Lamont, health providers at odds over proposal to cap cost of care
Katy Golvala / CT Mirror
Health providers, hospital administrators and legislators speak out against a proposal by Gov. Ned Lamont to cap out-of-network costs for patients.
A proposal by Gov. Ned Lamont to cap the amount residents pay for out-of-network medical care is facing strong pushback from providers and hospital administrators who say the bill will result in reduced access for patients, financial burdens for providers and increased leverage for an already-powerful insurance industry.
The measure, which has received support from health care advocates across the state, would restrict providers from charging more than 240% of Medicare rates for out of network care.
“It’s a way to make sure that you as a patient have a little more control over the cost of these things,” Lamont told reporters following an event at the Capitol on Wednesday, adding that he is open to negotiating. “We’re trying to bring down the overall cost of health care. I thought this was one reasonable way we could do that.”
Providers say the cap would squeeze revenues for an industry that already faces financial pressures, like rising costs, workforce shortages and inadequate Medicaid reimbursement The measure could lead to closures of physician practices, emergency departments and entire hospitals, as well as make it harder for Connecticut to retain and recruit physicians, said several physicians who spoke out against the proposal during a press conference at the Capitol this week.
“The result for Connecticut residents will be longer wait times, fewer specialists and reduced access to care,” said Khuram Ghumman, president of the Connecticut State Medical Society. “Make no mistake: These caps do not protect patients.”
The Connecticut Hospital Association estimated that the cap could lead to more than $700 million annually in reduced payments to hospitals.
“Hospitals and health systems cannot sustain the robust health care delivery system that Connecticut residents enjoy if they cannot cover their costs,” stated CHA in written testimony opposing the bill.
Ghumman, a family medicine physician in East Granby, also said the proposal gives even more leverage to an insurance industry “that already undermines patient care by denying treatments, restricting medications and imposing burdensome prior authorizations.”
Susan Halpin, executive director for the CT Association of Health Plans, supported the cap in written testimony, calling it an “important first step” towards ensuring a balanced and competitive health care landscape. Halpin did, however, request “continued discussion” on whether 240% of Medicare is where the cap should be set.
The out-of-network cap is one of a handful of legislative efforts by Lamont this session to curb health care costs, which continue to burden families across the country. In Connecticut, total health care expenditures per capita grew 7.8% between 2022 and 2023, more than double the target growth set by the state of 2.9%.
In 2021, hospital inpatient prices in Hartford, New Haven and Bridgeport were 27%, 42% and 43% greater than the national median for hospital inpatient prices in U.S. metro areas, respectively, according to a report by the Office of Health Strategy. In comparison, Boston’s hospital inpatient prices were 9% higher than the national median.
Lamont has also proposed several provisions aimed at tackling the high cost of prescription drugs, including one that would limit price increases for generic and off-patent drugs to the annual rate of inflation.
Medicaid reimbursement rates
Some legislators and providers who oppose the out-of-network cap said the state should instead focus on increasing the reimbursement rates that it pays providers to treat Medicaid patients.
House Minority Leader Vincent Candelora, R-North Branford, said that, because the state underpays providers to treat patients with Medicaid, those same providers have to charge private payers higher rates to subsidize the gap. If the state increased Medicaid rates, it might drive costs down for private payers.
“The first thing the state needs to do is look at where our reimbursement rates are and bring them to where they should be. And that should alleviate some pressure off of our health care system so that private provider rates could come down,” Candelora said in an interview with the Connecticut Mirror.
Legislators and physicians for years have been sounding the alarm that the prevailing reimbursement rates are too low, making it unaffordable for providers to treat patients with Medicaid coverage, thus decreasing access to care for those residents.
In 2007, Connecticut set the Medicaid reimbursement rates for most physician services at 57.5% of the Medicare rate at the time. The rates have not been broadly adjusted since, meaning many practitioners in the state receive Medicaid payments that are pegged to Medicare rates from 18 years ago — though certain providers, including primary care physicians and OBGYNs, have received rate increases.
In his budget, Lamont proposed an increase of $35.4 million in state funding for Medicaid reimbursement to providers over the FY 2026-2027 biennium. The Appropriations Committee adopted a budget that would add $15.4 million next fiscal year and $30 million in the following.
A group of Democratic legislators have proposed bringing rates up to at least 75% of Medicare over 3 years, which would require a much more significant increase than either Lamont or the Appropriations Committee has proposed.
Rep. Jillian Gilchrest, D-West Hartford, co-chair of the Human Services Committee, said she and other legislators on the committee are pushing for the state to invest $30 million in FY 26 and perhaps an additional $50 million in FY 27 to ensure Medicaid rates can meaningfully increase.
“[That funding] gets us on the path of a three year phase-in,” Gilchrest said.
House Republicans proposed a budget that would invest $137.5 million over the biennium to boost reimbursement rates, a figure Candelora said is based off of a rate study finalized by the Department of Social Services earlier this year.
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