House Bill 6446, An Act Concerning the Governor's Budget Recommendations for Human Services

This bill implements the governor’s recommendations for human services by eliminating cost-of-living adjustments under public assistance programs, instituting an asset test under the Medicare Savings Program, implementing a third party liability prompt pay requirement to adjudicate healthcare claims and establishing a statute of limitations on refunds, removing rate increases for boarding homes, removing inflationary adjustments for nursing homes, implementing an acuity-based reimbursement system for nursing homes, and removing rate increases for intermediate care facilities. In total, the above initiatives will result in savings of $15.4 million in FY 2022 and $40.8 million in FY 2023 ($31.3 million in FY 2022 and $79.5 million in FY 2023 after factoring in the federal share), as well as additional revenue of $0.5 million in FY 2022 and $18.8 million in FY 2023.

Information about House Bill 6446.

Significant Impacts

Sections 1-2:Eliminate Cost of Living Adjustments under Public Assistance Programs.  Current statute provides recipients of Temporary Family Assistance, State Administered General Assistance and State Supplement for the Aged, Blind and Disabled a state-funded cost of living adjustment on July 1 of each year.  This bill maintains the existing assistance levels.  It should be noted that Connecticut is one of the few states that allows TFA recipients to retain their full cash assistance benefit if their employment earnings are less than or equal to the federal poverty level.  Savings of $0.8 million in FY 2022 and $2.1 million in FY 2023 are anticipated.

Section 3: Institute an Asset Test under the Medicare Savings Program.  The Medicare Savings Program (MSP) is a Medicaid-funded program that helps Medicare recipients with income up to 246% of the federal poverty level (FPL) pay their cost sharing obligations. Depending on their income levels, individuals with income up to 211% FPL may be eligible for the Qualified Medicare Beneficiary (QMB) program, which provides coverage of Medicare Part A and Part B premiums, deductibles, coinsurance, and copayments or they may be eligible for the Specified Low-Income Medicare Beneficiary (SLMB) or the Qualifying Individual (QI, also known as Additional Low-Income Medicare Beneficiary (ALMB)) programs, which provide coverage of Medicare Part B premiums. Connecticut is one of only nine states that does not have an asset test under MSP. There are 38 states with an asset test equal to the federal minimum (currently, $7,860 for individuals and $11,800 for couples), three states with limits that are higher than the federal minimum (Maine, Massachusetts, and Minnesota) and nine states that have no asset test (Alabama, Arizona, Connecticut, Delaware, Louisiana, Mississippi, New York, Oregon, and Vermont). Prior to FY 2010, Connecticut’s income levels were in line with other states and, similarly, an asset test was in place.  Effective August 1, 2022, this bill aligns Connecticut with the majority of other states by instituting an asset test but instead of setting it equal to the federal minimum, it will align with the level in Massachusetts (currently, $15,720 for individuals and $23,600 for couples), which is double the federal minimum.  Income eligibility for MSP will remain unchanged – still the most generous in the nation.  Consistent with federal rules, countable resources would include money in a checking or savings account, stocks and bonds. An individual’s home, one car, a burial plot, up to $1,500 in a burial account, life insurance with a cash value of less than $1,500, and household and personal items would be excluded.  This bill will reduce state Medicaid expenditures related to the costs of deductibles, coinsurance and copayments under the QMB program by $11.4 million in FY 2023 ($22.8 million after factoring in the federal share). In addition, because Medicare premiums are covered through the diversion of Medicaid revenue, less revenue will need to be diverted to cover these costs, resulting in additional revenue to the state of $18.8 million in FY 2023. In total, after factoring in administrative costs, this proposal will result in net savings to the state of $26.6 million in FY 2023 with annualized savings of $33.8 million.  (For context, Connecticut’s total program costs were approximately $551 million in FY 2020, and the state’s share was approximately $272.5 million.)

Section 4: Implement Third Party Liability Prompt Pay Requirement to Adjudicate Health Care Claims and Establish a Statute of Limitations on Refunds. When the Department of Social Services(DSS), or the department’s agent, bills a health insurance company for health care services or equipment that have been provided under HUSKY Health, the processing of these claims can be delayed, sometimes indefinitely, or simply ignored.  With no statutory mandate in place, the health insurance company may take no action either to deny or pay the claim. This bill addresses this by instituting a prompt pay requirement such that a legally liable third party, upon receipt of a claim submitted by DSS (or its agent) for payment of a medical service covered under HUSKY Health, will be required to adjudicate the claim and either make payment or request information necessary to determine its legal obligation to pay the claim within 90 days of receipt of the claim. The legally liable third party will then have an uncontestable obligation to pay the submitted claim within 120 days of receipt of this claim. This proposal is consistent with prompt payment standards that are common practice in the health insurance industry and is expected to reduce state Medicaid requirements by $2.0 million in FY 2022 and $1.0 million in FY 2023.

This bill also requires legally liable third parties that have reimbursed DSS for health care services or equipment covered under HUSKY Health and have subsequently determined that they are not liable for those costs, to request any refund from DSS within twelve months of the date of the department’s initial payment.  By doing so, this provision limits the state’s exposure to unforeseen and unbudgeted costs.

Note:  This bill impacts private health insurance companies only – it does not impact legally liable individuals.