S T A T E O F N E W Y O R K
________________________________________________________________________
2886
2009-2010 Regular Sessions
I N S E N A T E
March 5, 2009
___________
Introduced by Sen. BONACIC -- 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:
Section 1. Statement of legislative intent. The legislature finds that
collective negotiation by competing health care providers for the terms
and conditions of contracts with health plans can result in beneficial
results for health care consumers. The legislature further finds
instances where health plans dominate the market to such a degree that
fair and adequate negotiations between health care providers and the
plans are adversely affected, so that it is necessary and appropriate to
provide for a system of collective action on behalf of health care
providers. Consequently, the legislature finds it appropriate and neces-
sary to authorize collective negotiations on the terms and conditions of
the relationship between health care plans and health care providers so
the imbalances between the two will not result in adverse conditions of
health care. This act is not intended to apply to or affect in any
respect collective bargaining relationships involving health care
providers as defined in section 4920 of the public health law or rights
relating to collective bargaining arising under applicable federal or
state collective bargaining statutes.
S 2. This act shall be known and may be cited as the "health care
providers collective negotiations act".
S 3. Article 49 of the public health law is amended by adding a new
title III to read as follows:
TITLE III
COLLECTIVE NEGOTIATIONS BY HEALTH CARE
PROVIDERS WITH HEALTH CARE PLANS
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02535-01-9
S. 2886 2
SECTION 4920. DEFINITIONS.
4921. COLLECTIVE NEGOTIATION AUTHORIZED.
4922. LIMITATIONS ON COLLECTIVE NEGOTIATION.
4923. COLLECTIVE NEGOTIATION REQUIREMENTS.
4924. REQUIREMENTS FOR HEALTH CARE PROVIDERS' REPRESENTATIVE.
4925. CERTAIN COLLECTIVE ACTION PROHIBITED.
4926. FEES.
4927. CONFIDENTIALITY.
4928. SEVERABILITY AND CONSTRUCTION.
S 4920. DEFINITIONS. FOR PURPOSES OF THIS TITLE:
1. "HEALTH CARE PLAN" 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:
(A) A HEALTH MAINTENANCE ORGANIZATION LICENSED PURSUANT TO ARTICLE
FORTY-THREE OF THE INSURANCE LAW OR CERTIFIED PURSUANT TO ARTICLE
FORTY-FOUR OF THIS CHAPTER;
(B) ANY OTHER ORGANIZATION CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF
THIS CHAPTER; OR
(C) AN INSURER OR CORPORATION SUBJECT TO THE INSURANCE LAW.
2. "PERSON" MEANS AN INDIVIDUAL, ASSOCIATION, CORPORATION, OR ANY
OTHER LEGAL ENTITY.
3. "HEALTH CARE PROVIDERS' REPRESENTATIVE" MEANS A THIRD PARTY WHO IS
AUTHORIZED BY HEALTH CARE PROVIDERS TO NEGOTIATE ON THEIR BEHALF WITH
HEALTH CARE PLANS OVER CONTRACTUAL TERMS AND CONDITIONS AFFECTING THOSE
HEALTH CARE PROVIDERS.
4. "STRIKE" MEANS A WORK STOPPAGE IN PART OR IN WHOLE, DIRECT OR INDI-
RECT, BY A BODY OF WORKERS TO GAIN COMPLIANCE WITH DEMANDS MADE ON AN
EMPLOYER.
5. "SUBSTANTIAL MARKET POWER IN A BUSINESS LINE" EXISTS IF A HEALTH
CARE PLAN'S MARKET SHARE OF A BUSINESS LINE WITHIN A SERVICE AREA AS
APPROVED BY THE COMMISSIONER, ALONE OR IN COMBINATION WITH THE MARKET
SHARES OF AFFILIATES, EXCEEDS EITHER TEN PERCENT OF THE TOTAL NUMBER OF
COVERED LIVES IN THAT SERVICE AREA FOR SUCH BUSINESS LINE OR TWENTY-FIVE
THOUSAND LIVES, OR IF THE COMMISSIONER DETERMINES THE MARKET POWER OF
THE INSURER IN THE RELEVANT INSURANCE PRODUCT AND GEOGRAPHIC MARKETS FOR
THE SERVICES OF THE PROVIDERS SEEKING TO COLLECTIVELY NEGOTIATE SIGNIF-
ICANTLY EXCEEDS THE COUNTERVAILING MARKET POWER OF THE PROVIDERS ACTING
INDIVIDUALLY.
