NY State Senate Bill 2009-S4112

Senate Bill S4112

2009-2010 Legislative Session

Relates to certain prohibitions in contracts or agreements by health maintenance organizations

download bill text pdf

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 22, 2010	print number 4112a
Jan 22, 2010	amend and recommit to health
Jan 06, 2010	referred to health
Apr 13, 2009	referred to health

Bill Amendments

Original

A (Active)

2009-S4112 - Details

Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §4406-c, Pub Health L; amd §§3217-b & 4325, Ins L

2009-S4112 - Summary

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 disclosure of an enrollee's diagnosis on a prescription as a condition for authorizing coverage for payment or dispensing of a prescription

2009-S4112 - Sponsor Memo

                                 BILL NUMBER:  S4112

 TITLE OF BILL :
An act to amend the public health law and the insurance law, in
relation to certain contracts or agreements by health maintenance
organizations


 PURPOSE OR GENERAL IDEA OF BILL :
This legislation would prohibit or restrict a number of practices
between HMOs and Health Care Providers.

 SUMMARY OF SPECIFIC PROVISIONS :
This bill adds four new subdivisions to section 4406-c of the Public
Health Law. Subdivision 6 would prohibit the use of "mast favored
nation" clauses which arbitrarily lower reimbursement levels for the
provision of health care services.

Subdivision 7 would ban the use of contract language which restricts
the ability of a physician to make referrals to other health care
providers.

Subdivision 8 would ban contract language which mandates the provision
of a patient's diagnosis an the written prescription as a condition
for covering a prescription drug.

Subdivision 9 would prohibit insurers from mandating the substitution
of a pharmaceutical agent (other than a generic equivalent) by any
person other than the prescribing professional. The bill also makes
the same changes to section 3217-b and 4325 of the Insurance Law.

 JUSTIFICATION :
Frequently, physicians and other health care providers provide health
care to the uninsured and economically disadvantaged with very little
or no compensation. Unfortunately, managed care insurance plans have
created a disincentive to the provision of free and reduced cast care
by inserting clauses into their contracts which requires a physician,
or other health care provider, to accept reimbursement for a
treatment/procedure at the lowest amount where such provider has
charged an entity for the same treatment.  Consequently, if a
physician wishes to only charge a nominal fee in a particular
instance, that physician jeopardized his or her reimbursement for all
of his or her patients. Physicians, hospitals, and other providers
should be allowed and encouraged to provide charity care without
endangering the future of their practices.

Insurance plans should not be permitted to control the referral
process, which the treating physician uses to ensure that the patient
is seen and treated by the most appropriate medical professional. The
issue of "in-network" or "out-of-network" providers should not be
permitted to force treating physicians to refer to "in-network"
providers only.  While the plans may have different payment
arrangements for in and out-of-network providers, an outright ban an
out-of-network referrals is tantamount to a ban and the provision of
sound medical advice.

Some plans require the provision of the patient's diagnosis, on the
prescription, in order to consider coverage for the pharmaceutical
drug.  Not only is this practice a gross violation of patient privacy,
but it serves to break the bonds of confidence between the patient and
physicians and can place some patients in the awkward position of
having to choose between receiving important medications and divulging
personal health information. In addition, a growing number of
insurance plans are arbitrarily requiring the substitution of
"similar" pharmaceutical agents (as opposed to generic equivalents.)
This can be at the expense of the patient's health, as the prescribing
professional may have, in fact, chosen a certain agent because of a
particular quality or certain circumstances or symptoms surrounding
the patient's case. Only a treating professional, with full knowledge
of the patient's history, should have authority to change a patient's
medication.

 PRIOR LEGISLATIVE HISTORY :
Assembly legislation
2002: A.10543 - advanced to 3rd reading
2003-04:  A.3446 - passed assembly
2005-06: A.2204 - passed assembly
2007-08: A.4607B - passed assembly

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect 180 days after it has become law.

