S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1631

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by M. of A. ZEBROWSKI, EDDINGTON -- Multi-Sponsored by -- M.
  of A. HOOPER, HYER-SPENCER,  PHEFFER,  WEISENBERG  --  read  once  and
  referred to the Committee on Judiciary

AN  ACT  to amend the general obligations law and the public health law,
  in relation to imposing liability on insurers for failure  to  approve
  coverage for inpatient mental health treatment

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The general obligations law is amended by  adding  two  new
sections 11-108 and 11-109 to read as follows:
  S 11-108. ACCOUNTABILITY OF HEALTH CARE ORGANIZATIONS. 1. DEFINITIONS.
FOR  PURPOSES  OF  THIS SECTION AND SECTION 11-109 OF THIS TITLE, UNLESS
THE CONTEXT CLEARLY REQUIRES OTHERWISE:
  (A) "HEALTH CARE ORGANIZATION" MEANS AN ENTITY, OTHER  THAN  A  HEALTH
CARE PROVIDER, THAT APPROVES, PROVIDES, ARRANGES FOR, OR PAYS FOR HEALTH
CARE SERVICES, INCLUDING BUT NOT LIMITED TO:
  (I)  A  HEALTH  MAINTENANCE  ORGANIZATION LICENSED PURSUANT TO ARTICLE
FORTY-THREE OF THE  INSURANCE  LAW  OR  CERTIFIED  PURSUANT  TO  ARTICLE
FORTY-FOUR OF THE PUBLIC HEALTH LAW,
  (II)  ANY  OTHER ORGANIZATION CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR
OF THE PUBLIC HEALTH LAW, OR
  (III) AN ACCIDENT OR  HEALTH  INSURANCE  CORPORATION  SUBJECT  TO  THE
INSURANCE LAW.
  NO  ENTITY  OR PERSON SHALL BE DEEMED TO BE A HEALTH CARE ORGANIZATION
BECAUSE THE ENTITY OR  PERSON  PROCURES  OR  PAYS  FOR  HEALTH  COVERAGE
THROUGH  AN  ENTITY ACTING UNDER THE INSURANCE LAW OR ARTICLE FORTY-FOUR
OF THE PUBLIC HEALTH LAW.
  (B) "HEALTH CARE PROVIDER" MEANS AN ENTITY LICENSED OR CERTIFIED UNDER
ARTICLE TWENTY-EIGHT OR THIRTY-SIX OF THE PUBLIC HEALTH LAW, A PREFERRED
PROVIDER ORGANIZATION, A PARTICIPATING ENTITY  THROUGH  WHICH  A  HEALTH

