Amd §4406-c, Pub Health L; amd §§3217-b & 4325, Ins L
Relates to certain prohibitions in contracts or agreements by health maintenance organizations; prohibits clauses which entitle reimbursement at the lowest price or rate; prohibits contracts which restrict referral of patients based solely upon a health care provider's status with a managed care product; prohibits contracts which allow for the substitution of a pharmaceutical drug or agent by any person other than the prescribing health care professional.
STATE OF NEW YORK
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5527
2025-2026 Regular Sessions
IN SENATE
February 24, 2025
___________
Introduced by Sens. SANDERS, MAY -- read twice and ordered printed, and
when printed to be committed to the Committee on Health
AN ACT to amend the public health law and the insurance law, in relation
to certain contracts or agreements by health maintenance organizations
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 7 of section 4406-c of the public health law,
2 as added by chapter 705 of the laws of 1996 and as renumbered by chapter
3 487 of the laws of 2010, is renumbered subdivision 17 and three new
4 subdivisions 14, 15 and 16 are added to read as follows:
5 14. No contract or agreement between a health care plan and a health
6 care provider shall contain any clause which entitles such health care
7 plan to reimburse the health care provider at the lowest price or rate
8 that such health care provider has charged another person or entity for
9 rendering the same treatment or performing the same procedure.
10 15. No health care plan shall by contract, written policy or written
11 procedure prohibit any health care provider from referring a patient or
12 enrollee to a health care provider based solely upon such health care
13 provider's participation status with the managed care product subscribed
14 to by the patient or enrollee.
15 16. No health care plan shall by contract, written policy or procedure
16 provide for or allow the substitution of a pharmaceutical drug or agent
17 (other than a generic substitution) by any person other than the
18 prescribing health care professional or by a pharmacist under section
19 sixty-eight hundred one-a of the education law.
20 § 2. Subsection (h) of section 3217-b of the insurance law, as added
21 by chapter 705 of the laws of 1996 and as relettered by chapter 237 of
22 the laws of 2009, is relettered subsection (r) and three new subsections
23 (h), (p) and (q) are added to read as follows:
24 (h) No contract or agreement between an insurer and a health care
25 provider shall contain any clause which entitles such insurer to reim-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10130-01-5
S. 5527 2
1 burse the health care provider at the lowest price or rate that such
2 health care provider has charged another person or entity for rendering
3 the same treatment or performing the same procedure.
4 (p) No insurer shall by contract, written policy or written procedure
5 prohibit any health care provider from referring an insured to a physi-
6 cian based solely upon such physician's participation status with the
7 insurance product subscribed to by the insured.
8 (q) No insurer which maintains a drug formulary, or which contracts
9 with another entity to maintain a drug formulary, shall by contract,
10 written policy or procedure provide for or allow the substitution of a
11 pharmaceutical drug or agent (other than a generic substitution) by any
12 person other than the prescribing health care professional or by a phar-
13 macist under section sixty-eight hundred one-a of the education law.
14 § 3. Subsection (i) of section 4325 of the insurance law, as added by
15 chapter 705 of the laws of 1996 and as relettered by chapter 487 of the
16 laws of 2010, is relettered subsection (r) and three new subsections
17 (i), (p) and (q) are added to read as follows:
18 (i) No contract or agreement between an insurer and a health care
19 provider shall contain any clause which entitles such insurer to reim-
20 burse the health care provider at the lowest price or rate that such
21 health care provider has charged another person or entity for rendering
22 the same treatment or performing the same procedure.
23 (p) No insurer shall by contract, written policy or written procedure
24 prohibit any health care provider from referring an insured to a physi-
25 cian based solely upon such physician's participation status with the
26 insurance product subscribed to by the insured.
27 (q) No insurer which maintains a drug formulary, or which contracts
28 with another entity to maintain a drug formulary, shall by contract,
29 written policy or procedure provide for or allow the substitution of a
30 pharmaceutical drug or agent (other than a generic substitution) by any
31 person other than the prescribing health care professional or by a phar-
32 macist under section sixty-eight hundred one-a of the education law.
33 § 4. This act shall take effect on the one hundred eightieth day after
34 it shall have become a law.
