S03462 Summary:

Add Art 49 Title III 4920 - 4929, Pub Health L
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.
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S03462 Committee Votes:

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S03462 Floor Votes:

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S03462 Text:

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                    February 7, 2019
        Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
          printed to be committed to the Committee on Health
        AN ACT to amend the public health law, in relation to  requirements  for
          collective  negotiations  by health care providers with certain health
          benefit plans

          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
    13  providers  so  the imbalances between the two will not result in adverse
    14  conditions of health care. This act is  not  intended  to  apply  to  or
    15  affect  in  any  respect collective bargaining relationships which arise
    16  under applicable federal or state collective bargaining statutes.
    17    § 2. This act shall be known and may be  cited  as  the  "health  care
    18  consumer and provider protection act".
    19    §  3.  Article  49 of the public health law is amended by adding a new
    20  title III to read as follows:
    21                                  TITLE III
    23                      PROVIDERS WITH HEALTH CARE PLANS
    24  Section 4920. Definitions.
    25          4921. Non-fee related collective negotiation authorized.
    26          4922. Fee related collective negotiation.
    27          4923. Collective negotiation requirements.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 3462                             2
     1          4924. Requirements for health care providers' representative.
     2          4925. Certain collective action prohibited.
     3          4926. Fees.
     4          4927. Monitoring of agreements.
     5          4928. Confidentiality.
     6          4929. Severability and construction.
     7    § 4920. Definitions. For purposes of this title:
     8    1.  "Health  care  plan"  means  an  entity  (other than a health care
     9  provider) that approves, provides, arranges for, or pays for health care
    10  services, including but not limited to:
    11    (a) a health maintenance organization  licensed  pursuant  to  article
    12  forty-three  of  the  insurance  law  or  certified  pursuant to article
    13  forty-four of this chapter;
    14    (b) any other organization certified pursuant to article forty-four of
    15  this chapter; or
    16    (c) an insurer or corporation subject to the insurance law.
    17    2. "Person" means an  individual,  association,  corporation,  or  any
    18  other legal entity.
    19    3.  "Health care providers' representative" means a third party who is
    20  authorized by health care providers to negotiate on  their  behalf  with
    21  health  care plans over contractual terms and conditions affecting those
    22  health care providers.
    23    4. "Strike" means a work stoppage in part or in whole, direct or indi-
    24  rect, by a health care provider or health care providers to gain compli-
    25  ance with demands made on a health care plan.
    26    5. "Substantial market share in a business line" exists  if  a  health
    27  care  plan's  market share of a business line within the geographic area
    28  for which a negotiation has been approved by the commissioner, alone  or
    29  in  combination with the market shares of affiliates, exceeds either ten
    30  percent of the total number of covered lives in that  service  area  for
    31  such business line or twenty-five thousand lives, or if the commissioner
    32  determines  the  market  share  of the insurer in the relevant insurance
    33  product and geographic markets for the services of the providers seeking
    34  to  collectively  negotiate  significantly  exceeds  the  countervailing
    35  market share of the providers acting individually.
    36    6.  "Health  care provider" means a person who is licensed, certified,
    37  registered or authorized pursuant to title eight of  the  education  law
    38  and  who practices that profession as a health care provider as an inde-
    39  pendent contractor and/or who is  an  owner,  officer,  shareholder,  or
    40  proprietor  of  a  health  care  provider,  or an entity that employs or
    41  utilizes health care providers to provide health care services,  includ-
    42  ing but not limited to a hospital licensed under article twenty-eight of
    43  this  chapter  or an accountable care organization under article twenty-
    44  nine-E of this chapter; or an entity authorized under  articles  thirty-
    45  six  or forty of this chapter; or a fiscal intermediary operating pursu-
    46  ant to section three hundred sixty-five-f of the social services law.  A
    47  health care provider under title eight of the education  law  who  prac-
    48  tices  as  an  employee  of a health care provider shall not be deemed a
    49  health care provider for purposes of this title.
    50    § 4921. Non-fee related collective negotiation authorized.  1.  Health
    51  care providers practicing within the geographic area for which a negoti-
    52  ation has been approved by the commissioner may meet and communicate for
    53  the  purpose  of collectively negotiating the following terms and condi-
    54  tions of provider contracts with the health care plan:
    55    (a) the details of the utilization review plan as defined pursuant  to
    56  subdivision  ten  of  section  forty-nine  hundred  of  this article and