2009-S4112 - Bill Text download pdf

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

                                  4112

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 13, 2009
                               ___________

Introduced  by  Sen.  KLEIN  -- 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:

  Section 1. Subdivision 6 of section 4406-c of the public health law is
renumbered  subdivision  10  and four new subdivisions 6, 7, 8 and 9 are
added to read as follows:
  6. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE PLAN  AND  A  HEALTH
CARE  PROVIDER  SHALL CONTAIN ANY CLAUSE WHICH ENTITLES SUCH HEALTH CARE
PLAN TO REIMBURSE THE HEALTH CARE PROVIDER AT THE LOWEST PRICE  OR  RATE
THAT  SUCH HEALTH CARE PROVIDER HAS CHARGED ANOTHER PERSON OR ENTITY FOR
RENDERING THE SAME TREATMENT OR PERFORMING THE SAME PROCEDURE.
  7. NO HEALTH CARE PLAN SHALL BY CONTRACT, WRITTEN  POLICY  OR  WRITTEN
PROCEDURE PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM REFERRING A
PATIENT  OR  ENROLLEE  TO  A HEALTH CARE PROVIDER BASED SOLELY UPON SUCH
HEALTH CARE PROVIDER'S PARTICIPATION STATUS WITH THE MANAGED CARE  PROD-
UCT SUBSCRIBED TO BY THE PATIENT OR ENROLLEE.
  8.  NO  HEALTH  CARE PLAN SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN
PROCEDURE REQUIRE  THE  DISCLOSURE  OF  AN  ENROLLEE'S  DIAGNOSIS  ON  A
PRESCRIPTION  AS  A CONDITION FOR DISPENSING OF A PHARMACEUTICAL DRUG OR
AGENT, UNLESS OTHERWISE REQUIRED BY LAW.
  9. NO HEALTH CARE PLAN SHALL BY CONTRACT, WRITTEN POLICY OR  PROCEDURE
PROVIDE  FOR OR ALLOW THE SUBSTITUTION OF A PHARMACEUTICAL DRUG OR AGENT
(OTHER THAN A  GENERIC  SUBSTITUTION)  BY  ANY  PERSON  OTHER  THAN  THE
PRESCRIBING HEALTH CARE PROFESSIONAL.
  S  2.  Subsections (g) and (h) of section 3217-b of the insurance law,
subsection (g) as relettered by chapter 586 of the  laws  of  1998,  are
relettered  subsections  (k)  and (l) and four new subsections (g), (h),
(i) and (j) are added to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00981-01-9

