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A03378 Summary:

BILL NOA03378
 
SAME ASNo Same As
 
SPONSORPretlow
 
COSPNSR
 
MLTSPNSR
 
Add Art 57 §§5701 - 5709, Ins L
 
Relates to the NYS Health Care Consumer and Provider Protection and Equity Act.
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A03378 Actions:

BILL NOA03378
 
01/26/2021referred to insurance
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A03378 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3378
 
SPONSOR: Pretlow
  TITLE OF BILL: An act to amend the insurance law, in relation to the health care consumer and provider protection and equity act   PURPOSE: To allow physicians and dentists to negotiate collectively with employ- ers.   SUMMARY OF PROVISIONS: Section 1 -- Creates a new Article 80 within the Insurance Law and eight sections within Article 80. Section 8001 states the Legislative Findings justifying this legis- lation. Section 8002 defines -- for purposes of this Article -- the terms "authorized third party" and "health care plan." Section 8003 authorizes physicians to collectively negotiate with health benefit plans. Requires the physicians to provide notice and certain information to a state panel before negotiations. Establishes certain procedure& that must take place before and during negotiations., States when the state panel shall approve a collectively negotiated contract. Section 8004 establishes state panel hearing and review procedures. Section 8005 allows the state panel to set fees for parties before the panel. Section 8006 requires that parties negotiate in good faith. Section 8007 states that nothing in this article. shall be construed to permit two or more physicians or dentists to engage in a joint cessa- tion, reduction or limitation of health care services. Section 8008 states that nothing in this article shall affect any other collective bargaining rights under state or federal law. Section 2 -- Effective date.   JUSTIFICATION: For New York to have an active and competitive free marketplace, New York's doctors and dentists must be able to collectively negotiate with managed care organizations. This legislation empowers these health care professionals to do just that. Too, often, physicians and dentists receive unfair treatment from managed care organizations. This occurs because these professionals are unable to join together and collectively negotiate with these entities. By enacting this legislation, we can level the playing field, give doctors and dentists the power they deserve, and ensure that all New Yorkers receive high-quality health care services.   LEGISLATIVE HISTORY: A4681 2019-2020 referred to insurance A.9871 2009/2010 referred to insurance. 01/13/15 referred to insurance 01/06/16 referred to insurance A2091 2017/2018 referred to insurance   FISCAL IMPLICATIONS: Undetermined.   EFFECTIVE DATE: This act shall take effect on the one hundred eightieth day after it shall have become a law.
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A03378 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3378
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 26, 2021
                                       ___________
 
        Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
          tee on Insurance
 
        AN ACT to amend the insurance  law,  in  relation  to  the  health  care
          consumer and provider protection and equity act
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The insurance law is amended by adding a new article 57  to
     2  read as follows:
     3                                  ARTICLE 57
     4                HEALTH CARE CONSUMER AND PROVIDER PROTECTION
     5                               AND EQUITY ACT
     6  Section 5701. Legislative findings.
     7          5702. Collective action by competing physicians.
     8          5703. Application for hearing.
     9          5704. Fee for registration of authorized third parties.
    10          5705. Regulations.
    11          5706. Good faith negotiations.
    12          5707. Prohibition of collective cessation of services.
    13          5708. No interference with other statutory rights.
    14          5709. Definitions.
    15    § 5701. Legislative findings. The legislature finds and declares that:
    16    (a)  Under  the  McCarran-Ferguson  act  of 1945, 15 U.S.C. § 1011, et
    17  seq., insurance companies are exempt from federal anti-trust  laws  that
    18  otherwise apply to most other businesses;
    19    (b)  Active,  robust and fully competitive markets for health care and
    20  dental services provide the best opportunity for the residents  of  this
    21  state  to  receive  high-quality  health  care and dental services at an
    22  appropriate cost;
    23    (c) A substantial amount of health care and dental  services  in  this
    24  state  is  purchased  for  the  benefit of patients by health and dental
    25  insurance carriers engaged in the financing of health  care  and  dental

