NY State Senate Bill 2021-S1007

Archive: Last Bill Status - In Senate Committee Insurance 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 06, 2021	referred to insurance

2021-S1007 (ACTIVE) - Details

See Assembly Version of this Bill:: A3659
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3217-b, Ins L; amd §4406, Pub Health L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S8207, A9781
2023-2024: A3148

2021-S1007 (ACTIVE) - Summary

Prohibits an insurer or health maintenance organization from including certain requirements in insurance contracts.

2021-S1007 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S1007

SPONSOR: BENJAMIN
 
TITLE OF BILL:

An act to amend the insurance law and the public health law, in relation
to prohibiting certain requirements in insurance contracts

 
PURPOSE:

The legislation would ban anti-competitive hospital contracting prac-
tices that create higher health care prices for consumers and employers

 
SUMMARY OF PROVISIONS:

Section one amends the insurance law to prohibit health plans from
entering into agreements or contracts with health care providers that

* Require the health plan to include all members of a provider group in
its network;

* Require the health plan to place all members of a provider group in
the same network tier;

* Require the health plan to include all members of a provider group in
all of its products;

* Forbid health plans from using benefit design to encourage consumers
to seek services from higher-value health care providers;

* Contain most-favored-nation provisions in which the provider will not
give an equal or more favorable price to any other plan; or

* Limit the ability of the health plans or provider from disclosing fees
for services or the allowed amounts. Such provisions in existing
contracts would become null and void effective January 1, 2021.

Section two amends the public health law to prohibit health plans from
entering into agreements or contracts with health care providers that

* Require the health plan to include all members of a provider group in
its network;

* Require the health plan to place all members of a provider group in
the same network tier;

* Require the health plan to include all members of a provider group in
all of its products;

* Forbid health plans from using benefit design to encourage consumers
to seek services from higher-value health care providers;

* Contain most-favored-nation provisions in which the provider will not
give an equal or more favorable price to any other plan; or

* Limit the ability of the health plans or provider from disclosing fees
for services or the allowed amounts. Such provisions in existing
contracts would become null and void effective January 1, 2021.

Section three provides the effective date.

 
JUSTIFICATION:

According to multiple studies, the cost of health care in New York
continues to exceed the national average, with increases in prices
charged by provides as one of the major driver of rising health insur-
ance premiums. According to the NY State Health Foundation's December
2016 report, Why are Hospital Prices Different? An Examination of New
York Hospital Reimbursement, "a hospital's market leverage - its bargain
power when negotiation with insurers - is a key factor in the prices a
hospital can command," and "contract provisions between hospitals and
insurers can hinder competition, product innovation, transparency, and
cost containment strategies."

To maintain access to health care for New Yorkers and support a compet-
itive market for the industry, the report recommended barring certain
contractual language from hospital/insurer contracts, and that policies
could include the barring of confidentiality language, anti-steering
language, and language that hinders the ability of the tiered network
product to work efficiently.

This legislation builds upon the Foundation's recommendations and seeks
to improve affordability for employers and consumers by prohibiting
restrictive contracting language that create artificial barriers to
promoting greater competition in the marketplace, increasing transparen-
cy of health care costs, and providing more affordable options for
employers and consumers.

As an example, "all-or-nothing" contracts require that if a health plan
wants a contract with any provider or affiliate in a particular provider
organization, it must contract with all providers in the system. Provid-
er organizations use this type of provision to leverage the status of
their must-have providers to demand high payment rates for the entire
provider organization, including those providers in more competitive
areas and specialties. Similarly, restrictive contract provisions some-
times require that a health plan place all physicians, hospitals, and
other facilities associated with the dominant provider system in the
most favorable tier of providers.  This legislation provides an equita-
ble balance for hospitals contracting with health plans and employer
groups, by allowing for competition, fair negotiations, and ensure
consumers benefits. The legislation would help address the issue of
pricing fairness and access to affordable health care in the state as
well as help ensure that New Yorkers are not subjected to unfair busi-
ness practices that increase health insurance premiums.

 
LEGISLATIVE HISTORY:

2029-20: S8207/A9781

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect January 1, 2022.

2021-S1007 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1007
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by Sen. BENJAMIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law and the public health law, in relation
   to prohibiting certain requirements in insurance contracts

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Section 3217-b of the insurance law is amended by adding a
 new subsection (m) to read as follows:
   (M)(1) NO INSURER THAT OFFERS A MANAGED CARE PRODUCT OR  A  COMPREHEN-
 SIVE  POLICY  THAT  UTILIZES  A  NETWORK OF PROVIDERS SHALL ENTER INTO A
 CONTRACT, WRITTEN POLICY, WRITTEN PROCEDURE OR AGREEMENT WITH ANY HEALTH
 CARE PROVIDER THAT:
   (A) REQUIRES AN INSURER TO INCLUDE ALL MEMBERS OF  A  PROVIDER  GROUP,
 INCLUDING  MEDICAL  PRACTICE  GROUPS  AND  FACILITIES, IN ITS NETWORK OF
 PARTICIPATING PROVIDERS;
   (B) REQUIRES AN INSURER TO PLACE ALL  MEMBERS  OF  A  PROVIDER  GROUP,
 INCLUDING  MEDICAL  PRACTICE  GROUPS AND FACILITIES, IN THE SAME NETWORK
 TIER;
   (C) REQUIRES AN INSURER TO INCLUDE ALL MEMBERS OF  A  PROVIDER  GROUP,
 INCLUDING  MEDICAL  PRACTICE  GROUPS  AND  FACILITIES,  IN  ALL PRODUCTS
 OFFERED BY THE INSURER;
   (D) PROHIBITS INSURERS FROM USING BENEFIT DESIGNS TO ENCOURAGE MEMBERS
 TO SEEK SERVICES FROM HIGHER-VALUE HEALTH CARE PROVIDERS;
   (E) CONTAINS A MOST-FAVORED-NATION PROVISION; PROVIDED, HOWEVER, NOTH-
 ING IN THIS SECTION SHALL BE CONSTRUED TO PROHIBIT A HEALTH INSURER  AND
 A PROVIDER FROM NEGOTIATING PAYMENT RATES AND PERFORMANCE-BASED CONTRACT
 TERMS  THAT  WOULD  RESULT  IN  THE  INSURER RECEIVING A RATE THAT IS AS
 FAVORABLE, OR MORE FAVORABLE, THAN THE RATES NEGOTIATED BETWEEN A HEALTH
 CARE PROVIDER AND ANOTHER ENTITY; AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04975-01-1