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

                                                           LBD02144-01-9

A. 1631                             2

MAINTENANCE ORGANIZATION OFFERS HEALTH SERVICES UNDER ARTICLE FORTY-FOUR
OF  THE PUBLIC HEALTH LAW, AN ENTITY LICENSED OR CERTIFIED UNDER ARTICLE
SIXTEEN, THIRTY-ONE OR THIRTY-TWO OF THE MENTAL HYGIENE  LAW,  A  HEALTH
CARE PRACTITIONER LICENSED, REGISTERED OR CERTIFIED UNDER TITLE EIGHT OF
THE  EDUCATION LAW, OR A PROVIDER OF PHARMACEUTICAL PRODUCTS OR SERVICES
OR DURABLE MEDICAL EQUIPMENT.
  2. (A) WHENEVER A HEALTH CARE ORGANIZATION OR HEALTH INSURER FAILS  OR
REFUSES  TO  APPROVE,  PROVIDE,  ARRANGE  FOR,  OR  PAY FOR, IN A TIMELY
MANNER, THE ADMISSION OF A COVERED PERSON TO A MENTAL HEALTH CARE FACIL-
ITY WHERE SUCH ADMISSION IS RECOMMENDED BY A  HEALTH  CARE  PROFESSIONAL
WHO  IS PROVIDING TREATMENT TO SUCH PERSON, TO THE EXTENT IT IS CONTRAC-
TUALLY OR LEGALLY OBLIGATED TO  DO  SO,  IT  SHALL  BE  LIABLE  FOR  ANY
PERSONAL  INJURY, DEATH OR DAMAGES TO ANY PERSON WHICH ARE CAUSED BY THE
DELAY, FAILURE OR REFUSAL.
  (B) A HEALTH CARE ORGANIZATION SHALL BE  LIABLE  UNDER  THIS  SECTION,
UNDER OTHERWISE APPLICABLE RULES OF TORT AND CONTRACT LIABILITY, INCLUD-
ING  BUT  NOT  LIMITED TO RULES RELATING TO AGENCY, VICARIOUS LIABILITY,
AND JOINT AND SEVERAL LIABILITY, FOR ANY ACT BY  AN  AGENT,  CONTRACTOR,
PARTICIPATING ENTITY, OR HEALTH CARE PROVIDER, FOR WHICH THE HEALTH CARE
ORGANIZATION  WOULD  BE  LIABLE  IF IT WERE COMMITTED BY THE HEALTH CARE
ORGANIZATION.
  3. THE FAILURE OF THE PERSON, OR OF ANY OTHER  PERSON  ACTING  ON  THE
PERSON'S  BEHALF,  TO  SEEK AN ALTERNATIVE PROVIDER OF OR TO PAY FOR THE
HEALTH CARE SERVICE SHALL NOT DIMINISH THE  HEALTH  CARE  ORGANIZATION'S
LIABILITY  OR  CONSTITUTE  CULPABLE  CONDUCT FOR THE PURPOSES OF SECTION
FOURTEEN HUNDRED ELEVEN OF THE CIVIL PRACTICE LAW AND RULES.
  4. NOTHING IN THIS SECTION SHALL LIMIT  ANY  OTHER  RIGHT,  REMEDY  OR
CAUSE OF ACTION THAT ANY PERSON MAY OTHERWISE HAVE.
  5.  NO  CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE ORGANIZATION AND A
HEALTH CARE PROVIDER SHALL:
  (A) DIRECTLY OR INDIRECTLY REQUIRE A HEALTH CARE PROVIDER TO INDEMNIFY
OR HOLD HARMLESS THE HEALTH CARE ORGANIZATION FOR ANY LIABILITY  RESULT-
ING FROM THE HEALTH CARE ORGANIZATION'S ACTS OR OMISSIONS; OR
  (B)  WAIVE, LIMIT, OR DELEGATE THE LIABILITY OF THE HEALTH CARE ORGAN-
IZATION UNDER THIS SECTION TO ANY HEALTH CARE PROVIDER.
  6. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE ORGANIZATION AND ANY
PERSON SHALL WAIVE OR LIMIT ANY LIABILITY OF THE HEALTH  CARE  ORGANIZA-
TION UNDER THIS SECTION TO THE PERSON.
  7. IF THE TIME IN WHICH A PLAINTIFF COULD HAVE COMMENCED AN ACTION FOR
PROFESSIONAL  MALPRACTICE  FOR  THE ACT, ERROR OR OMISSION COMPLAINED OF
HAS EXPIRED PRIOR TO THE COMMENCEMENT OF AN ACTION BROUGHT  PURSUANT  TO
THIS  SECTION  AGAINST A HEALTH CARE ORGANIZATION, THE DEFENDANT IN SAID
ACTION SHALL BE BARRED FROM COMMENCING A THIRD-PARTY  ACTION  AGAINST  A
PERSON  NOT A PARTY WHO IS OR MAY BE LIABLE TO THAT DEFENDANT FOR ALL OR
PART OF THE PLAINTIFF'S CLAIM AGAINST THE DEFENDANT AND AGAINST WHOM THE
PLAINTIFF CANNOT COMMENCE AN ACTION FOR PROFESSIONAL MALPRACTICE DUE  TO
THE  EXPIRATION  OF THE STATUTE OF LIMITATIONS PRIOR TO THE COMMENCEMENT
OF THE ACTION AGAINST THE DEFENDANT.
  8. A HEALTH CARE ORGANIZATION SHALL EXERCISE REASONABLE CARE:
  (A) WHEN MAKING DECISIONS WHICH AFFECT THE MENTAL HEALTH  CARE  OF  AN
ENROLLEE; AND
  (B)  IN SELECTING AND EXERCISING INFLUENCE OR CONTROL OVER ITS EMPLOY-
EES, AGENTS, OSTENSIBLE AGENTS, OR REPRESENTATIVES WHO ARE ACTING ON ITS
BEHALF, RESPECTING DECISIONS WHICH MAY AFFECT THE QUALITY OF THE  MENTAL
HEALTH CARE SERVICE PROVIDED TO ITS ENROLLEES.