S. 4112                             2

  (G) NO CONTRACT OR AGREEMENT BETWEEN AN  INSURER  AND  A  HEALTH  CARE
PROVIDER  SHALL  CONTAIN ANY CLAUSE WHICH ENTITLES SUCH INSURER TO REIM-
BURSE THE HEALTH CARE PROVIDER AT THE LOWEST PRICE  OR  RATE  THAT  SUCH
HEALTH  CARE PROVIDER HAS CHARGED ANOTHER PERSON OR ENTITY FOR RENDERING
THE SAME TREATMENT OR PERFORMING THE SAME PROCEDURE.
  (H)  NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN PROCEDURE
PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM REFERRING AN  INSURED
TO  A  PHYSICIAN BASED SOLELY UPON SUCH PHYSICIAN'S PARTICIPATION STATUS
WITH THE INSURANCE PRODUCT SUBSCRIBED TO BY THE INSURED.
  (I) NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN  PROCEDURE
REQUIRE  THE DISCLOSURE OF AN INSURED'S DIAGNOSIS ON A PRESCRIPTION AS A
CONDITION FOR AUTHORIZING THE COVERAGE FOR OR PAYMENT OR DISPENSING OF A
PHARMACEUTICAL DRUG OR AGENT, UNLESS OTHERWISE REQUIRED BY LAW.
  (J) NO INSURER WHICH MAINTAINS A DRUG FORMULARY,  OR  WHICH  CONTRACTS
WITH  ANOTHER  ENTITY  TO  MAINTAIN A DRUG FORMULARY, SHALL BY CONTRACT,
WRITTEN POLICY OR PROCEDURE PROVIDE FOR OR ALLOW THE SUBSTITUTION  OF  A
PHARMACEUTICAL  DRUG OR AGENT (OTHER THAN A GENERIC SUBSTITUTION) BY ANY
PERSON OTHER THAN THE PRESCRIBING HEALTH CARE PROFESSIONAL.
  S 3. Subsections (g) and (h) of section 4325  of  the  insurance  law,
subsection  (g)  as  relettered  by chapter 586 of the laws of 1998, are
relettered subsection (k) and (l) and four new subsections (g), (h), (i)
and (j) are added to read as follows:
  (G) NO CONTRACT OR AGREEMENT BETWEEN AN  INSURER  AND  A  HEALTH  CARE
PROVIDER  SHALL  CONTAIN ANY CLAUSE WHICH ENTITLES SUCH INSURER TO REIM-
BURSE THE HEALTH CARE PROVIDER AT THE LOWEST PRICE  OR  RATE  THAT  SUCH
HEALTH  CARE PROVIDER HAS CHARGED ANOTHER PERSON OR ENTITY FOR RENDERING
THE SAME TREATMENT OR PERFORMING THE SAME PROCEDURE.
  (H) NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN  PROCEDURE
PROHIBIT  OR RESTRICT ANY HEALTH CARE PROVIDER FROM REFERRING AN INSURED
TO A PHYSICIAN BASED SOLELY UPON SUCH PHYSICIAN'S  PARTICIPATION  STATUS
WITH THE INSURANCE PRODUCT SUBSCRIBED TO BY THE INSURED.
  (I)  NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN PROCEDURE
REQUIRE THE DISCLOSURE OF AN INSURED'S DIAGNOSIS ON A PRESCRIPTION AS  A
CONDITION FOR AUTHORIZING THE COVERAGE FOR OR PAYMENT OR DISPENSING OF A
PHARMACEUTICAL DRUG OR AGENT, UNLESS OTHERWISE REQUIRED BY LAW.
  (J)  NO  INSURER  WHICH MAINTAINS A DRUG FORMULARY, OR WHICH CONTRACTS
WITH ANOTHER ENTITY TO MAINTAIN A DRUG  FORMULARY,  SHALL  BY  CONTRACT,
WRITTEN  POLICY  OR PROCEDURE PROVIDE FOR OR ALLOW THE SUBSTITUTION OF A
PHARMACEUTICAL DRUG OR AGENT (OTHER THAN A GENERIC SUBSTITUTION) BY  ANY
PERSON OTHER THAN THE PRESCRIBING HEALTH CARE PROFESSIONAL.
  S 4. This act shall take effect on the one hundred eightieth day after
it  shall have become a law, provided that the relettering of subsection
(l) of section 3217-b and the relettering of subsection (l)  of  section
4325  of  the  insurance law made by sections two and three of this act,
respectively, shall not affect the repeal of such subsections and  shall
be deemed repealed therewith.

2009-S4112A (ACTIVE) - Details

Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §4406-c, Pub Health L; amd §§3217-b & 4325, Ins L

2009-S4112A (ACTIVE) - Summary

2009-S4112A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4112A

 TITLE OF BILL :

An act to amend the public health law and the insurance law, in
relation to certain contracts or agreements by health maintenance
organizations


 PURPOSE OR GENERAL IDEA OF BILL :

This legislation would prohibit or restrict a number of practices
between HMOS and Health Care Providers.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1: Amends public Health Law section 4406-c to add four new
subdivisions.

Subdivision 6: Prohibits the use of contract clauses which lower
reimbursement levels for the provision of health care services based
on the fact that another provider delivers the same services at a
lower rate.

Subdivision 7: Bans the use of contract language which restricts the
ability of a physician to make referrals to other health care

providers.

Subdivision 8: Bans contract language which mandates the provision of
a patient's diagnosis and the written prescription as a condition for
covering a prescription drug.

Subdivision 9: Prohibits insurers from mandating the substitution of a
pharmaceutical agent (other than a generic equivalent) by any person
other than the prescribing professional.

Section 2: Amends Insurance Law section 3217-b to add similar
provisions to the Insurance Law as are added by this bill to the
public Health Law.

Section 3: Amends Insurance Law section 4325 to add similar provisions
to the Insurance Law as are added by this bill to the Public Health
Law.

 JUSTIFICATION :

Frequently, physicians and other health care providers provide health
care to the uninsured and economically disadvantaged with very little
or no compensation. Unfortunately, managed care insurance plans have
created a disincentive to the provision of free and reduced cast care
by inserting clauses into their contracts which requires a physician,
or other health care provider, to accept reimbursement for a
treatment/procedure at the lowest amount where such provider has
charged an entity for the same treatment.  Consequently, if a
physician wishes to only charge a nominal fee in a particular
instance, that physician jeopardized his or her reimbursement for all
of his or her patients. Physicians, hospitals, and other providers
should be allowed and encouraged to provide charity care without
endangering the future of their practices.