6. "HEALTH CARE PROVIDER" MEANS A PERSON WHO IS LICENSED, CERTIFIED,
OR REGISTERED PURSUANT TO TITLE EIGHT OF THE EDUCATION LAW AND WHO PRAC-
TICES AS A HEALTH CARE PROVIDER AS AN INDEPENDENT CONTRACTOR AND/OR WHO
IS AN OWNER, OFFICER, SHAREHOLDER, OR PROPRIETOR OF A HEALTH CARE
PROVIDER. A HEALTH CARE PROVIDER UNDER TITLE EIGHT OF THE EDUCATION LAW
WHO PRACTICES AS AN EMPLOYEE OF A HEALTH CARE PROVIDER SHALL NOT BE
DEEMED A HEALTH CARE PROVIDER FOR PURPOSES OF THIS TITLE.
S 4921. COLLECTIVE NEGOTIATION AUTHORIZED. 1. HEALTH CARE PROVIDERS
PRACTICING WITHIN THE SERVICE AREA OF A HEALTH CARE PLAN MAY MEET AND
COMMUNICATE FOR THE PURPOSE OF COLLECTIVELY NEGOTIATING THE FOLLOWING
TERMS AND CONDITIONS OF PROVIDER CONTRACTS WITH THE HEALTH CARE PLAN:
(A) THE DETAILS OF THE UTILIZATION REVIEW PLAN AS DEFINED PURSUANT TO
SUBDIVISION TEN OF SECTION FORTY-NINE HUNDRED OF THIS ARTICLE;
(B) COVERAGE PROVISIONS; HEALTH CARE BENEFITS; BENEFIT MAXIMUMS,
INCLUDING BENEFIT LIMITATIONS; AND EXCLUSIONS OF COVERAGE;
(C) THE DEFINITION OF MEDICAL NECESSITY;
(D) THE CLINICAL PRACTICE GUIDELINES USED TO MAKE MEDICAL NECESSITY
AND UTILIZATION REVIEW DETERMINATIONS;
S. 2886 3
(E) PREVENTIVE CARE AND OTHER MEDICAL MANAGEMENT PRACTICES;
(F) DRUG FORMULARIES AND STANDARDS AND PROCEDURES FOR PRESCRIBING
OFF-FORMULARY DRUGS;
(G) RESPECTIVE PHYSICIAN LIABILITY FOR THE TREATMENT OR LACK OF TREAT-
MENT OF COVERED PERSONS;
(H) THE DETAILS OF HEALTH CARE PLAN RISK TRANSFER ARRANGEMENTS WITH
PROVIDERS;
(I) PLAN ADMINISTRATIVE PROCEDURES, INCLUDING METHODS AND TIMING OF
HEALTH CARE PROVIDER PAYMENT FOR SERVICES PURSUANT TO SECTION FORTY-FOUR
HUNDRED SIX-C OF THIS CHAPTER;
(J) PROCEDURES TO BE UTILIZED TO RESOLVE DISPUTES BETWEEN THE HEALTH
CARE PLAN AND HEALTH CARE PROVIDERS;
(K) PATIENT REFERRAL PROCEDURES INCLUDING, BUT NOT LIMITED TO, THOSE
APPLICABLE TO OUT-OF-POCKET NETWORK REFERRALS;
(L) THE FORMULATION AND APPLICATION OF HEALTH CARE PROVIDER REIMBURSE-
MENT PROCEDURES;
(M) QUALITY ASSURANCE PROGRAMS;
(N) THE PROCESS FOR RENDERING UTILIZATION REVIEW DETERMINATIONS
INCLUDING: ESTABLISHMENT OF A PROCESS FOR RENDERING UTILIZATION REVIEW
DETERMINATIONS WHICH SHALL, AT A MINIMUM, INCLUDE: WRITTEN PROCEDURES TO
ASSURE THAT UTILIZATION REVIEWS AND DETERMINATIONS ARE CONDUCTED WITHIN
THE TIMEFRAMES ESTABLISHED IN THIS ARTICLE; PROCEDURES TO NOTIFY AN
ENROLLEE, AN ENROLLEE'S DESIGNEE AND/OR AN ENROLLEE'S HEALTH CARE
PROVIDER OF ADVERSE DETERMINATIONS; AND PROCEDURES FOR APPEAL OF ADVERSE
DETERMINATIONS, INCLUDING THE ESTABLISHMENT OF AN EXPEDITED APPEALS
PROCESS FOR DENIALS OF CONTINUED INPATIENT CARE OR WHERE THERE IS IMMI-
NENT OR SERIOUS THREAT TO THE HEALTH OF THE ENROLLEE; AND
(O) HEALTH CARE PROVIDER SELECTION AND TERMINATION CRITERIA USED BY
THE HEALTH CARE PLAN.
2. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO ALLOW OR AUTHORIZE AN
ALTERATION OF THE TERMS OF THE INTERNAL AND EXTERNAL REVIEW PROCEDURES
SET FORTH IN LAW.
3. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO ALLOW A STRIKE OF A
HEALTH CARE PLAN BY HEALTH CARE PROVIDERS OR PLANS AS OTHERWISE SET
FORTH IN THE LAWS OF THIS STATE.
4. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO ALLOW OR AUTHORIZE
TERMS OR CONDITIONS WHICH WOULD IMPEDE THE ABILITY OF A HEALTH CARE PLAN
TO OBTAIN OR RETAIN ACCREDITATION BY THE NATIONAL COMMITTEE FOR QUALITY
ASSURANCE OR A SIMILAR BODY.
S 4922. LIMITATIONS ON COLLECTIVE NEGOTIATION. 1. IF THE HEALTH CARE
PLAN HAS SUBSTANTIAL MARKET POWER IN A BUSINESS LINE IN ANY SERVICE
AREA, HEALTH CARE PROVIDERS PRACTICING WITHIN THAT SERVICE AREA MAY
COLLECTIVELY NEGOTIATE THE FOLLOWING TERMS AND CONDITIONS RELATING TO
THAT BUSINESS LINE WITH THE HEALTH CARE PLAN:
(A) THE FEES ASSESSED BY THE HEALTH CARE PLAN FOR SERVICES, INCLUDING
FEES ESTABLISHED THROUGH THE APPLICATION OF REIMBURSEMENT PROCEDURES;
(B) THE CONVERSION FACTORS USED BY THE HEALTH CARE PLAN IN A
RESOURCE-BASED RELATIVE VALUE SCALE REIMBURSEMENT METHODOLOGY OR OTHER
SIMILAR METHODOLOGY; PROVIDED THE SAME ARE NOT OTHERWISE ESTABLISHED BY
STATE OR FEDERAL LAW OR REGULATION;
(C) THE AMOUNT OF ANY DISCOUNT GRANTED BY THE HEALTH CARE PLAN ON THE
FEE OF HEALTH CARE SERVICES TO BE RENDERED BY HEALTH CARE PROVIDERS;
(D) THE DOLLAR AMOUNT OF CAPITATION OR FIXED PAYMENT FOR HEALTH
SERVICES RENDERED BY HEALTH CARE PROVIDERS TO HEALTH CARE PLAN ENROL-
LEES;
S. 2886 4
(E) THE PROCEDURE CODE OR OTHER DESCRIPTION OF A HEALTH CARE SERVICE
COVERED BY A PAYMENT AND THE APPROPRIATE GROUPING OF THE PROCEDURE
CODES; OR
(F) THE AMOUNT OF ANY OTHER COMPONENT OF THE REIMBURSEMENT METHODOLOGY
FOR A HEALTH CARE SERVICE.
2. NOTHING HEREIN SHALL BE DEEMED TO AFFECT OR LIMIT THE RIGHT OF A
HEALTH CARE PROVIDER OR GROUP OF HEALTH CARE PROVIDERS TO COLLECTIVELY
PETITION A GOVERNMENT ENTITY FOR A CHANGE IN A LAW, RULE, OR REGULATION.
S 4923. COLLECTIVE NEGOTIATION REQUIREMENTS. 1. COLLECTIVE NEGOTIATION
RIGHTS GRANTED BY THIS TITLE MUST CONFORM TO THE FOLLOWING REQUIREMENTS:
(A) HEALTH CARE PROVIDERS MAY COMMUNICATE WITH OTHER HEALTH CARE
PROVIDERS REGARDING THE CONTRACTUAL TERMS AND CONDITIONS TO BE NEGOTI-
ATED WITH A HEALTH CARE PLAN;
(B) HEALTH CARE PROVIDERS MAY COMMUNICATE WITH HEALTH CARE PROVIDERS'
REPRESENTATIVES;
(C) A HEALTH CARE PROVIDERS' REPRESENTATIVE IS THE ONLY PARTY AUTHOR-
IZED TO NEGOTIATE WITH HEALTH CARE PLANS ON BEHALF OF THE HEALTH CARE
PROVIDERS AS A GROUP;
(D) A HEALTH CARE PROVIDER CAN BE BOUND BY THE TERMS AND CONDITIONS
NEGOTIATED BY THE HEALTH CARE PROVIDERS' REPRESENTATIVES; AND
(E) IN COMMUNICATING OR NEGOTIATING WITH THE HEALTH CARE PROVIDERS'
REPRESENTATIVE, A HEALTH CARE PLAN IS ENTITLED TO CONTRACT WITH OR OFFER
DIFFERENT CONTRACT TERMS AND CONDITIONS TO INDIVIDUAL COMPETING HEALTH
CARE PROVIDERS.