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00453-01-1

        A. 3378                             2
 
     1  services  or  is  otherwise delivered subject to the terms of agreements
     2  between carriers and physicians and dentists;
     3    (d)  Carriers  are  able to control the flow of patients to physicians
     4  and dentists through compelling financial  incentives  for  patients  in
     5  their  health  and dental benefits plans to utilize only the services of
     6  physicians and dentists with whom the carriers have contracted;
     7    (e) Carriers also control the health care and dental services rendered
     8  to patients through utilization management and other managed care  tools
     9  and associated coverage and payment policies;
    10    (f)  Carriers  are  often  able  to virtually dictate the terms of the
    11  contracts that they offer physicians and  dentists  and  commonly  offer
    12  these contracts on a take-it-or-leave-it basis;
    13    (g)  The  power  of  carriers to unilaterally impose provider contract
    14  terms jeopardizes the ability of physicians and dentists to deliver  the
    15  superior quality health care and dental services traditionally available
    16  in this state;
    17    (h)  Physicians  and  dentists  do not have sufficient market power to
    18  reject unfair provider contract terms offered by  carriers  that  impede
    19  their  ability to deliver medically appropriate care without undue delay
    20  or difficulties;
    21    (i) Inadequate reimbursement and other unfair payment terms offered by
    22  carriers adversely affect the quality of patient care and access to care
    23  by reducing the resources that physicians and  dentists  can  devote  to
    24  patient  care  and  decreasing the time that physicians and dentists are
    25  able to spend with their patients;
    26    (j) Inequitable reimbursement and  other  unfair  payment  terms  also
    27  endanger  the health care infrastructure and medical progress by divert-
    28  ing capital needed for reinvestment in the health care delivery  system,
    29  curtailing  the  purchase of state-of-the-art technology, the pursuit of
    30  medical research, and expansion of medical services, all to  the  detri-
    31  ment of the residents of this state;
    32    (k)  The  inevitable  collateral reduction and migration of the health
    33  care work force will also have negative consequences for the economy  of
    34  this state;
    35    (l)  Empowering independent physicians and dentists to jointly negoti-
    36  ate with carriers as provided in this  article  will  help  restore  the
    37  competitive  balance  and  improve competition in the markets for health
    38  care and dental services in this state, thereby providing  benefits  for
    39  consumers, physicians and dentists and less dominant carriers;
    40    (m) This article is necessary and proper, and constitutes an appropri-
    41  ate  exercise of the authority of this state to regulate the business of
    42  insurance and the delivery of health care and dental services;
    43    (n) The pro-competitive and other benefits of the  joint  negotiations
    44  and  related  joint  activity authorized by this article, including, but
    45  not limited to, restoring the competitive  balance  in  the  market  for
    46  health care services, protecting access to quality patient care, promot-
    47  ing  the  health care infrastructure and medical progress, and improving
    48  communications, outweigh any potential anti-competitive effects of  this
    49  article; and
    50    (o)  It  is  the intention of the legislature to authorize independent
    51  physicians and dentists to jointly negotiate with carriers and to quali-
    52  fy such joint negotiations and related joint activities for  the  state-
    53  action  exemption  to the federal antitrust laws through the articulated
    54  state policy and active supervision provided under this article.
    55    § 5702. Collective  action  by  competing  physicians.  (a)  Competing
    56  physicians  may  meet and communicate in order to collectively negotiate