Insurance plans should not be permitted to control the referral
process, which the treating physician uses to ensure that the patient
is seen and treated by the most appropriate medical professional. The
issue of "in-network" or "out-of-network" providers should not be
permitted to force treating physicians to refer to "in-network"
providers only.  While the plans may have different payment
arrangements for in and out-of-network providers, an outright ban an
out-of-network referrals is tantamount to a ban and the provision of
sound medical advice.

Some plans require the provision of the patient's diagnosis, on the
prescription, in order to consider coverage for the pharmaceutical
drug.  Not only is this practice a gross violation of patient privacy,
but it serves to break the bonds of confidence between the patient and
physicians and can place some patients in the awkward position of
having to choose between receiving important medications and divulging
personal health information. In addition, a growing number of
insurance plans are arbitrarily requiring the substitution of
"similar" pharmaceutical agents (as opposed to generic equivalents.)
This can be at the expense of the patient's health, as the prescribing
professional may have, in fact, chosen a certain agent because of a
particular quality or certain circumstances or symptoms surrounding
the patient's case. only a treating professional, with full knowledge
of the patient's history, should have authority to change a patient's
medication.

 PRIOR LEGISLATIVE HISTORY :

Assembly Legislation:
2002:    A.10543 - Advanced to 3rd Reading
2003-04: A.3446 - Passed Assembly
2005-06: A.2204 - Passed Assembly
2007-08: A.4607B - Passed Assembly

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect 180 days after it has become law.

2009-S4112A (ACTIVE) - Bill Text download pdf

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

                                 4112--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 13, 2009
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health --  recommitted  to
  the  Committee  on  Health in accordance with Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

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:

  Section 1. Subdivision 6 of section 4406-c of the public health law is
renumbered subdivision 10 and four new subdivisions 6, 7, 8  and  9  are
added to read as follows:
  6.  NO  CONTRACT  OR AGREEMENT BETWEEN A HEALTH CARE PLAN AND A HEALTH
CARE PROVIDER SHALL CONTAIN ANY CLAUSE WHICH ENTITLES SUCH  HEALTH  CARE
PLAN  TO  REIMBURSE THE HEALTH CARE PROVIDER AT THE LOWEST PRICE OR RATE
THAT SUCH HEALTH CARE PROVIDER HAS CHARGED ANOTHER PERSON OR ENTITY  FOR
RENDERING THE SAME TREATMENT OR PERFORMING THE SAME PROCEDURE.
  7.  NO  HEALTH  CARE PLAN SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN
PROCEDURE PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM REFERRING A
PATIENT OR ENROLLEE TO A HEALTH CARE PROVIDER  BASED  SOLELY  UPON  SUCH
HEALTH  CARE PROVIDER'S PARTICIPATION STATUS WITH THE MANAGED CARE PROD-
UCT SUBSCRIBED TO BY THE PATIENT OR ENROLLEE.
  8. NO HEALTH CARE PLAN SHALL BY CONTRACT, WRITTEN  POLICY  OR  WRITTEN
PROCEDURE  REQUIRE  THE  DISCLOSURE  OF  AN  ENROLLEE'S  DIAGNOSIS  ON A
PRESCRIPTION AS A CONDITION FOR DISPENSING OF A PHARMACEUTICAL  DRUG  OR
AGENT, UNLESS OTHERWISE REQUIRED BY LAW.
  9.  NO HEALTH CARE PLAN SHALL BY CONTRACT, WRITTEN POLICY OR PROCEDURE
PROVIDE FOR OR ALLOW THE SUBSTITUTION OF A PHARMACEUTICAL DRUG OR  AGENT
(OTHER  THAN  A  GENERIC  SUBSTITUTION)  BY  ANY  PERSON  OTHER THAN THE
PRESCRIBING HEALTH CARE PROFESSIONAL.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00981-03-0

