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: A336A
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 bene-
fit plans by physicians.
SUMMARY OF SPECIFIC PROVISIONS: Section 1 is a statement of legisla-
tive 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 negotiating the terms of contracts with
health care providers. The legislative intent clarifies that the act is
not intended to apply or affect collective bargaining relationships
involving health care providers who are employees of health care provid-
ers 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
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 (GHI/HIP, 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:
4301-B (Canastrari) - Reported to Ways and Means 2011-2012: 2474-B
(Canastrari) - Reported to Ways and Means 2013-2014: 5692 - Reported to
Ways and Means
FISCAL IMPLICATIONS: None to the State. The bill would provide the
legal basis for an appropriation of funds to implement the provisions of
EFFECTIVE DATE: 120 days after it shall have become a law, provided
that the department of health may promulgate and establish any regu-
lations pursuant hereto prior to the effective date.
STATE OF NEW YORK
2015-2016 Regular Sessions
January 7, 2015
Introduced by M. of A. GOTTFRIED, CAHILL, COLTON, MAGNARELLI, GALEF,
PAULIN, SCHIMEL, LIFTON, CUSICK, O'DONNELL, JAFFEE, PERRY, RUSSELL,
MARKEY, BRONSON, ROSENTHAL, LAVINE, THIELE, BENEDETTO, TITONE,
PEOPLES-STOKES, GUNTHER, WEPRIN, ABINANTI, ENGLEBRIGHT, ROBERTS,
BROOK-KRASNY, ROBINSON, SKOUFIS, OTIS, AUBRY, WRIGHT, STIRPE, BORELLI,
CRESPO, STECK, CLARK -- Multi-Sponsored by -- M. of A. ABBATE, ARROYO,
BRAUNSTEIN, BRENNAN, BUCHWALD, COOK, CYMBROWITZ, DINOWITZ, FAHY,
GLICK, HIKIND, HOOPER, LENTOL, LOPEZ, LUPARDO, LUPINACCI, MAGEE,
MALLIOTAKIS, McDONALD, MONTESANO, MOYA, ORTIZ, PRETLOW, RAIA, SEPULVE-
DA, WEINSTEIN -- read once and referred to the Committee on Health --
reported and referred to the Committee on Ways and Means -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the public health law, in relation to requirements for
collective negotiations by health care providers with certain health
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Statement of legislative intent. The legislature finds that
2 collective negotiation by competing health care providers for the terms
3 and conditions of contracts with health plans can result in beneficial
4 results for health care consumers. The legislature further finds
5 instances where health plans dominate the market to such a degree that
6 fair and adequate negotiations between health care providers and the
7 plans are adversely affected, so that it is necessary and appropriate to
8 provide for a system of collective action on behalf of health care
9 providers. Consequently, the legislature finds it appropriate and neces-
10 sary to displace competition with regulation of health plan-provider
11 agreements and authorize collective negotiations on the terms and condi-
12 tions of the relationship between health care plans and health care
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 336--A 2
1 providers so the imbalances between the two will not result in adverse
2 conditions of health care. This act is not intended to apply to or
3 affect in any respect collective bargaining relationships which arise
4 under applicable federal or state collective bargaining statutes.
5 § 2. This act shall be known and may be cited as the "health care
6 consumer and provider protection act".
7 § 3. Article 49 of the public health law is amended by adding a new
8 title III to read as follows:
9 TITLE III
10 COLLECTIVE NEGOTIATIONS BY HEALTH CARE
11 PROVIDERS WITH HEALTH CARE PLANS
12 Section 4920. Definitions.
13 4921. Non-fee related collective negotiation authorized.
14 4922. Fee related collective negotiation.
15 4923. Collective negotiation requirements.
16 4924. Requirements for health care providers' representative.
17 4925. Certain collective action prohibited.
18 4926. Fees.
19 4927. Monitoring of agreements.
20 4928. Confidentiality.
21 4929. Severability and construction.
22 § 4920. Definitions. For purposes of this title:
23 1. "Health care plan" means an entity (other than a health care
24 provider) that approves, provides, arranges for, or pays for health care
25 services, including but not limited to:
26 (a) a health maintenance organization licensed pursuant to article
27 forty-three of the insurance law or certified pursuant to article
28 forty-four of this chapter;
29 (b) any other organization certified pursuant to article forty-four of
30 this chapter; or
31 (c) an insurer or corporation subject to the insurance law.
