AN ACT CONCERNING COOPERATIVE HEALTH CARE ARRANGEMENTS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2010) (a) As used in this section:

(1) "Cooperative arrangement" means an agreement among two or more health care providers for the purpose of sharing, allocating or referring patients, personnel, instructional programs, support services or facilities or medical, diagnostic or laboratory facilities or procedures, or negotiating fees, prices or rates with managed care organizations and includes, but is not limited to, a merger, acquisition or joint venture of two or more health care providers, including, but not limited to, physician practice groups;

(2) "Health care provider" means: (A) A physician licensed under chapter 370 of the general statutes, (B) a chiropractor licensed under chapter 372 of the general statutes, (C) a podiatrist licensed under chapter 375 of the general statutes, (D) a natureopath licensed under chapter 373 of the general statutes, or (E) an optometrist licensed under chapter 380 of the general statutes;

(3) "Certificate of public advantage" means a certificate issued by the Attorney General, authorizing health care providers that are parties to a cooperative arrangement to engage in conduct that could tend to lessen competition in a relevant health care market, upon a showing that such cooperative arrangement meets the criteria set forth in subdivision (2) of subsection (c) of this section; and

(4) "Managed care organization" has the meaning set forth in section 38a-478 of the general statutes.

(b) The Attorney General may issue a certificate of public advantage in accordance with this section. Any two or more health care providers may apply to the Attorney General for a certificate of public advantage to authorize a cooperative arrangement. The application shall include (1) the name of the applicant or applicants, (2) a description of the nature and scope of the cooperative arrangement, (3) a description of any consideration passing to a party under the agreement, (4) evidence in support of the criteria set forth in subdivision (2) of subsection (c) of this section, and (5) such other information as the Attorney General may require. Each application shall be accompanied by a fee of one hundred dollars. Any information of a proprietary nature submitted in such application that meets the standards set forth in subdivision (5), (8) or (10) of subsection (b) of section 1-210 of the general statutes shall be confidential and exempt from public disclosure.

(c) (1) The Attorney General shall review each application submitted pursuant to subsection (b) of this section and, not later than ninety days after receipt of such application, issue a written decision approving or denying the application. The decision shall set forth the Attorney General's findings with respect to the benefits and disadvantages described in subdivision (2) of this subsection and a conclusion as to whether the benefits outweigh the disadvantages to the residents of this state. The Attorney General may conduct a hearing, after giving notice to all interested parties, to obtain information necessary in making such decision.

(2) In reviewing applications under this section, the Attorney General shall consider the criteria established in subsection (a) of section 19a-637 of the general statutes that the Attorney General deems relevant to the application for a certificate of public advantage and any benefits of such cooperative arrangement, including, but not limited to: (A) Enhancement of the quality of health services to consumers; (B) gains in cost efficiency of providing health services; (C) improvement in utilization of and access to health services and equipment; and (D) avoidance of duplication of health care resources. The Attorney General shall not approve an application for a certificate of public advantage unless the Attorney General finds that the benefits of the proposed cooperative arrangement outweigh the disadvantages, including, but not limited to: (i) The potential reduction in competition; (ii) the adverse impact on quality, access or price of health care services to consumers; and (iii) the availability of arrangements that achieve the same benefits with less restriction on competition.

(3) Conduct by health care providers in furtherance of a cooperative arrangement that has received a certificate of public advantage shall not be subject to the provisions of chapter 624 of the general statutes, except that the Attorney General may utilize the powers set forth in section 35-42 of the general statutes when the Attorney General has reason to believe that the approved cooperative arrangement is not performing or providing services as described in the application or in the annual progress report. This section shall not be construed to require a health care provider to obtain a certificate of public advantage in order to enter into a cooperative arrangement, and, absent a certificate of public advantage, the legality of such cooperative arrangement shall be determined by applicable antitrust law.

(4) Health care providers in a cooperative arrangement that has received a certificate of public advantage pursuant to this section shall submit an annual progress report to the Attorney General on a form prescribed by the Attorney General. The report shall be accompanied by a fee of one hundred dollars.

(5) The Attorney General shall actively supervise any cooperative arrangement authorized pursuant to this section to determine whether the conduct undertaken by the health care providers in furtherance of the cooperative arrangement should continue to be authorized. The Attorney General shall review such conduct through annual progress reports submitted by the health care providers in a cooperative arrangement in accordance with subdivision (4) of this subsection to evaluate whether the conduct is consistent with the application and whether the benefits continue to outweigh the disadvantages. If the Attorney General has reason to believe that the likely benefits no longer outweigh the disadvantages, the Attorney General shall notify the holder of the certificate of public advantage and hold a hearing to determine whether such certificate should be modified or revoked. Such modification or revocation shall take effect ninety days from the mailing of notice of a final decision by the Attorney General. The Attorney General shall not modify or revoke a certificate of public advantage more than three years after the initial issuance of such certificate.

(d) Any health care provider denied a certificate of public advantage by the Attorney General pursuant to this section and any holder of a certificate of public advantage that has been modified or revoked by the Attorney General pursuant to subdivision (5) of subsection (c) of this section may appeal therefrom as if such denial, modification or revocation were a contested case within the meaning of chapter 54 of the general statutes.

(e) No managed care organization shall refuse to negotiate in good faith with parties to a cooperative arrangement authorized by the Attorney General. Any managed care organization that violates this section shall be subject to a civil penalty of not more than twenty-five thousand dollars per day for each violation. The Attorney General may institute proceedings to enforce the provisions of this section in the superior court for the judicial district of Hartford.

(f) A violation of subsection (e) of this section shall be deemed an unfair or deceptive trade practice under chapter 735a of the general statutes.

Statement of Purpose:

To permit health care providers to enter into cooperative arrangements that would not be subject to certain antitrust laws after approval by the Attorney General, and to require managed care organizations to negotiate in good faith with providers who participate in such arrangements.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]