2. A HEALTH CARE PROVIDERS' REPRESENTATIVE MAY NOT REPRESENT MORE THAN
THIRTY PERCENT OF THE MARKET OF HEALTH CARE PROVIDERS OR OF A PARTICULAR
HEALTH CARE PROVIDER TYPE OR SPECIALTY PRACTICING IN THE SERVICE AREA OR
PROPOSED SERVICE AREA OF A HEALTH CARE PLAN THAT COVERS LESS THAN FIVE
PERCENT OF THE ACTUAL NUMBER OF COVERED LIVES OF THE HEALTH CARE PLAN IN
THE AREA, AS DETERMINED BY THE DEPARTMENT.
3. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO PROHIBIT COLLECTIVE
ACTION ON THE PART OF ANY HEALTH CARE PROVIDER WHO IS A MEMBER OF A
COLLECTIVE BARGAINING UNIT RECOGNIZED PURSUANT TO THE NATIONAL LABOR
RELATIONS ACT.
S 4924. REQUIREMENTS FOR HEALTH CARE PROVIDERS' REPRESENTATIVE. 1.
BEFORE ENGAGING IN COLLECTIVE NEGOTIATIONS WITH A HEALTH CARE PLAN ON
BEHALF OF HEALTH CARE PROVIDERS, A HEALTH CARE PROVIDERS' REPRESENTATIVE
SHALL FILE WITH THE COMMISSIONER, IN THE MANNER PRESCRIBED BY THE
COMMISSIONER, INFORMATION IDENTIFYING THE REPRESENTATIVE, THE REPRESEN-
TATIVE'S PLAN OF OPERATION, AND THE REPRESENTATIVE'S PROCEDURES TO
ENSURE COMPLIANCE WITH THIS TITLE.
2. BEFORE ENGAGING IN THE COLLECTIVE NEGOTIATIONS, THE HEALTH CARE
PROVIDERS' REPRESENTATIVE SHALL ALSO SUBMIT TO THE COMMISSIONER FOR THE
COMMISSIONER'S APPROVAL A REPORT IDENTIFYING THE PROPOSED SUBJECT MATTER
OF THE NEGOTIATIONS OR DISCUSSIONS WITH THE HEALTH CARE PLAN AND THE
EFFICIENCIES OR BENEFITS EXPECTED TO BE ACHIEVED THROUGH THE NEGOTI-
ATIONS. THE COMMISSIONER SHALL NOT APPROVE THE REPORT IF THE COMMISSION-
ER DETERMINES THAT THE PROPOSED NEGOTIATIONS WOULD EXCEED THE AUTHORITY
GRANTED UNDER THIS TITLE.
3. THE REPRESENTATIVE SHALL SUPPLEMENT THE INFORMATION IN THE REPORT
ON A REGULAR BASIS OR AS NEW INFORMATION BECOMES AVAILABLE, INDICATING
THAT THE SUBJECT MATTER OF THE NEGOTIATIONS WITH THE HEALTH CARE PLAN
HAS CHANGED OR WILL CHANGE. IN NO EVENT SHALL THE REPORT BE LESS THAN
EVERY THIRTY DAYS.
4. WITH THE ADVICE OF THE SUPERINTENDENT OF INSURANCE, THE COMMISSION-
ER SHALL APPROVE OR DISAPPROVE THE REPORT NOT LATER THAN THE TWENTIETH
S. 2886 5
DAY AFTER THE DATE ON WHICH THE REPORT IS FILED. IF DISAPPROVED, THE
COMMISSIONER SHALL FURNISH A WRITTEN EXPLANATION OF ANY DEFICIENCIES,
ALONG WITH A STATEMENT OF SPECIFIC PROPOSALS FOR REMEDIAL MEASURES TO
CURE THE DEFICIENCIES. IF THE COMMISSIONER DOES NOT SO ACT WITHIN THE
TWENTY DAYS, THE REPORT SHALL BE DEEMED APPROVED.
5. A PERSON WHO ACTS AS A HEALTH CARE PROVIDERS' REPRESENTATIVE WITH-
OUT THE APPROVAL OF THE COMMISSIONER UNDER THIS SECTION SHALL BE DEEMED
TO BE ACTING OUTSIDE THE AUTHORITY GRANTED UNDER THIS TITLE.
