Gov. Ned Lamont signed into law Tuesday a series of changes aimed at bringing down healthcare costs, including a new prescription drug discount card and an expansion of a ban on certain facility fees.
The new law also looks to halt practices that made it harder for insurers and patients to access high-quality care at lower costs.
“I know what it’s like to sit with a patient and help her try to figure out what lab tests or medications she can forgo and which she can afford, even though they’ve all been recommended for her,” Office of Health Strategy Executive Director Deidre Gifford said during a bill signing ceremony at the Capitol.
The new law was the byproduct of negotiations between Lamont, the hospital industry, patient advocates and the legislature.
Despite the law’s broad scope, even proponents acknowledged it’s just a step toward getting healthcare costs under control.
Lamont, for example, had to give up on cost caps when people have to seek care out of network.
Still, he touted the new law as making changes that will produce real savings for patients. One of the first changes Connecticut residents will see is a new prescription drug discount card.
“We’re trying to do something to give you a little more optionality, make sure it’s a little more transparent, make sure you get the very best value for your dollar,” Lamont said.
Connecticut is joining a consortium, along with three other states, to offer all residents a discount card that will be accepted at most pharmacies.
Comptroller Sean Scanlon said the card, which he expects to be available this fall, will offer a discount of up to 20% for branded drugs and up to 80% for generic versions.
The state is also expanding the limitations on facility fees that hospitals and health networks charge for outpatient services that are provided off a hospital campus. Starting July 1, 2024, the ban will include certain services, including stays for observation, not provided in emergency rooms.
The law will also allow the Office of Health Strategy to impose fines of up to $1,000 for violations.
Neither Gifford or Scanlon has estimates for how much they expect the typical patient to save under the new law.
Other changes include an effort to crack down on certain anti-competitive practices, such as tiering and steering.
Insurers can place healthcare providers into preferred tiers when they provide better care at lower prices. Larger health networks, however, have sometimes used their size to force insurers to put all of their providers into the highest tiers, regardless of cost or performance.
This law bans networks from including these clauses in their contracts. The law also bans so-called “all or nothing clauses” that force insurers to include all of a health networks providers in a plan or none of them.
Other practices prohibited under the law include insurers using incentives to steer patients to higher value providers and gag clauses that previously prevented providers from disclosing pricing, terms and other relevant information to patients.
While Lamont didn’t get everything he wanted in the bill, he said he wanted to work with the hospital industry in crafting the final version he signed Tuesday.
Hospital officials agreed Lamont has been more cooperative than other recent governors.
“These were full contact conversations,” Griffin Health President and CEO Patrick Charmel said. “They were cordial but each party got to say its piece and there was a real commitment to understand each party’s perspective.”
Many at Tuesday’s ceremony said this bill is just a step toward bringing healthcare costs under control.
Lawmakers from both sides, including leadership on the Public Health and the Insurance and Real Estate committees, said the issue will remain a priority when they come back to the General Assembly in February.
Meanwhile, Giffords noted her office scheduled a hearing Wednesday to try and assess why healthcare costs continue to go up.
Lamont in 2020 set a benchmark goal for the increase in healthcare costs of 3.4%, a figure the legislature codified into law last year.
OHS reported in March, however, that healthcare costs rose 6% between 2020 and 2021.
Wednesday’s all-day hearing will include panels of employers, healthcare providers, prescription drug manufacturers and insurers.
Gifford said OHS’ research determined prescription drug prices and hospital costs were the two biggest drivers.
The new law wasn’t the only thing lawmakers approved to deal with healthcare costs. The budget includes $6.5 million this upcoming fiscal year to help families get out of medical debt.
That’s less than the $20 million Lamont is seeking, but he estimated it’s still enough to help erase a combined $600 million in debt.
Hospitals often sell unpaid bills for pennies on the dollar, and some organizations buy that debt for the purpose of forgiving it. Lamont said his office is already working with a group and he hopes they can start identifying families before the end of the year.
He called medical debt a “black cloud hanging over working families who got slammed with this through no fault of their own.”