Enacts provisions relating to collective negotiations by health care providers with certain health care plans in certain counties; applies to health benefit plans that provide benefits for medical or surgical expenses incurred as a result of a health condition, accident or sickness, including an individual, group, blanket or franchise insurance policy or insurance agreement offered by certain enumerated entities.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4472
SPONSOR: Gottfried (MS)
 
TITLE OF BILL: An act to amend the public health law, in relation to
requirements for collective negotiations by health care providers with
certain health benefit plans
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill is designed to restore fairness in the contracting process
between physicians and large managed care plans by allowing doctors to
join together to negotiate contract provisions. This legislation would
not authorize strikes of health benefit plans by physicians.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 is a statement of legislative intent that states that the
legislature finds it appropriate and necessary to authorize collective
negotiations on patient care issues and on fee-related and other issues
where it determines that health plans have an undue advantage negotiat-
ing the terms of contracts with health care providers. The legislative
intent clarifies that the act is not intended to apply or affect collec-
tive bargaining relationships involving health care providers who are
employees of health care providers or rights relating to collective
bargaining arising under applicable federal/state collective bargaining
statutes.
Section 2 cites the bill as the Health Care Consumer and Provider
Protection Act
Section 3 amends article 49 to the public health law by adding a new
title III titled Collective Negotiations by Health Care Providers with
Health Care Plans
This legislation adds a new Article 49-A to the public health law to
authorize collective bargaining for independent contractor health care
providers including physicians or an entity that employs or utilizes
health care providers to provide health care services. This bill would
create a system under which the state would closely monitor those nego-
tiations, and any negotiations involving fee-related matters would only
be permitted when an individual managed care plan controls a substantial
share of the managed care market. The Commissioner of Health would be
authorized to approve the health care providers' representative request
to negotiate based upon the benefits to be achieved for providers and
consumers of health services, and is required to review any offer
submitted to the health care providers' representative prior to sharing
with affected health care providers. The legislation would also create a
mechanism for resolving disputes when there is an impasse or when the
health plan refuses to negotiate. The bill would also direct the Commis-
sioner of Health to approve any final agreement as well as monitor the
implemented agreements to ensure continued compliance with the law.
Importantly, this legislation would not authorize strikes or concerted
action by physicians in response to negotiations with health care plans.
 
JUSTIFICATION:
Currently, federal antitrust laws prohibit individual physicians from
collectively negotiating any provisions of contracts they sign with
managed care entities. This bill would allow physicians in New York
State to conduct some collective negotiations by creating a system under
which the state would closely monitor those negotiations, facilitate
resolution of negotiation impasses, and actively monitor implementation
of agreements. Negotiations involving fee-related matters would be
prohibited unless an individual managed care plan controls a substantial
share of the managed care market.
Giving physicians greater ability to advocate for patients in contract
negotiations is critical since large health maintenance organizations
control huge shares of the health insurance market, both in New York and
across the country. In the last few years we have seen the mergers of
United Healthcare and Oxford, MVP and Preferred Care, and Wellpoint with
Wellchoice (Empire). As of March 2008, almost 75% of the enrollees in
managed care plans in New York State were enrolled in just five health
plans (GHWHIP, United/Oxford/Amerchoice, Excellus, Empire and
MVP/Preferred Care). We have also seen an emerging trend of long-time
not-for-profit health insurance companies such as Empire and HIP seeking
to convert to for-profit status.
Due to the current imbalance of negotiating power in favor of the
managed care plans, physicians and other health care providers are
offered take-it-or-leave-it contracts by health plans that significantly
hamper their ability to provide quality patient care. These contracts
permit burdensome processes and unjustifiably long wait times for
obtaining pre-authorization to provide needed patient care; impose limi-
tations on whom a physician may refer a patient for necessary care;
permit demands for refunds of payments long after the time that such
payments were originally made; permit health plans to make major changes
to key elements of a contract without physician consent; and cede to
physicians the legal consequences for patients harmed by health plan
utilization review decisions.
This bill, by allowing independent contractor physicians to conduct some
collective negotiations while being closely monitored by the state,
would give physicians greater ability to advocate for patients in
contract negotiations. This bill would create a system under which the
state would closely monitor those negotiations, and any negotiations
involving fee-related matters would only be permitted when an individual
managed care plan controls a substantial share of the managed care
market. This legislation would not authorize strikes or boycotts of
health benefit plans by physicians
 
PRIOR LEGISLATIVE HISTORY:
2000: A.9484-A (Canastrari) - A Referred to Health/Senate Finance
2001-2002: A.5466 (Canastrari) - Reported to Third Reading Calendar
2003-2004: A.1317-A (Canastrari) - Reported to Ways & Means
2005-2006: A.6458 (Canastrari) - Reported to Ways & Means
2007-2008: A.2177 (Canastrari) - Reported to Ways & Means
2009-2010: A.430143 (Canastrari) - Reported to Ways and Means
2011-2012: A.2474-8 (Canastrari) - Reported to Ways and Means
2013-2014: A.5692 - Reported to Ways and Means
2015-2016: A.336-A- Reported to Ways and Means
 
FISCAL IMPLICATIONS:
None to the State. The bill would provide the legal basis for an appro-
priation of funds to implement the provisions of the bill.
 
EFFECTIVE DATE:
120 days after it shall have become a law, provided that the department
of health may promulgate and establish any regulations pursuant hereto
prior to the effective date.