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A03659 Summary:

BILL NOA03659
 
SAME ASSAME AS S01007
 
SPONSORHunter
 
COSPNSR
 
MLTSPNSR
 
Amd §3217-b, Ins L; amd §4406, Pub Health L
 
Prohibits an insurer or health maintenance organization from including certain requirements in insurance contracts.
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A03659 Actions:

BILL NOA03659
 
01/28/2021referred to insurance
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A03659 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3659
 
SPONSOR: Hunter
  TITLE OF BILL: An act to amend the insurance law and the public health law, in relation to prohibiting certain requirements in insurance contracts   PURPOSE: The legislation would ban anti-competitive hospital contracting prac- tices that create higher health care prices for consumers and employers.   SUMMARY OF PROVISIONS: Section one amends the insurance law to prohibit health plans from entering into agreements or contracts with health care providers that require the health plan to include all members of a provider group in its network, require the health plan to place all members of a provider group in the same network tier, require the health plan to include all members of a provider group in all of its-products, forbid health plans from using benefit design to encourage consumers to seek services from higher-value health care providers; contain most-favored-nation provisions in which the provider will not give an equal or more favora- ble price to any other plan; or limit the ability of the health plans or provider from disclosing fees for services or the allowed amounts. Such provisions in existing-contracts would become null and void effective January 1, 2021. Section two amends the public health law to prohibit health plans from entering into agreements or contracts with health care providers that require the health plan to include all members of a provider group in its network, require the health plan to place all members of a provider group in the same network tier, require the health plan to include all members of a provider group in all of its products, forbid health plans from using benefit design to encourage consumers to seek services from higher-value health care providers, contain most-favored-nation provisions in which the provider will not give an equal or more favora- ble price to any other plan, or limit the ability of the health plans or provider from disclosing fees for services or the allowed amounts. Such provisions in existing contracts would become null and void effective January 1, 2021. Section three provides the effective date.   JUSTIFICATION: According to multiple studies, the cost of health care in New York continues to exceed the national average, with increases in prices charged by provides as one of the major driver of rising health insur- ance premiums. According to the NY State Health Foundation's December 2016 report, Why are Hospital Prices Different? An Examination of New York Hospital Reimbursement, "a hospital's market leverage - its bargain power when negotiation with insurers - is a key factor in the prices a hospital can command," and "contract provisions between hospitals and insurers can hinder competition, product innovation, transparency, and cost containment strategies." To maintain access to health care for New Yorkers and support a competitive market for the industry, the report recommended barring certain contractual language from hospital/insurer contracts, and that policies could include the barring of confidentiali- ty language, anti-steering language, and language that hinders the abil- ity of the tiered network product to work efficiently. This legislation builds upon the Foundation's recommendations and seeks to improve affordability for employers and consumers by prohibiting restrictive contracting language that create artificial barriers to promoting greater competition in the marketplace, increasing transparen- cy of health care costs, and providing more affordable options for employers and consumers. As an example, "all-or-nothing" contracts require that if a health plan wants a contract with any provider or affiliate in a particular provider organization, it must contract with all providers in the system. Provid- er organizations use this type of provision to leverage the status of their must-have providers to demand high payment rates for the entire provider organization, including those providers in more competitive areas and specialties. Similarly, restrictive contract provisions some- times require that a health plan place all physicians, hospitals, and other facilities associated with the dominant provider system in the most favorable tier of providers. This legislation provides an equita- ble balance for hospitals contracting with health plans and employer groups, by allowing for competition, fair negotiations, and ensure consumers benefits. The legislation would help address the issue of pricing fairness and access to affordable health care in the state as well as help ensure that New Yorkers are not subjected to unfair busi- ness practices that increase health insurance premiums.   LEGISLATIVE HISTORY: 2020: A.9781   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect January 1, 2022.
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A03659 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3659
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 28, 2021
                                       ___________
 