6. BEFORE REPORTING THE RESULTS OF NEGOTIATIONS WITH A HEALTH CARE
PLAN OR PROVIDING TO THE AFFECTED HEALTH CARE PROVIDERS AN EVALUATION OF
ANY OFFER MADE BY A HEALTH CARE PLAN, THE HEALTH CARE PROVIDERS' REPRE-
SENTATIVE SHALL FURNISH FOR APPROVAL BY THE COMMISSIONER, BEFORE DISSEM-
INATION TO THE HEALTH CARE PROVIDERS, A COPY OF ALL COMMUNICATIONS TO BE
MADE TO THE HEALTH CARE PROVIDERS RELATED TO NEGOTIATIONS, DISCUSSIONS,
AND OFFERS MADE BY THE HEALTH CARE PLAN.
7. A HEALTH CARE PROVIDERS' REPRESENTATIVE SHALL REPORT THE END OF
NEGOTIATIONS TO THE COMMISSIONER NOT LATER THAN THE FOURTEENTH DAY AFTER
THE DATE OF A HEALTH CARE PLAN DECISION DECLINING NEGOTIATION, CANCELING
NEGOTIATIONS, OR FAILING TO RESPOND TO A REQUEST FOR NEGOTIATION.
S 4925. CERTAIN COLLECTIVE ACTION PROHIBITED. 1. THIS TITLE IS NOT
INTENDED TO AUTHORIZE COMPETING HEALTH CARE PROVIDERS TO ACT IN CONCERT
IN RESPONSE TO A REPORT ISSUED BY THE HEALTH CARE PROVIDERS' REPRESEN-
TATIVE RELATED TO THE REPRESENTATIVE'S DISCUSSIONS OR NEGOTIATIONS WITH
HEALTH CARE PLANS.
2. NO HEALTH CARE PROVIDERS' REPRESENTATIVE SHALL NEGOTIATE ANY AGREE-
MENT THAT EXCLUDES, LIMITS THE PARTICIPATION OR REIMBURSEMENT OF, OR
OTHERWISE LIMITS THE SCOPE OF SERVICES TO BE PROVIDED BY ANY HEALTH CARE
PROVIDER OR GROUP OF HEALTH CARE PROVIDERS WITH RESPECT TO THE PERFORM-
ANCE OF SERVICES THAT ARE WITHIN THE HEALTH CARE PROVIDER'S SCOPE OF
PRACTICE, LICENSE, REGISTRATION, OR CERTIFICATE.
S 4926. FEES. EACH PERSON WHO ACTS AS THE REPRESENTATIVE OR NEGOTIAT-
ING PARTIES UNDER THIS TITLE SHALL PAY TO THE DEPARTMENT A FEE TO ACT AS
A REPRESENTATIVE. THE COMMISSIONER, BY RULE, SHALL SET FEES IN AMOUNTS
DEEMED REASONABLE AND NECESSARY TO COVER THE COSTS INCURRED BY THE
DEPARTMENT IN ADMINISTERING THIS TITLE. ANY FEE COLLECTED UNDER THIS
SECTION SHALL BE DEPOSITED IN THE STATE TREASURY TO THE CREDIT OF THE
GENERAL FUND/STATE OPERATIONS - 003 FOR THE NEW YORK STATE DEPARTMENT OF
HEALTH FUND.
S 4927. CONFIDENTIALITY. ALL REPORTS AND OTHER INFORMATION REQUIRED TO
BE REPORTED TO THE DEPARTMENT UNDER THIS TITLE SHALL NOT BE SUBJECT TO
DISCLOSURE UNDER ARTICLE SIX OF THE PUBLIC OFFICERS LAW OR ARTICLE THIR-
TY-ONE OF THE CIVIL PRACTICE LAW AND RULES.
S 4928. SEVERABILITY AND CONSTRUCTION. THE PROVISIONS OF THIS TITLE
SHALL BE SEVERABLE, AND IF ANY COURT OF COMPETENT JURISDICTION DECLARES
ANY PHRASE, CLAUSE, SENTENCE OR PROVISION OF THIS TITLE TO BE INVALID,
OR ITS APPLICABILITY TO ANY GOVERNMENT, AGENCY, PERSON OR CIRCUMSTANCE
IS DECLARED INVALID, THE REMAINDER OF THIS TITLE AND ITS RELEVANT APPLI-
CABILITY SHALL NOT BE AFFECTED. THE PROVISIONS OF THIS TITLE SHALL BE
LIBERALLY CONSTRUED TO GIVE EFFECT TO THE PURPOSES THEREOF.
S 4. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided that the commissioner of health is
authorized to promulgate any and all rules and regulations and take any
other measures necessary to implement this act on its effective date on
or before such date.