A. 1631                             3

  9.  THIS SECTION SHALL NOT BE CONSTRUED TO DIMINISH ANY CONTRACTUAL OR
LEGAL OBLIGATION OF THE HEALTH CARE ORGANIZATION, NOR TO CREATE AN OBLI-
GATION ON THE PART OF THE HEALTH CARE ORGANIZATION TO PROVIDE ANY  INPA-
TIENT  MENTAL  HEALTH  CARE SERVICE TO AN ENROLLEE THAT IS NOT A COVERED
BENEFIT.
  S  11-109.  PROTECTION  OF  HEALTH  CARE  PROVIDERS. 1. NO HEALTH CARE
ORGANIZATION OR HEALTH CARE  PROVIDER  SHALL,  BY  CONTRACT,  POLICY  OR
PROCEDURE:
  (A)  PROHIBIT  OR  RESTRICT  ANY  HEALTH  CARE  PROVIDER FROM FILING A
COMPLAINT;
  (B) PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM MAKING A REPORT
OR COMMENTING TO THE APPROPRIATE GOVERNMENT AGENCY REGARDING  THE  POLI-
CIES  OR  PRACTICES  OF THE ORGANIZATION WHICH MAY NEGATIVELY AFFECT THE
QUALITY OF OR ACCESS TO HEALTH CARE SERVICES; OR
  (C) PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM  DISCLOSING  OR
COMMENTING  ON POLICIES OR PRACTICES OF THE ORGANIZATION WHICH MAY NEGA-
TIVELY AFFECT THE QUALITY OF OR ACCESS TO HEALTH CARE  SERVICES  TO  THE
PUBLIC.
  THIS  SUBDIVISION  SHALL  NOT  BE  CONSTRUED  TO  PERMIT A HEALTH CARE
PROVIDER TO DISCLOSE ANY INFORMATION REGARDING  A  PATIENT  WHICH  WOULD
OTHERWISE  BE  DEEMED CONFIDENTIAL OR PRIVILEGED, OR WHICH SHOULD NOT BE
DISCLOSED OR DISCUSSED ACCORDING TO LAW OR REASONABLE PROFESSIONAL STAN-
DARDS.
  2. NO HEALTH CARE ORGANIZATION OR HEALTH CARE PROVIDER SHALL TERMINATE
A CONTRACT OR EMPLOYMENT OF A HEALTH CARE PROVIDER, OR REFUSE  TO  RENEW
SUCH  A  CONTRACT, OR PENALIZE A HEALTH CARE PROVIDER OR REDUCE OR LIMIT
THE COMPENSATION OF A HEALTH CARE PROVIDER SOLELY BECAUSE A HEALTH  CARE
PROVIDER HAS:
  (A)  ADVOCATED FOR, RECOMMENDED OR PROVIDED MENTAL HEALTH CARE SERVICE
TO A PATIENT, TO WHICH THE PATIENT WAS ENTITLED BY CONTRACT OR LAW;
  (B) TAKEN ANY ACTION UNDER SUBDIVISION ONE OF THIS SECTION;
  (C) APPEALED OR ASSISTED IN APPEALING A DECISION OF  THE  HEALTH  CARE
ORGANIZATION  RELATING  TO THE PROVISION OF MENTAL HEALTH CARE SERVICES;
OR
  (D) REQUESTED A HEARING OR REVIEW TO WHICH THE PROVIDER WAS ENTITLED.
  3. NO HEALTH CARE ORGANIZATION OR HEALTH CARE PROVIDER SHALL APPLY ANY
INCENTIVE, WHETHER MONETARY OR OTHERWISE,  TO  A  HEALTH  CARE  PROVIDER
INTENDED  OR  HAVING  THE EFFECT OF INDUCING THE HEALTH CARE PROVIDER TO
DELAY, FAIL OR REFUSE  TO  PROVIDE  ANY  INPATIENT  MENTAL  HEALTH  CARE
SERVICE TO WHICH A PATIENT IS ENTITLED BY CONTRACT OR LAW.
  S  2. Section 4410 of the public health law is amended by adding a new
subdivision 5 to read as follows:
  5. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH MAINTENANCE  ORGANIZATION
OR  ITS  COMPREHENSIVE HEALTH SERVICES PLAN AND ANY HEALTH CARE PROVIDER
SHALL DELEGATE THE LIABILITY OF THE HEALTH MAINTENANCE  ORGANIZATION  TO
ANY  HEALTH  CARE  PROVIDER OR SHALL REQUIRE THE HEALTH CARE PROVIDER TO
INDEMNIFY OR HOLD HARMLESS THE ORGANIZATION OR PLAN  FOR  ANY  LIABILITY
THE ORGANIZATION OR PLAN MAY INCUR PURSUANT TO THE PROVISIONS OF SECTION
11-108 OR 11-109 OF THE GENERAL OBLIGATIONS LAW.
  S  3.  This  act  shall take effect on the sixtieth day after it shall
have become a law.