        S. 3462                             3
     1  subsection (j) of section four thousand nine hundred  of  the  insurance
     2  law;
     3    (b)  coverage  provisions;  health  care  benefits;  benefit maximums,
     4  including benefit limitations; and exclusions of coverage;
     5    (c) the definition of medical necessity;
     6    (d) the clinical practice guidelines used to  make  medical  necessity
     7  and utilization review determinations;
     8    (e) preventive care and other medical management practices;
     9    (f)  drug  formularies  and  standards  and procedures for prescribing
    10  off-formulary drugs;
    11    (g) respective physician liability for the treatment or lack of treat-
    12  ment of covered persons;
    13    (h) the details of health care plan risk  transfer  arrangements  with
    14  providers;
    15    (i)  plan  administrative  procedures, including methods and timing of
    16  health care provider payment for services;
    17    (j) procedures to be utilized to resolve disputes between  the  health
    18  care plan and health care providers;
    19    (k)  patient  referral procedures including, but not limited to, those
    20  applicable to out-of-network referrals;
    21    (l) the formulation and application of health care provider reimburse-
    22  ment procedures;
    23    (m) quality assurance programs;
    24    (n)  the  process  for  rendering  utilization  review  determinations
    25  including:  establishment  of a process for rendering utilization review
    26  determinations which shall, at a minimum, include: written procedures to
    27  assure that utilization reviews and determinations are conducted  within
    28  the  timeframes  established  in  this  article; procedures to notify an
    29  enrollee, an  enrollee's  designee  and/or  an  enrollee's  health  care
    30  provider of adverse determinations; and procedures for appeal of adverse
    31  determinations,  including  the  establishment  of  an expedited appeals
    32  process for denials of continued inpatient care or where there is  immi-
    33  nent or serious threat to the health of the enrollee; and
    34    (o)  health  care  provider selection and termination criteria used by
    35  the health care plan.
    36    2. Nothing in this section shall be construed to allow or authorize an
    37  alteration of the terms of the internal and external  review  procedures
    38  set forth in law.
    39    3.  Nothing  in this section shall be construed to allow a strike of a
    40  health care plan by health care providers  or  plans  as  otherwise  set
    41  forth in the laws of this state.
    42    4.  Nothing  in  this section shall be construed to allow or authorize
    43  terms or conditions which would impede the ability of a health care plan
    44  to obtain or retain accreditation by the national committee for  quality
    45  assurance or a similar body.
    46    § 4922. Fee related collective negotiation. 1. If the health care plan
    47  has  substantial  market share in a business line in any geographic area
    48  for which a negotiation has been approved by  the  commissioner,  health
    49  care  providers  practicing within that geographic area may collectively
    50  negotiate the following terms and conditions relating to  that  business
    51  line with the health care plan:
    52    (a)  the fees assessed by the health care plan for services, including
    53  fees established through the application of reimbursement procedures;
    54    (b) the  conversion  factors  used  by  the  health  care  plan  in  a
    55  resource-based  relative  value scale reimbursement methodology or other