        A. 3378                             3
 
     1  with a health benefit plan concerning any  of  the  contract  terms  and
     2  conditions  described  in  this  subsection,  but  may not negotiate the
     3  exclusion of providers who are non-physicians from direct  reimbursement
     4  by  a  health  benefit  plan, and may not negotiate the setting in which
     5  providers who are non-physicians deliver services. Competing  physicians
     6  may  not  engage  in  a  boycott  related to these terms and conditions.
     7  Competing physicians may meet and communicate concerning:
     8    (1) physician clinical practice guidelines and coverage criteria;
     9    (2) the respective liability of physicians and the health benefit plan
    10  for the treatment or lack of treatment of insured or enrolled persons;
    11    (3) administrative procedures, including methods  and  timing  of  the
    12  payment of services to physicians;
    13    (4) procedures for the resolution of disputes between the health bene-
    14  fit plan and physicians;
    15    (5) patient referral procedures;
    16    (6) the formulation and application of reimbursement methodology;
    17    (7) quality assurance programs;
    18    (8) health service utilization review procedures; and
    19    (9)  criteria to be used by health benefit plans for the selection and
    20  termination of physicians, including  whether  to  engage  in  selective
    21  contracting.
    22    (b)  An authorized third party that intends to negotiate with a health
    23  benefit plan the items identified under subsection (a) of  this  section
    24  shall provide the independent review panel, as established by subsection
    25  (c)  of  this  section, with written notice of the intended negotiations
    26  before the negotiations begin.
    27    (c) The independent review panel shall consist of three members:
    28    (1) The attorney general, or  his  or  her  designee  who  shall  have
    29  particular expertise in the area of antitrust law;
    30    (2) The state commissioner of health, or his or her designee; and
    31    (3) The state commissioner of labor, or his or her designee.
    32    (d)  In  exercising the collective rights granted by subsection (a) of
    33  this section:
    34    (1) physicians may communicate with each other  with  respect  to  the
    35  contractual  terms and conditions to be negotiated with a health benefit
    36  plan;
    37    (2) physicians may communicate with an authorized third party  regard-
    38  ing the terms and conditions of contracts allowed under this section;
    39    (3) the authorized third party is the sole party authorized to negoti-
    40  ate  with  a  health benefit plan on behalf of a defined group of physi-
    41  cians;
    42    (4) physicians can be bound by the terms and conditions negotiated  by
    43  the authorized third party that represents their interests;
    44    (5)  a  health  benefit  plan  communicating  or  negotiating with the
    45  authorized third party may contract with, or  offer  different  contract
    46  terms and conditions to, individual competing physicians;
    47    (6)  an  authorized  third  party  may  not represent more than thirty
    48  percent of the market of practicing  physicians  for  the  provision  of
    49  services  in  the geographic service area or proposed geographic service
    50  area, if the health benefit plan has less than  a  five  percent  market
    51  share  as  determined  by the number of covered lives as reported by the
    52  superintendent for the most recently completed calendar year or  by  the
    53  actual  number of consumers of prepaid comprehensive health services; in
    54  this paragraph, "covered lives" means the total  number  of  individuals
    55  who are entitled to benefits under the health benefit plan;

        A. 3378                             4
 
     1    (7)  the independent review panel may limit the percentage of practic-
     2  ing physicians represented by an authorized third  party;  however,  the
     3  limitation may not be less than thirty percent of the market of practic-
     4  ing  physicians  in  the  geographic service area or proposed geographic
     5  service  area; when determining whether to impose a limitation described
     6  under this paragraph, the attorney general shall consider the provisions
     7  described under subsections (f), (g) and (h) of this section; this para-
     8  graph does not apply if the  market  of  practicing  physicians  in  the
     9  geographic  service area or proposed geographic service area consists of
    10  forty or fewer individuals; and
    11    (8) the authorized third party shall comply  with  the  provisions  of
    12  subsection (e) of this section.
    13    (e)  A  person acting or proposing to act as an authorized third party
    14  under this section shall:
    15    (1) Before engaging in collective negotiations with a  health  benefit
    16  plan:
    17    (A)  file with the independent review panel the information that iden-
    18  tifies the authorized third party, the  physicians  represented  by  the
    19  third  party,  the  authorized  third party's plan of operation, and the
    20  authorized third party's  procedures  to  ensure  compliance  with  this
    21  section;
    22    (B)  furnish to the independent review panel for its approval, a brief
    23  report that identifies the proposed subject matter of  the  negotiations
    24  or  discussions with a health benefit plan and that contains an explana-
    25  tion of the efficiencies or benefits that are expected  to  be  achieved
    26  through the collective negotiations, product and geographic market defi-
    27  nition,  current  price levels, availability of substitutes, and ease of
    28  entry for new competing physicians;
    29    (C) the panel shall review whether the group of physicians represented
    30  by the authorized third party is appropriate to represent the  interests
    31  involved  in  the  negotiations; the panel may not approve the report if
    32  the group of physicians is not appropriate to  represent  the  interests
    33  involved  in the negotiations or if the proposed negotiations exceed the
    34  authority granted in this chapter and, if the group is  not  appropriate
    35  or  the negotiations exceed the granted authority, shall provide written
    36  notice prohibiting the collective negotiations from proceeding, at which
    37  time the proposed authorized third party may request a hearing  pursuant
    38  to section five thousand seven hundred three of this article;
    39    (D)  the authorized third party shall provide supplemental information
    40  to the panel as new information becomes available  that  indicates  that
    41  the  subject  matter  of  negotiations  with the health benefit plan has
    42  changed or will change; the panel may, as it deems appropriate,  request
    43  additional information in order to assess the likely competitive effects
    44  of  negotiation; the panel may also solicit input from other physicians,
    45  affected health plans, and patients regarding the potential  competitive
    46  effects of negotiations;
    47    (E) within fourteen days after receiving a health benefit plan's deci-
    48  sion  to  decline  to  negotiate or to terminate negotiations, or within
    49  fourteen days after requesting negotiations with a health  benefit  plan
    50  that  fails  to respond within that time, report to the attorney general
    51  that negotiations have ended or have been declined;
    52    (2) While negotiating with a health benefit plan:
    53    (A) provide the independent review panel, upon the independent  review
    54  panel's  request,  with  copies  of  all written communications that are
    55  relevant to the negotiations, that are in the possession of the  author-
    56  ized third party, and that are between:

        A. 3378                             5
 
     1    i. physicians and the health benefit plan,
     2    ii. physicians and authorized third parties,
     3    iii. authorized third parties and health plans,
     4    iv. the individual physicians, and
     5    v. authorized third parties;
     6    (B) before reporting the results of negotiations with a health benefit
     7  plan  and  before giving physicians an evaluation of any offer made by a
     8  health benefit plan, provide to the independent  review  panel  for  its
     9  approval,  a copy of all communications to be made to physicians related
    10  to the negotiations, discussion, and health benefit plan offers.
    11    (3) Must be an organization that represents both consumers and provid-
    12  ers of health care.
    13    (f) The independent review panel shall either  approve  or  disapprove
    14  the  contract  that was the subject of the collective negotiation within
    15  sixty days after receiving the reports required under subsection (e)  of
    16  this  section.  If  the  contract is disapproved, the independent review
    17  panel shall furnish a written explanation.  Upon disapproval, the  inde-
    18  pendent  review  panel shall denote any deficiencies along with a state-
    19  ment of specific remedial measures that  would  correct  any  identified
    20  deficiencies.  An  authorized  third party who fails to obtain the inde-
    21  pendent review panel's approval is considered to be acting  outside  the
    22  authority of this section.
    23    (g)  The  independent  review panel shall approve a collective negoti-
    24  ation contract if:
    25    (1) the competitive and other benefits of the contract terms  outweigh
    26  any anticompetitive effects; and
    27    (2)  the  contract terms are consistent with other applicable laws and
    28  regulations.
    29    (h) The competitive and other benefits of joint negotiations or  nego-
    30  tiated provider contract terms must include:
    31    (1)  restoration  of  the competitive balance in the market for health
    32  care services;
    33    (2) protections for access to quality patient care;
    34    (3) promotion of health care infrastructure and  medical  advancement;
    35  or
    36    (4)  improved  communications between health care providers and health
    37  care insurers.
    38    (i) When weighing the anticompetitive effects of contract  terms,  the
    39  independent review panel shall consider whether the terms:
    40    (1) provide for excessive payments; or
    41    (2)  contribute to the escalation of the cost of providing health care
    42  services.
    43    (j) This section does not authorize competing  physicians  to  act  in
    44  concert  in  response  to  a  report issued by an authorized third party
    45  related to the authorized third party's discussion or negotiations  with
    46  a  health  benefit  plan.  The  authorized  third party shall advise the
    47  physicians of the provisions of this subsection and shall warn  them  of
    48  the potential for legal action against those who violate state or feder-
    49  al antitrust laws by exceeding the authority granted under this section.
    50    (k)  A  contract  allowed  under this section may not exceed a term of
    51  five years.
    52    (l) The documents relating to a collective negotiation described under
    53  this section that are in the possession of the  department  of  law  are
    54  confidential and not open to public inspection.
    55    (m)  Nothing  in this section shall be construed as exempting from the
    56  application of the antitrust laws the conduct of  providers  or  negoti-

