. The definition of that term is notable in part because there is an exception to the state’s Certificate of Need requirements for programs licensed or funded by the Department of Children and Families (DCF), but that exception by its terms does not apply to a program that is a “psychiatric residential treatment facility” – a term that had not previously been defined. This addition may help organizations reviewing potential regulatory review requirements related to establishment of a program licensed or funded by DCF.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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