        S. 3462                             4
     1  similar methodology; provided the same are not otherwise established  by
     2  state or federal law or regulation;
     3    (c)  the amount of any discount granted by the health care plan on the
     4  fee of health care services to be rendered by health care providers;
     5    (d) the dollar amount  of  capitation  or  fixed  payment  for  health
     6  services  rendered  by  health care providers to health care plan enrol-
     7  lees;
     8    (e) the procedure code or other description of a health  care  service
     9  covered  by  a  payment  and  the  appropriate grouping of the procedure
    10  codes; or
    11    (f) the amount of any other component of the reimbursement methodology
    12  for a health care service.
    13    2. Nothing herein shall be deemed to affect or limit the  right  of  a
    14  health  care  provider or group of health care providers to collectively
    15  petition a government entity for a change in a law, rule, or regulation.
    16    § 4923. Collective negotiation requirements. 1. Collective negotiation
    17  rights granted by this title must conform to the following requirements:
    18    (a) health care providers  may  communicate  with  other  health  care
    19  providers  regarding  the contractual terms and conditions to be negoti-
    20  ated with a health care plan;
    21    (b) health care providers may communicate with health care  providers'
    22  representatives;
    23    (c)  a health care providers' representative is the only party author-
    24  ized to negotiate with health care plans on behalf of  the  health  care
    25  providers as a group;
    26    (d)  a  health  care provider can be bound by the terms and conditions
    27  negotiated by the health care providers' representatives; and
    28    (e) in communicating or negotiating with the  health  care  providers'
    29  representative, a health care plan is entitled to contract with or offer
    30  different  contract  terms and conditions to individual competing health
    31  care providers.
    32    2. A health care providers' representative may not represent more than
    33  thirty percent of the market of health care providers or of a particular
    34  health care provider type or specialty practicing in the geographic area
    35  for which a negotiation has been approved by  the  commissioner  if  the
    36  health  care  plan covers less than five percent of the actual number of
    37  covered lives of the health care plan in the area, as determined by  the
    38  department.
    39    3.  Nothing  in this section shall be construed to prohibit collective
    40  action on the part of any health care provider who  is  a  member  of  a
    41  collective  bargaining  unit  recognized  pursuant to the national labor
    42  relations act.
    43    § 4924. Requirements for health  care  providers'  representative.  1.
    44  Before  engaging  in  collective negotiations with a health care plan on
    45  behalf of health care providers, a health care providers' representative
    46  shall file with the  commissioner,  in  the  manner  prescribed  by  the
    47  commissioner,  information identifying the representative, the represen-
    48  tative's plan of  operation,  and  the  representative's  procedures  to
    49  ensure compliance with this title.
    50    2.  Before  engaging  in  the collective negotiations, the health care
    51  providers' representative shall also submit to the commissioner for  the
    52  commissioner's approval a report identifying the proposed subject matter
    53  of  the  negotiations  or  discussions with the health care plan and the
    54  efficiencies or benefits expected to be  achieved  through  the  negoti-
    55  ations  for  both  the  providers  and consumers of health services. The
    56  commissioner shall not  approve  the  report  if  the  commissioner,  in

        S. 3462                             5
     1  consultation  with  the  superintendent of financial services determines
     2  that the proposed negotiations would exceed the authority granted  under
     3  this title.
     4    3.  The  representative shall supplement the information in the report
     5  on a regular basis or as new information becomes  available,  indicating
     6  that  the  subject  matter of the negotiations with the health care plan
     7  has changed or will change. In no event shall the report  be  less  than
     8  every thirty days.
     9    4. With the advice of the superintendent of financial services and the
    10  attorney  general,  the  commissioner  shall  approve  or disapprove the
    11  report not later than the twentieth day after  the  date  on  which  the
    12  report  is filed. If disapproved, the commissioner shall furnish a writ-
    13  ten explanation of any deficiencies, along with a statement of  specific
    14  proposals for remedial measures to cure the deficiencies. If the commis-
    15  sioner  does  not  so  act  within  the twenty days, the report shall be
    16  deemed approved.
    17    5. A person who acts as a health care providers' representative  with-
    18  out  the approval of the commissioner under this section shall be deemed
    19  to be acting outside the authority granted under this title.
    20    6. Before reporting the results of negotiations  with  a  health  care
    21  plan or providing to the affected health care providers an evaluation of
    22  any  offer made by a health care plan, the health care providers' repre-
    23  sentative shall furnish for approval by the commissioner, before dissem-
    24  ination to the health care providers, a copy of all communications to be
    25  made to the health care providers related to negotiations,  discussions,
    26  and offers made by the health care plan.
    27    7.  A  health  care providers' representative  shall report the end of
    28  negotiations to the commissioner not later than the fourteenth day after
    29  the date of a health care plan decision declining negotiation, canceling
    30  negotiations, or failing to respond to a request for  negotiation.    In
    31  such  instances,  a  health  care  providers' representative may request
    32  intervention from the commissioner to require the health  care  plan  to
    33  participate  in  the  negotiation  pursuant to subdivision eight of this
    34  section.
    35    8. (a) In the event the commissioner determines that an impasse exists
    36  in the negotiations, or in the event a  health  care  plan  declines  to
    37  negotiate,  cancels  negotiations  or  fails to respond to a request for
    38  negotiation, the commissioner shall render assistance as follows:
    39    (1) to assist the parties to effect  a  voluntary  resolution  of  the
    40  negotiations,  the  commissioner shall appoint a mediator from a list of
    41  qualified persons maintained by the commissioner.  If  the  mediator  is
    42  successful  in  resolving  the  impasse, then the health care providers'
    43  representative shall proceed as set forth in this article;
    44    (2) if an impasse continues, the commissioner shall  appoint  a  fact-
    45  finding  board  of  not more than three members from a list of qualified
    46  persons maintained by the commissioner, which fact-finding  board  shall
    47  have,  in addition to the powers delegated to it by the board, the power
    48  to make recommendations for the resolution of the dispute;
    49    (b) The fact-finding board, acting by a majority of its members, shall
    50  transmit its findings of fact and recommendations for resolution of  the
    51  dispute  to  the  commissioner, and may thereafter assist the parties to
    52  effect a voluntary resolution of the  dispute.  The  fact-finding  board
    53  shall  also  share  its  findings  of  fact and recommendations with the
    54  health care providers' representative and the health care plan. If with-
    55  in twenty days after the submission of the findings of fact  and  recom-
    56  mendations, the impasse continues, the commissioner shall order a resol-