32 2. "Person" means an individual, association, corporation, or any
33 other legal entity.
34 3. "Health care providers' representative" means a third party who is
35 authorized by health care providers to negotiate on their behalf with
36 health care plans over contractual terms and conditions affecting those
37 health care providers.
38 4. "Strike" means a work stoppage in part or in whole, direct or indi-
39 rect, by a health care provider or health care providers to gain compli-
40 ance with demands made on a health care plan.
41 5. "Substantial market share in a business line" exists if a health
42 care plan's market share of a business line within the geographic area
43 for which a negotiation has been approved by the commissioner, alone or
44 in combination with the market shares of affiliates, exceeds either ten
45 percent of the total number of covered lives in that service area for
46 such business line or twenty-five thousand lives, or if the commissioner
47 determines the market share of the insurer in the relevant insurance
48 product and geographic markets for the services of the providers seeking
49 to collectively negotiate significantly exceeds the countervailing
50 market share of the providers acting individually.
51 6. "Health care provider" means a person who is licensed, certified,
52 registered or authorized pursuant to title eight of the education law
53 and who practices that profession as a health care provider as an inde-
54 pendent contractor and/or who is an owner, officer, shareholder, or
55 proprietor of a health care provider, or an entity that employs or
56 utilizes health care providers to provide health care services, includ-
A. 336--A 3
1 ing but not limited to a hospital licensed under article twenty-eight of
2 this chapter or an accountable care organization under article twenty-
3 nine-E of this chapter. A health care provider under title eight of the
4 education law who practices as an employee of a health care provider
5 shall not be deemed a health care provider for purposes of this title.
6 § 4921. Non-fee related collective negotiation authorized. 1. Health
7 care providers practicing within the geographic area for which a negoti-
8 ation has been approved by the commissioner may meet and communicate for
9 the purpose of collectively negotiating the following terms and condi-
10 tions of provider contracts with the health care plan:
11 (a) the details of the utilization review plan as defined pursuant to
12 subdivision ten of section forty-nine hundred of this article and
13 subsection (j) of section four thousand nine hundred of the insurance
15 (b) coverage provisions; health care benefits; benefit maximums,
16 including benefit limitations; and exclusions of coverage;
17 (c) the definition of medical necessity;
18 (d) the clinical practice guidelines used to make medical necessity
19 and utilization review determinations;
20 (e) preventive care and other medical management practices;
21 (f) drug formularies and standards and procedures for prescribing
22 off-formulary drugs;
23 (g) respective physician liability for the treatment or lack of treat-
24 ment of covered persons;
25 (h) the details of health care plan risk transfer arrangements with
27 (i) plan administrative procedures, including methods and timing of
28 health care provider payment for services;
29 (j) procedures to be utilized to resolve disputes between the health
30 care plan and health care providers;
31 (k) patient referral procedures including, but not limited to, those
32 applicable to out-of-network referrals;
33 (l) the formulation and application of health care provider reimburse-
34 ment procedures;
35 (m) quality assurance programs;
36 (n) the process for rendering utilization review determinations
37 including: establishment of a process for rendering utilization review
38 determinations which shall, at a minimum, include: written procedures to
39 assure that utilization reviews and determinations are conducted within
40 the timeframes established in this article; procedures to notify an
41 enrollee, an enrollee's designee and/or an enrollee's health care
42 provider of adverse determinations; and procedures for appeal of adverse
43 determinations, including the establishment of an expedited appeals
44 process for denials of continued inpatient care or where there is immi-
45 nent or serious threat to the health of the enrollee; and
46 (o) health care provider selection and termination criteria used by
47 the health care plan.
48 2. Nothing in this section shall be construed to allow or authorize an
49 alteration of the terms of the internal and external review procedures
50 set forth in law.
51 3. Nothing in this section shall be construed to allow a strike of a
52 health care plan by health care providers or plans as otherwise set
53 forth in the laws of this state.
54 4. Nothing in this section shall be construed to allow or authorize
55 terms or conditions which would impede the ability of a health care plan
A. 336--A 4
1 to obtain or retain accreditation by the national committee for quality
2 assurance or a similar body.
