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A04226 Summary:

BILL NOA04226
 
SAME ASNo Same As
 
SPONSORQuart
 
COSPNSR
 
MLTSPNSR
 
Amd 4900, 4901 & 4906, Ins L
 
Relates to the registration of office-based surgery facilities and payments for the use thereof.
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A04226 Actions:

BILL NOA04226
 
02/01/2017referred to insurance
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A04226 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4226
 
SPONSOR: Quart
  TITLE OF BILL: An act to amend the insurance law, in relation to registration of office-based surgery facilities and payments for the use thereof   PURPOSE OR GENERAL IDEA OF BILL: To ensure that office-based surgery facilities, certified or accredited pursuant to § 230d of the public health law 'are permitted to seek reimbursement from health plans for a facility fee.   SUMMARY OF SPECIFIC PROVISIONS: Section 2 adds office-based surgery facilities, certified or accredited pursuant to § 230d of the public health law, to clause (1) of subpara- graph (A) of paragraph 1 of subsection (e) and subsection (g) of section 4900 of the insurance law. Section 3 adds office-based surgery facilities, certified or accredited pursuant to § 230d of the public health law, to paragraph 2 of subsection (b) of section 4901 of the insurance law. Section 4 adds office-based surgery facilities, certified or accredited pursuant to § 230d of the public health law, to subsection (b) of section 4906 of the insurance law. Section 5 includes the effective date.   EXISTING LAW: Current law requires OBS facilities to obtain and maintain full accred- ited status by a nationally-recognized accrediting agency approved by the Commissioner of Health. There are three accreditation entities which have been approved by the Commissioner: Accreditation Association for Ambulatory Health Care (AAAHC), American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF) and the Joint Commission.   JUSTIFICATION: In 2007, legislation was enacted to require that if certain procedures are not performed in a hospital or other Article 28 facility, they must be performed in an accredited OBS facility. Sections of this legis- lation became effective on January 14, 2008 and on July 14, 2009. This measure was the culmination of the work of the Department of Health's Committee on Quality Assurance in Office-Based Surgery. The accreditation conferred upon these OBS facilities assures that these practices meet nationally recognized standards for patient safety and quality care and include: environment of care; emergency management; infection prevention and control; life safety; medication management; national patient safety goals; performance improvement; record of care; treatment of services; rights and responsibilities of the individual; and transplant safety. Accredited OBS facilities provide quality care at a lower cost than care provided in more costly Article 28 Ambulatory Surgery Centers (ASCs) and hospitals. In fact, for thousands of New Yorkers, these facilities represent critical access points for vital, affordable health care services. However, many health plans refuse to pay OBS facilities a facility fee, even though accredited OBS facilities must shoulder the burden of significant costs just like ASCs and hospitals. Unfortunately, there has been a lack of recognition of these costs on the part of third party payors. More importantly, insurance companies have also failed to recognize that the impact of non-payment of these fees has been to drive procedures from the low cost OBS locations into the much more expensive hospital and other Article 28 facilities. This inevitable shift will dramatically drive up the cost of medical care. Sadly, numerous accred- ited OBS facilities have already started to close and move procedures to more expensive Article 28 facilities and hospitals. Inexplicably, since the enactment of the OBS accreditation process, third party payors have cited the fact that OBS facilities are not licensed as a basis for denial of claims. This bill addresses that by establishing a registration and certification process to provide OBS facilities with an added level of recognition to better enable them to seek reimbursement for facility fees from third party payors. In addition, those few third party payors who have reimbursed OBS facil- ities have done so only for in-network facilities. To make matters worse, payors will often refuse to reimburse for out-of-network facili- ties, even in cases where the insureds have contracted and paid for out-of-network coverage. For the most part, OBS facilities have been denied access to the health plans' network further hindering their abil- ity to seek reimbursement and negatively impacting their patients' choice and access and to low cost, quality care. This bill would correct such inequity by providing accredited office-based surgery facilities with a mechanism to obtain a formal recognition through a certificate of registration. Specifically, the bill would authorize accredited OBS facilities to seek reimbursement for a facility fee if the health plan currently reimburses for the use of the facility charged in connection with the same covered procedure performed at an ASC or hospital, provided however, that when calculating the appropriate rate of OBS facility fees, the health plans may take into consideration certain comparable and non-comparable costs and obligations of ASCs and hospi- tals. This recognition under the law and ability to seek certain reimbursements will assure the continued operation of these safe and cost-effective OBS practices thereby maintaining access to affordable, quality care for thousands of patients.   PRIOR LEGISLATIVE HISTORY: 2015-2016: A2061 died in Insurance Committee 2013-2014: A7944 died in Insurance Committee 2011: A7431B died in Health Committee.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately; provided, subdivision 6 of section 230-d of the public health law shall be deemed to have been in full force and effect on and after January 18, 2009.
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A04226 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          4226
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 1, 2017
                                       ___________
 
        Introduced  by M. of A. QUART -- read once and referred to the Committee
          on Insurance
 
