NY State Senate Bill 2019-S6858

Senate Bill S6858

2019-2020 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to health
Nov 18, 2019	referred to rules

2019-S6858 (ACTIVE) - Details

See Assembly Version of this Bill:: A2983
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §4406-c, Pub Health L; amd §§3217-b & 4325, Ins L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A726
2011-2012: A594
2013-2014: A4466
2015-2016: A2210
2017-2018: A2370
2021-2022: S3231, A832
2023-2024: S5260
2025-2026: S5527

2019-S6858 (ACTIVE) - 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

2019-S6858 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6858

SPONSOR: SANDERS
 
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 10 would prohibit the use of "most favored
nation" clauses which arbitrarily lower reimbursement levels for the
provision of health care services.

Subdivision 11 would ban the use of contract language which prohibits

the ability of a physician to make referrals to other health care
providers.

Subdivision 12 would ban contract language which mandates the provision
of a patient's diagnosis on the written prescription as a condition for
covering a prescription drug.

Subdivision 13 would prohibit insurers from mandating the substitution
of a pharmaceutical agent (other than a generic equivalent) by any
person other than the prescribing professional or a pharmacist with whom
a prescribing physician has a collaboration agreement permitting substi-
tution.

Section 2 of the bill makes the same changes to section 3217-b of the
insurance Law.

Section 3 of the bill makes the same changes to section 4325 of the
insurance Law.

Section 4 of the bill is the effective date.

 
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 cost 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 such provider has charged any
entity for the same treatment. Consequently, if a physician wishes to
only charge a nominal fee in a particular instance, that physician jeop-
ardizes his or her reimbursement for all of his or her patients. Physi-
cians, hospitals, and other providers should be allowed and encouraged
to provide charity care without end angering the future of their prac-
tices.


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 mast 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-net-
work providers, an outright ban on out-of-network referrals is tanta-
mount to a ban on 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 physi-
cians 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 treat-
ing professional, with full knowledge of the patient's history, should
have authority to change a patient's medication.

 
PRIOR LEGISLATIVE HISTORY:

2002: A.10543 - advanced to third reading 2003-2004: A.3446 - passed
Assembly 2005-2006: A.2204 - passed Assembly 2007-2008: A.4607-3 -
passed Assembly 2009-2010: A.726-A - passed Assembly 2011-2012: A.594 -
passed Assembly 2013-2014: A.4466-A - passed Assembly 2015-2016: A.2210
- advanced to third reading 2017-2018: A.2370-A - advanced to third
reading

 
FISCAL IMPLICATIONS:  None

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

2019-S6858 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6858
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             November 18, 2019
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 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 7 of section 4406-c of the public health law,
 as added by chapter 705 of the laws of 1996 and as renumbered by chapter
 487 of the laws of 2010, is  renumbered  subdivision  15  and  four  new
 subdivisions 11, 12, 13 and 14 are added to read as follows:
   11.  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.
   12.  NO  HEALTH CARE PLAN SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN
 PROCEDURE PROHIBIT 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 PRODUCT SUBSCRIBED
 TO BY THE PATIENT OR ENROLLEE.
   13. 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.
   14. 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 OR BY A PHARMACIST UNDER SECTION
 SIXTY-EIGHT HUNDRED ONE-A OF THE EDUCATION LAW.
   § 2. Subsection (h) of section 3217-b of the insurance law, as  relet-
 tered  by  chapter 237 of the laws of 2009, is relettered subsection (p)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03359-03-9

 S. 6858                             2
 
 and four new subsections (h), (m), (n) and (o)  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.
   (M)  NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN PROCEDURE
 PROHIBIT ANY HEALTH CARE PROVIDER FROM REFERRING AN INSURED TO A  PHYSI-
 CIAN  BASED  SOLELY  UPON SUCH PHYSICIAN'S PARTICIPATION STATUS WITH THE
 INSURANCE PRODUCT SUBSCRIBED TO BY THE INSURED.
   (N) 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.
   (O) 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 OR BY A PHAR-
 MACIST UNDER SECTION SIXTY-EIGHT HUNDRED ONE-A OF THE EDUCATION LAW.
   § 3. Subsection (i) of section 4325 of the insurance  law,  as  relet-
 tered  by  chapter 487 of the laws of 2010, is relettered subsection (q)
 and four new subsections (i), (n), (o) and (p)  are  added  to  read  as
 follows:
   (I)  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.
   (N)  NO INSURER SHALL BY CONTRACT, WRITTEN POLICY OR WRITTEN PROCEDURE
 PROHIBIT ANY HEALTH CARE PROVIDER FROM REFERRING AN INSURED TO A  PHYSI-
 CIAN  BASED  SOLELY  UPON SUCH PHYSICIAN'S PARTICIPATION STATUS WITH THE
 INSURANCE PRODUCT SUBSCRIBED TO BY THE INSURED.
   (O) 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.
   (P) 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 OR BY A PHAR-
 MACIST UNDER SECTION SIXTY-EIGHT HUNDRED ONE-A OF THE EDUCATION LAW.
   § 4. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

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