        Introduced by M. of A. HUNTER -- read once and referred to the Committee
          on Insurance
 
        AN ACT to amend the insurance law and the public health law, in relation
          to prohibiting certain requirements in insurance contracts
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 3217-b of the insurance law is amended by adding  a
     2  new subsection (m) to read as follows:
     3    (m)(1)  No  insurer that offers a managed care product or a comprehen-
     4  sive policy that utilizes a network of  providers  shall  enter  into  a
     5  contract, written policy, written procedure or agreement with any health
     6  care provider that:
     7    (A)  Requires  an  insurer to include all members of a provider group,
     8  including medical practice groups and  facilities,  in  its  network  of
     9  participating providers;
    10    (B)  Requires  an  insurer  to  place all members of a provider group,
    11  including medical practice groups and facilities, in  the  same  network
    12  tier;
    13    (C)  Requires  an  insurer to include all members of a provider group,
    14  including medical  practice  groups  and  facilities,  in  all  products
    15  offered by the insurer;
    16    (D) Prohibits insurers from using benefit designs to encourage members
    17  to seek services from higher-value health care providers;
    18    (E) Contains a most-favored-nation provision; provided, however, noth-
    19  ing  in this section shall be construed to prohibit a health insurer and
    20  a provider from negotiating payment rates and performance-based contract
    21  terms that would result in the insurer  receiving  a  rate  that  is  as
    22  favorable, or more favorable, than the rates negotiated between a health
    23  care provider and another entity; and

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04975-01-1

        A. 3659                             2
 
     1    (F)  Limits  the  ability  of the insurer or health care provider from
     2  disclosing fees for services or the allowed amounts  to  an  insured  or
     3  insured's health care provider.
     4    (2)  After January first, two thousand twenty-two, any contract, writ-
     5  ten policy, written  procedure  or  agreement  that  contains  a  clause
     6  contrary  to  the provisions set forth in this section shall be null and
     7  void; provided, however, the remaining clauses  of  the  contract  shall
     8  remain in effect for the duration of the contract term.
     9    §  2. Section 4406 of the public health law is amended by adding a new
    10  subdivision 6 to read as follows:
    11    6. (a) No health maintenance organization that offers a  managed  care
    12  product  or  a comprehensive policy that utilizes a network of providers
    13  shall enter into a contract, written policy, written procedure or agree-
    14  ment with any health care provider that:
    15    (i) Requires an insurer to include all members of  a  provider  group,
    16  including  medical  practice  groups  and  facilities, in its network of
    17  participating providers;
    18    (ii) Requires an insurer to place all members  of  a  provider  group,
    19  including  medical  practice  groups and facilities, in the same network
    20  tier;
    21    (iii) Requires an insurer to include all members of a provider  group,
    22  including  medical  practice  groups  and  facilities,  in  all products
    23  offered by the insurer;
    24    (iv) Prohibits  insurers  from  using  benefit  designs  to  encourage
    25  members to seek services from higher-value health care providers;
    26    (v) Contains a most-favored-nation provision; provided, however, noth-
    27  ing  in this section shall be construed to prohibit a health insurer and
    28  a provider from negotiating payment rates and performance-based contract
    29  terms that would result in the insurer  receiving  a  rate  that  is  as
    30  favorable, or more favorable, than the rates negotiated between a health
    31  care provider and another entity; and
    32    (vi)  Limits  the  ability of the insurer or health care provider from
    33  disclosing fees for services or the allowed amounts  to  an  insured  or
    34  insured's health care provider.
    35    (b)  After January first, two thousand twenty-two, any contract, writ-
    36  ten policy, written  procedure  or  agreement  that  contains  a  clause
    37  contrary  to  the provisions set forth in this section shall be null and
    38  void; provided, however, the remaining clauses  of  the  contract  shall
    39  remain in effect for the duration of the contract term.
    40    § 3. This act shall take effect January 1, 2022.
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