        AN ACT to amend the  insurance  law,  in  relation  to  registration  of
          office-based surgery facilities and payments for the use thereof
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Legislative intent. The legislature hereby finds  that  New
     2  York  state  is  home  to approximately 1,000 accredited physician-owned
     3  ambulatory surgery facilities, referred to as Office-Based Surgery (OBS)
     4  practices, currently providing patient access to virtually all types  of
     5  covered  outpatient  surgical  procedures  safely  and  at  a lower cost
     6  compared to other settings,  including  traditional  ambulatory  surgery
     7  centers and hospitals.
     8    The  legislature  further  finds  that advances in medicine, including
     9  surgical techniques, equipment and  improvements  in  anesthesia  enable
    10  procedures to be performed safely, conveniently and at a much lower cost
    11  in  an office-based setting. In fact, conservative estimates show physi-
    12  cian-owned ambulatory surgery facilities can  achieve  cost  savings  of
    13  30%-40%  as  compared with other settings. The enviable safety record of
    14  the accredited OBS industry is also well established.
    15    The legislature also finds that like many states, New York is  experi-
    16  encing  a  growing  physician  shortage.  The  problem is compounded for
    17  accredited office-based surgery facilities and the patients  they  treat
    18  by  the  recent  refusal on the part of many third party payers to reim-
    19  burse facility costs for covered procedures. These expenses are substan-
    20  tial and include capital costs, equipment usage, supplies and  overhead.
    21  The  motives behind these denials are inexplicable given that this venue
    22  represents the lowest-cost provider. In fact, it was not long  ago  that
    23  insurers  were consistently reimbursing OBS practices for their facility
    24  costs. Practitioners invested in  their  practices  dependent  on  these
    25  established reimbursement practices.  Without the mechanism to negotiate
    26  with the payers, these mostly small or solo practices lack the clout and
    27  market  power to negotiate and convince insurers to reinstate reimburse-
    28  ment.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08898-01-7

        A. 4226                             2
 
     1    The legislature also finds that lack of reimbursement has driven  many
     2  physician  owned  ambulatory  surgery  practices out of the market. Many
     3  more are likely to follow resulting in thousands of lost jobs, decreased
     4  access to care and substantially higher costs to patients and the  over-
     5  all healthcare delivery system.
     6    The  legislature  further  finds that while office-based surgery prac-
     7  tices are recognized in statute pursuant to the  accreditation  require-
     8  ments  in  section  230-d  of the public health law, there is nothing in
     9  current law  or  regulations  that  specifically  identifies  accredited
    10  office-based  surgery entities as facilities entitled to seek reimburse-
    11  ment for facility related costs.
    12    Therefore, the legislature hereby declares that, due to  the  integral
    13  role  that  accredited  office-based surgery practices play in the safe,
    14  efficient and low-cost delivery of surgical services,  as  well  as  the
    15  need to protect and enhance patient safety and access to affordable care
    16  for  all  New Yorkers, it is in the interest of the people of this state
    17  to further enhance recognition of accredited office-based surgery  prac-
    18  tice  and protect and encourage a robust and successful industry in this
    19  state.
    20    § 2. Clause (i) of subparagraph (A) of paragraph 1 of  subsection  (e)
    21  and  subsection  (g) of section 4900 of the insurance law, as amended by
    22  chapter 558 of the laws of 1999, are amended to read as follows:
    23    (i) provided by a facility licensed, certified or accredited  pursuant
    24  to  section  two  hundred  thirty-d,  article  twenty-eight, thirty-six,
    25  forty-four or forty-seven of the public health law or pursuant to  arti-
    26  cle  nineteen,  [twenty-three,]  thirty-one  or thirty-two of the mental
    27  hygiene law; or
    28    (g) "Health care provider" means  a  health  care  professional  or  a
    29  facility  licensed,  certified  or  accredited  pursuant  to section two
    30  hundred  thirty-d,  article  twenty-eight,  thirty-six,  forty-four   or
    31  forty-seven of the public health law or a facility licensed or certified
    32  pursuant  to  article nineteen, [twenty-three,] thirty-one or thirty-two
    33  of the mental hygiene law.
    34    § 3. Paragraph 2 of subsection (b) of section 4901  of  the  insurance
    35  law,  as added by chapter 705 of the laws of 1996, is amended to read as
    36  follows:
    37    (2) Those circumstances, if any, under which utilization review may be
    38  delegated to a  utilization  review  program  conducted  by  a  facility
    39  licensed,  certified or accredited pursuant to section two hundred thir-
    40  ty-d or article twenty-eight of the public health  law  or  pursuant  to
    41  article thirty-one of the mental hygiene law;
    42    §  4. Subsection (b) of section 4906 of the insurance law, as added by
    43  chapter 237 of the laws of 2009, is amended to read as follows:
    44    (b) Notwithstanding subsection (a) of this section,  in  lieu  of  the
    45  external appeal process as set forth in this article, a health care plan
    46  and a facility licensed, certified or accredited pursuant to section two
    47  hundred  thirty-d  or  article twenty-eight of the public health law may
    48  agree to an alternative dispute resolution mechanism to resolve disputes
    49  otherwise subject to this article.
    50    § 5. This act shall take effect immediately and  shall  be  deemed  to
    51  have  been  in  full force and effect on and after January 18, 2009 with
    52  respect to claims and appeals filed for health care services provided at
    53  facilities subject to the provisions of  section  230-d  of  the  public
    54  health  law during the period of time which such facilities remain fully
    55  licensed, certified or accredited pursuant to such section.
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