S. 4112--A                          2

  S 2. Subsections (h) and (i) of section 3217-b of the  insurance  law,
as  relettered  by  chapter  237  of  the  laws  of 2009, are relettered
subsections (l) and (m) and four new subsections (h), (i), (j)  and  (k)
are added to read as follows:
  (H)  NO  CONTRACT  OR  AGREEMENT  BETWEEN AN INSURER AND A HEALTH CARE
PROVIDER SHALL CONTAIN ANY CLAUSE WHICH ENTITLES SUCH INSURER  TO  REIM-
BURSE  THE  HEALTH  CARE  PROVIDER AT THE LOWEST PRICE OR RATE THAT SUCH
HEALTH CARE PROVIDER HAS CHARGED ANOTHER PERSON OR ENTITY FOR  RENDERING
THE SAME TREATMENT OR PERFORMING THE SAME PROCEDURE.
  (I)  NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN PROCEDURE
PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM REFERRING AN  INSURED
TO  A  PHYSICIAN BASED SOLELY UPON SUCH PHYSICIAN'S PARTICIPATION STATUS
WITH THE INSURANCE PRODUCT SUBSCRIBED TO BY THE INSURED.
  (J) NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN  PROCEDURE
REQUIRE  THE DISCLOSURE OF AN INSURED'S DIAGNOSIS ON A PRESCRIPTION AS A
CONDITION FOR AUTHORIZING THE COVERAGE FOR OR PAYMENT OR DISPENSING OF A
PHARMACEUTICAL DRUG OR AGENT, UNLESS OTHERWISE REQUIRED BY LAW.
  (K) NO INSURER WHICH MAINTAINS A DRUG FORMULARY,  OR  WHICH  CONTRACTS
WITH  ANOTHER  ENTITY  TO  MAINTAIN A DRUG FORMULARY, SHALL BY CONTRACT,
WRITTEN POLICY OR PROCEDURE PROVIDE FOR OR ALLOW THE SUBSTITUTION  OF  A
PHARMACEUTICAL  DRUG OR AGENT (OTHER THAN A GENERIC SUBSTITUTION) BY ANY
PERSON OTHER THAN THE PRESCRIBING HEALTH CARE PROFESSIONAL.
  S 3. Subsections (h) and (i) of section 4325 of the insurance law,  as
relettered   by  chapter  237  of  the  laws  of  2009,  are  relettered
subsections (l) and (m) and four new subsections (h), (i), (j)  and  (k)
are added to read as follows:
  (H)  NO  CONTRACT  OR  AGREEMENT  BETWEEN AN INSURER AND A HEALTH CARE
PROVIDER SHALL CONTAIN ANY CLAUSE WHICH ENTITLES SUCH INSURER  TO  REIM-
BURSE  THE  HEALTH  CARE  PROVIDER AT THE LOWEST PRICE OR RATE THAT SUCH
HEALTH CARE PROVIDER HAS CHARGED ANOTHER PERSON OR ENTITY FOR  RENDERING
THE SAME TREATMENT OR PERFORMING THE SAME PROCEDURE.
  (I)  NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN PROCEDURE
PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM REFERRING AN  INSURED
TO  A  PHYSICIAN BASED SOLELY UPON SUCH PHYSICIAN'S PARTICIPATION STATUS
WITH THE INSURANCE PRODUCT SUBSCRIBED TO BY THE INSURED.
  (J) NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN  PROCEDURE
REQUIRE  THE DISCLOSURE OF AN INSURED'S DIAGNOSIS ON A PRESCRIPTION AS A
CONDITION FOR AUTHORIZING THE COVERAGE FOR OR PAYMENT OR DISPENSING OF A
PHARMACEUTICAL DRUG OR AGENT, UNLESS OTHERWISE REQUIRED BY LAW.
  (K) NO INSURER WHICH MAINTAINS A DRUG FORMULARY,  OR  WHICH  CONTRACTS
WITH  ANOTHER  ENTITY  TO  MAINTAIN A DRUG FORMULARY, SHALL BY CONTRACT,
WRITTEN POLICY OR PROCEDURE PROVIDE FOR OR ALLOW THE SUBSTITUTION  OF  A
PHARMACEUTICAL  DRUG OR AGENT (OTHER THAN A GENERIC SUBSTITUTION) BY ANY
PERSON OTHER THAN THE PRESCRIBING HEALTH CARE PROFESSIONAL.
  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law, provided that the relettering of  subsection
(m)  of  section 3217-b and the relettering of subsection (m) of section
4325 of the insurance law made by sections two and three  of  this  act,
respectively,  shall not affect the repeal of such subsections and shall
be deemed repealed therewith.

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