        A. 3378                             6
 
     1  ations  or agreements between providers and a health benefit plan if the
     2  purpose or effect of the conduct, negotiations, or agreements would  be,
     3  directly   or   indirectly,  to  exclude,  limit  the  participation  or
     4  reimbursement  of,  or  otherwise  limit  the  scope  of  services to be
     5  provided by separate or competing classes of providers who  practice  or
     6  seek  to  practice within the scope of the occupational licenses held by
     7  the providers.
     8    (n) In this section, "geographic service area"  means  the  geographic
     9  area of the physicians seeking to jointly negotiate.
    10    § 5703. Application for hearing. (a) Within thirty days from the mail-
    11  ing  by  the independent review panel of the notice of disapproval of an
    12  application by a proposed authorized third  party  representative  under
    13  subsection  (e) of section five thousand seven hundred two of this arti-
    14  cle, said representative may make a written application to the independ-
    15  ent review panel for a hearing, the sole purpose of which  would  be  to
    16  review the independent review panel's disapproval.
    17    (b)  Upon receipt of a timely application for a hearing, the independ-
    18  ent review panel shall schedule and conduct an  administrative  hearing.
    19  The  hearing  shall be held within thirty days of the application unless
    20  the representative seeks an extension.
    21    (c) The independent review panel shall appoint a neutral hearing offi-
    22  cer to preside over the hearing.
    23    § 5704. Fee for registration of  authorized  third  parties.  (a)  The
    24  independent  review  panel  shall  adopt  regulations that establish the
    25  amount and manner of payment of a registration fee for authorized  third
    26  parties.  The  independent review panel shall establish the fee level so
    27  that the total amount of fees collected from  authorized  third  parties
    28  approximately  equals  the  actual regulatory costs for the oversight of
    29  joint negotiations between physicians  and  health  benefit  plans.  The
    30  independent  review  panel shall annually review the fee level to deter-
    31  mine whether  the  regulatory  costs  are  approximately  equal  to  fee
    32  collections.  If the review indicates that the fee collections and regu-
    33  latory costs are not approximately equal, the independent  review  panel
    34  shall  calculate  fee  adjustments  and  adopt  regulations  under  this
    35  subsection to implement the adjustments. In January of  each  year,  the
    36  independent review panel shall report on the fee level and revisions for
    37  the  previous year under this subsection to the office of management and
    38  budget.
    39    (b) In this section, "regulatory costs" means costs of the independent
    40  review panel that are attributable to oversight  of  joint  negotiations
    41  between physicians and health benefit plans.
    42    § 5705. Regulations. The attorney general may promulgate any rules and
    43  regulations necessary to implement this article.
    44    §  5706. Good faith negotiations. A health benefit plan and an author-
    45  ized third party shall negotiate in good faith regarding the  terms  and
    46  conditions of physician or dentist contracts pursuant to this article.
    47    §   5707.   Prohibition  of  collective  cessation  of  services.  The
    48  provisions of this article shall not be construed to permit two or  more
    49  physicians  or  dentists  to  jointly engage in a coordinated cessation,
    50  reduction or limitation of the  health  care  or  dental  services  they
    51  provide.
    52    § 5708. No interference with other statutory rights. The provisions of
    53  this  article shall not affect the collective bargaining rights an indi-
    54  vidual provider may  otherwise  have  pursuant  to  the  National  Labor
    55  Relations  Act,  29 U.S.C. § 151, et seq.; New York state public employ-

        A. 3378                             7
 
     1  ees' fair employment act (article fourteen of the civil service law); or
     2  any other statute.
     3    § 5709. Definitions. In this article:
     4    (a)  "authorized  third party" means a person authorized by the physi-
     5  cians to negotiate on their behalf with a health benefit plan under this
     6  chapter; and
     7    (b) "health benefit plan" means a health care insurer subject to arti-
     8  cle thirty-two or forty-three  of  this  chapter,  or  any  organization
     9  licensed under article forty-three of this chapter, but does not include
    10  a self-insured health benefit plan.
    11    § 2. This act shall take effect on the one hundred eightieth day after
    12  it shall have become a law.
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