 S. 1007                             2
 
   (F) LIMITS THE ABILITY OF THE INSURER OR  HEALTH  CARE  PROVIDER  FROM
 DISCLOSING  FEES  FOR  SERVICES  OR THE ALLOWED AMOUNTS TO AN INSURED OR
 INSURED'S HEALTH CARE PROVIDER.
   (2)  AFTER JANUARY FIRST, TWO THOUSAND TWENTY-TWO, ANY CONTRACT, WRIT-
 TEN POLICY, WRITTEN  PROCEDURE  OR  AGREEMENT  THAT  CONTAINS  A  CLAUSE
 CONTRARY  TO  THE PROVISIONS SET FORTH IN THIS SECTION SHALL BE NULL AND
 VOID; PROVIDED, HOWEVER, THE REMAINING CLAUSES  OF  THE  CONTRACT  SHALL
 REMAIN IN EFFECT FOR THE DURATION OF THE CONTRACT TERM.
   §  2. Section 4406 of the public health law is amended by adding a new
 subdivision 6 to read as follows:
   6. (A) NO HEALTH MAINTENANCE ORGANIZATION THAT OFFERS A  MANAGED  CARE
 PRODUCT  OR  A COMPREHENSIVE POLICY THAT UTILIZES A NETWORK OF PROVIDERS
 SHALL ENTER INTO A CONTRACT, WRITTEN POLICY, WRITTEN PROCEDURE OR AGREE-
 MENT WITH ANY HEALTH CARE PROVIDER THAT:
   (I) REQUIRES AN INSURER TO INCLUDE ALL MEMBERS OF  A  PROVIDER  GROUP,
 INCLUDING  MEDICAL  PRACTICE  GROUPS  AND  FACILITIES, IN ITS NETWORK OF
 PARTICIPATING PROVIDERS;
   (II) REQUIRES AN INSURER TO PLACE ALL MEMBERS  OF  A  PROVIDER  GROUP,
 INCLUDING  MEDICAL  PRACTICE  GROUPS AND FACILITIES, IN THE SAME NETWORK
 TIER;
   (III) REQUIRES AN INSURER TO INCLUDE ALL MEMBERS OF A PROVIDER  GROUP,
 INCLUDING  MEDICAL  PRACTICE  GROUPS  AND  FACILITIES,  IN  ALL PRODUCTS
 OFFERED BY THE INSURER;
   (IV) PROHIBITS  INSURERS  FROM  USING  BENEFIT  DESIGNS  TO  ENCOURAGE
 MEMBERS TO SEEK SERVICES FROM HIGHER-VALUE HEALTH CARE PROVIDERS;
   (V) CONTAINS A MOST-FAVORED-NATION PROVISION; PROVIDED, HOWEVER, NOTH-
 ING  IN THIS SECTION SHALL BE CONSTRUED TO PROHIBIT A HEALTH INSURER AND
 A PROVIDER FROM NEGOTIATING PAYMENT RATES AND PERFORMANCE-BASED CONTRACT
 TERMS THAT WOULD RESULT IN THE INSURER  RECEIVING  A  RATE  THAT  IS  AS
 FAVORABLE, OR MORE FAVORABLE, THAN THE RATES NEGOTIATED BETWEEN A HEALTH
 CARE PROVIDER AND ANOTHER ENTITY; AND
   (VI)  LIMITS  THE  ABILITY OF THE INSURER OR HEALTH CARE PROVIDER FROM
 DISCLOSING FEES FOR SERVICES OR THE ALLOWED AMOUNTS  TO  AN  INSURED  OR
 INSURED'S HEALTH CARE PROVIDER.
   (B)  AFTER JANUARY FIRST, TWO THOUSAND TWENTY-TWO, ANY CONTRACT, WRIT-
 TEN POLICY, WRITTEN  PROCEDURE  OR  AGREEMENT  THAT  CONTAINS  A  CLAUSE
 CONTRARY  TO  THE PROVISIONS SET FORTH IN THIS SECTION SHALL BE NULL AND
 VOID; PROVIDED, HOWEVER, THE REMAINING CLAUSES  OF  THE  CONTRACT  SHALL
 REMAIN IN EFFECT FOR THE DURATION OF THE CONTRACT TERM.
   § 3. This act shall take effect January 1, 2022.

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Senate Bill S1007

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2021-S1007 (ACTIVE) - Details

2021-S1007 (ACTIVE) - Summary

2021-S1007 (ACTIVE) - Sponsor Memo

2021-S1007 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1007

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Sponsored By

Brian Benjamin

Archive: Last Bill Status - In Senate Committee Insurance Committee

2021-S1007 (ACTIVE) - Details

2021-S1007 (ACTIVE) - Summary

2021-S1007 (ACTIVE) - Sponsor Memo

2021-S1007 (ACTIVE) - Bill Text download pdf

Comments