SB 87, An Act Strengthening Nonprofits

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE HUMAN SERVICES COMMITTEE

Tuesday, March 3, 2026

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning SB 87, An Act Strengthening Nonprofits.  CHA supports this bill.

Connecticut hospitals make our state stronger by delivering nationally recognized, world-class care, supporting jobs and economic growth, and serving communities across Connecticut.  Every day, hospitals improve access, affordability, and health equity — providing care to all patients regardless of ability to pay.  At the same time, hospitals invest in their workforce and local communities, even as they navigate significant financial and federal challenges.

SB 87 makes important and practical reforms that strengthen not-for-profit providers and improve stability across Connecticut’s healthcare delivery system.  Specifically, this bill provides meaningful protections against retroactive insurance claim denials and payment recoupments — commonly referred to as “clawbacks” — through the following provisions:

  • Prohibits insurers and other health coverage entities from retroactively denying or recouping payment for authorized covered services more than 12 months after receipt of a clean claim
  • Shortens the current recoupment window from 18 months to 12 months after the date of receipt of a clean claim
  • Preserves appropriate exceptions for fraud, duplicate payment, coordination of benefits, or clear billing errors

These changes are significant for hospitals. 

Hospitals operate on narrow margins and rely on predictable reimbursement for services already rendered.  When insurers recoup payments 12 months or more after a claim is paid, it creates revenue volatility, administrative burden, and financial uncertainty.  By establishing a clear 12-month limit, this bill improves financial predictability, supports responsible budgeting, and reduces costly disputes over aged claims.

Importantly, the bill maintains appropriate safeguards for payers in cases involving fraud or improper billing.  It strikes a fair balance — protecting legitimate oversight while preventing prolonged retroactive clawbacks that destabilize providers.

While hospitals will benefit from improved revenue stability and reduced administrative burden, these reforms extend broadly to other nonprofit and community-based providers as well, including behavioral health providers, primary care practices, and human service organizations.  The bill would strengthen the not-for-profit healthcare infrastructure statewide by ensuring providers are not subject to indefinite financial exposure for services that were properly authorized and delivered.

In addition, the bill establishes a Nonprofit Provider Advisory Board to promote cross-agency coordination, payment reform strategies, and long-term financial viability of nonprofit organizations.  This collaborative approach supports and should improve stability and efficiency across the healthcare landscape.

For these reasons, we believe SB 87 provides thoughtful, balanced reforms that protect patients, support providers, and would strengthen Connecticut’s not-for-profit healthcare delivery system.

Thank you for your consideration of our position.  For additional information, contact CHA Government Relations at (203) 294-7301.