3 § 4922. Fee related collective negotiation. 1. If the health care plan
4 has substantial market share in a business line in any geographic area
5 for which a negotiation has been approved by the commissioner, health
6 care providers practicing within that geographic area may collectively
7 negotiate the following terms and conditions relating to that business
8 line with the health care plan:
9 (a) the fees assessed by the health care plan for services, including
10 fees established through the application of reimbursement procedures;
11 (b) the conversion factors used by the health care plan in a
12 resource-based relative value scale reimbursement methodology or other
13 similar methodology; provided the same are not otherwise established by
14 state or federal law or regulation;
15 (c) the amount of any discount granted by the health care plan on the
16 fee of health care services to be rendered by health care providers;
17 (d) the dollar amount of capitation or fixed payment for health
18 services rendered by health care providers to health care plan enrol-
20 (e) the procedure code or other description of a health care service
21 covered by a payment and the appropriate grouping of the procedure
22 codes; or
23 (f) the amount of any other component of the reimbursement methodology
24 for a health care service.
25 2. Nothing herein shall be deemed to affect or limit the right of a
26 health care provider or group of health care providers to collectively
27 petition a government entity for a change in a law, rule, or regulation.
28 § 4923. Collective negotiation requirements. 1. Collective negotiation
29 rights granted by this title must conform to the following requirements:
30 (a) health care providers may communicate with other health care
31 providers regarding the contractual terms and conditions to be negoti-
32 ated with a health care plan;
33 (b) health care providers may communicate with health care providers'
35 (c) a health care providers' representative is the only party author-
36 ized to negotiate with health care plans on behalf of the health care
37 providers as a group;
38 (d) a health care provider can be bound by the terms and conditions
39 negotiated by the health care providers' representatives; and
40 (e) in communicating or negotiating with the health care providers'
41 representative, a health care plan is entitled to contract with or offer
42 different contract terms and conditions to individual competing health
43 care providers.
44 2. A health care providers' representative may not represent more than
45 thirty percent of the market of health care providers or of a particular
46 health care provider type or specialty practicing in the geographic area
47 for which a negotiation has been approved by the commissioner if the
48 health care plan covers less than five percent of the actual number of
49 covered lives of the health care plan in the area, as determined by the
51 3. Nothing in this section shall be construed to prohibit collective
52 action on the part of any health care provider who is a member of a
53 collective bargaining unit recognized pursuant to the national labor
54 relations act.
55 § 4924. Requirements for health care providers' representative. 1.
56 Before engaging in collective negotiations with a health care plan on
A. 336--A 5
1 behalf of health care providers, a health care providers' representative
2 shall file with the commissioner, in the manner prescribed by the
3 commissioner, information identifying the representative, the represen-
4 tative's plan of operation, and the representative's procedures to
5 ensure compliance with this title.
6 2. Before engaging in the collective negotiations, the health care
7 providers' representative shall also submit to the commissioner for the
8 commissioner's approval a report identifying the proposed subject matter
9 of the negotiations or discussions with the health care plan and the
10 efficiencies or benefits expected to be achieved through the negoti-
11 ations for both the providers and consumers of health services. The
12 commissioner shall not approve the report if the commissioner, in
13 consultation with the superintendent of financial services determines
14 that the proposed negotiations would exceed the authority granted under
15 this title.
16 3. The representative shall supplement the information in the report
17 on a regular basis or as new information becomes available, indicating
18 that the subject matter of the negotiations with the health care plan
19 has changed or will change. In no event shall the report be less than
20 every thirty days.
21 4. With the advice of the superintendent of financial services and the
22 attorney general, the commissioner shall approve or disapprove the
23 report not later than the twentieth day after the date on which the
24 report is filed. If disapproved, the commissioner shall furnish a writ-
25 ten explanation of any deficiencies, along with a statement of specific
26 proposals for remedial measures to cure the deficiencies. If the commis-
27 sioner does not so act within the twenty days, the report shall be
28 deemed approved.
29 5. A person who acts as a health care providers' representative with-
30 out the approval of the commissioner under this section shall be deemed
31 to be acting outside the authority granted under this title.
32 6. Before reporting the results of negotiations with a health care
33 plan or providing to the affected health care providers an evaluation of
34 any offer made by a health care plan, the health care providers' repre-
35 sentative shall furnish for approval by the commissioner, before dissem-
36 ination to the health care providers, a copy of all communications to be
37 made to the health care providers related to negotiations, discussions,
38 and offers made by the health care plan.