        S. 3462                             6
     1  ution   to  the  negotiations  based  upon  the  findings  of  fact  and
     2  recommendations submitted by the fact-finding board.
     3    9.  Any  proposed agreement between health care providers and a health
     4  care plan negotiated pursuant to this title shall be  submitted  to  the
     5  commissioner  for  final  approval.  The  commissioner  shall approve or
     6  disapprove the agreement within sixty days of such submission.
     7    10. The commissioner may collect information  from  other  persons  to
     8  assist  in  evaluating  the  impact  of  the proposed arrangement on the
     9  health care marketplace. The commissioner shall collect information from
    10  health plan companies and health care providers operating  in  the  same
    11  geographic area.
    12    §  4925.  Certain  collective  action prohibited. 1. This title is not
    13  intended to authorize competing health care providers to act in  concert
    14  in  response  to a report issued by the health care providers' represen-
    15  tative related to the representative's discussions or negotiations  with
    16  health care plans.
    17    2. No health care providers' representative shall negotiate any agree-
    18  ment  that  excludes,  limits  the participation or reimbursement of, or
    19  otherwise limits the scope of services to be provided by any health care
    20  provider or group of health care providers with respect to the  perform-
    21  ance  of  services  that  are within the health care provider's scope of
    22  practice, license, registration, or certificate.
    23    § 4926. Fees. Each person who acts as the representative or  negotiat-
    24  ing parties under this title shall pay to the department a fee to act as
    25  a  representative.  The commissioner, by rule, shall set fees in amounts
    26  deemed reasonable and necessary to  cover  the  costs  incurred  by  the
    27  department  in  administering  this  title. Any fee collected under this
    28  section shall be deposited in the state treasury to the  credit  of  the
    29  general fund/state operations - 003 for the New York state department of
    30  health fund.
    31    §  4927.  Monitoring  of  agreements.  The commissioner shall actively
    32  monitor agreements approved under this title to ensure that  the  agree-
    33  ment  remains  in  compliance  with  the  conditions  of  approval. Upon
    34  request, a health care plan or health care provider shall provide infor-
    35  mation regarding compliance. The commissioner  may  revoke  an  approval
    36  upon  a finding that the agreement is not in substantial compliance with
    37  the terms of the application or the conditions of approval.
    38    § 4928. Confidentiality. All reports and other information required to
    39  be reported to the department of law under this title including informa-
    40  tion obtained by the commissioner pursuant to subdivision ten of section
    41  forty-nine hundred twenty-four of this title shall  not  be  subject  to
    42  disclosure under article six of the public officers law or article thir-
    43  ty-one of the civil practice law and rules.
    44    §  4929.  Severability  and construction. The provisions of this title
    45  shall be severable, and if any court of competent jurisdiction  declares
    46  any  phrase,  clause, sentence or provision of this title to be invalid,
    47  or its applicability to any government, agency, person  or  circumstance
    48  is declared invalid, the remainder of this title and its relevant appli-
    49  cability  shall  not  be affected. The provisions of this title shall be
    50  liberally construed to give effect to the purposes thereof.
    51    § 4. This act shall take effect on the one hundred twentieth day after
    52  it shall have become a law; provided that the commissioner of health  is
    53  authorized  to promulgate any and all rules and regulations and take any
    54  other measures necessary to implement this act on its effective date  on
    55  or before such date.
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