39 7. A health care providers' representative shall report the end of
40 negotiations to the commissioner not later than the fourteenth day after
41 the date of a health care plan decision declining negotiation, canceling
42 negotiations, or failing to respond to a request for negotiation. In
43 such instances, a health care providers' representative may request
44 intervention from the commissioner to require the health care plan to
45 participate in the negotiation pursuant to subdivision eight of this
47 8. (a) In the event the commissioner determines that an impasse exists
48 in the negotiations, or in the event a health care plan declines to
49 negotiate, cancels negotiations or fails to respond to a request for
50 negotiation, the commissioner shall render assistance as follows:
51 (1) to assist the parties to effect a voluntary resolution of the
52 negotiations, the commissioner shall appoint a mediator from a list of
53 qualified persons maintained by the commissioner. If the mediator is
54 successful in resolving the impasse, then the health care providers'
55 representative shall proceed as set forth in this article;
A. 336--A 6
1 (2) if an impasse continues, the commissioner shall appoint a fact-
2 finding board of not more than three members from a list of qualified
3 persons maintained by the commissioner, which fact-finding board shall
4 have, in addition to the powers delegated to it by the board, the power
5 to make recommendations for the resolution of the dispute;
6 (b) The fact-finding board, acting by a majority of its members, shall
7 transmit its findings of fact and recommendations for resolution of the
8 dispute to the commissioner, and may thereafter assist the parties to
9 effect a voluntary resolution of the dispute. The fact-finding board
10 shall also share its findings of fact and recommendations with the
11 health care providers' representative and the health care plan. If with-
12 in twenty days after the submission of the findings of fact and recom-
13 mendations, the impasse continues, the commissioner shall order a resol-
14 ution to the negotiations based upon the findings of fact and
15 recommendations submitted by the fact-finding board.
16 9. Any proposed agreement between health care providers and a health
17 care plan negotiated pursuant to this title shall be submitted to the
18 commissioner for final approval. The commissioner shall approve or
19 disapprove the agreement within sixty days of such submission.
20 10. The commissioner may collect information from other persons to
21 assist in evaluating the impact of the proposed arrangement on the
22 health care marketplace. The commissioner shall collect information from
23 health plan companies and health care providers operating in the same
24 geographic area.
25 § 4925. Certain collective action prohibited. 1. This title is not
26 intended to authorize competing health care providers to act in concert
27 in response to a report issued by the health care providers' represen-
28 tative related to the representative's discussions or negotiations with
29 health care plans.
30 2. No health care providers' representative shall negotiate any agree-
31 ment that excludes, limits the participation or reimbursement of, or
32 otherwise limits the scope of services to be provided by any health care
33 provider or group of health care providers with respect to the perform-
34 ance of services that are within the health care provider's scope of
35 practice, license, registration, or certificate.
36 § 4926. Fees. Each person who acts as the representative or negotiat-
37 ing parties under this title shall pay to the department a fee to act as
38 a representative. The commissioner, by rule, shall set fees in amounts
39 deemed reasonable and necessary to cover the costs incurred by the
40 department in administering this title. Any fee collected under this
41 section shall be deposited in the state treasury to the credit of the
42 general fund/state operations - 003 for the New York state department of
43 health fund.
44 § 4927. Monitoring of agreements. The commissioner shall actively
45 monitor agreements approved under this title to ensure that the agree-
46 ment remains in compliance with the conditions of approval. Upon
47 request, a health care plan or health care provider shall provide infor-
48 mation regarding compliance. The commissioner may revoke an approval
49 upon a finding that the agreement is not in substantial compliance with
50 the terms of the application or the conditions of approval.
51 § 4928. Confidentiality. All reports and other information required to
52 be reported to the department of law under this title including informa-
53 tion obtained by the commissioner pursuant to subdivision ten of section
54 forty-nine hundred twenty-four of this title shall not be subject to
55 disclosure under article six of the public officers law or article thir-
56 ty-one of the civil practice law and rules.
A. 336--A 7
1 § 4929. Severability and construction. The provisions of this title
2 shall be severable, and if any court of competent jurisdiction declares
3 any phrase, clause, sentence or provision of this title to be invalid,
4 or its applicability to any government, agency, person or circumstance
5 is declared invalid, the remainder of this title and its relevant appli-
6 cability shall not be affected. The provisions of this title shall be
7 liberally construed to give effect to the purposes thereof.
8 § 4. This act shall take effect on the one hundred twentieth day after
9 it shall have become a law; provided that the commissioner of health is
10 authorized to promulgate any and all rules and regulations and take any
11 other measures necessary to implement this act on its effective date on
12 or before such date.