NY State Senate Bill 2025-S5527

Senate Bill S5527

2025-2026 Legislative Session

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

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Current 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
Feb 24, 2025	referred to health

co-Sponsors

2025-S5527 (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
Versions Introduced in Other Legislative Sessions:: 2019-2020: S6858
2021-2022: S3231
2023-2024: S5260

2025-S5527 (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 contracts which allow for the substitution of a pharmaceutical drug or agent by any person other than the prescribing health care professional.

2025-S5527 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5527

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 three new subdivisions to section 4406-c of the Public
Health Law. Subdivision 11 would prohibit the use of "most favored
nation" clauses which arbitrarily lower reimbursement levels for the
provision of health care services.

Subdivision 12 would ban the use of contract language which prohibits
the ability of a physician to make referrals to other health care

providers.

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 provider wishes to
only charge a nominal fee in a particular instance, that provider jeop-
ardizes his or her reimbursement for all his or her patients.  Physi-
cians, hospitals, and other providers should be allowed and encouraged
to provide charity care without endangering 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.

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:

2022 SENATE THIRD READING

2022 passed assembly

2021 SENATE THIRD READING

2021 assembly third reading

 
FISCAL IMPLICATIONS:

None

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

2025-S5527 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5527
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 24, 2025
                                ___________
 
 Introduced  by Sens. SANDERS, MAY -- 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 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  17  and  three  new
 subdivisions 14, 15 and 16 are added to read as follows:
   14.  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.
   15.  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.
   16. 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 added
 by chapter 705 of the laws of 1996 and as relettered by chapter  237  of
 the laws of 2009, is relettered subsection (r) and three new subsections
 (h), (p) and (q) 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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10130-01-5

 S. 5527                             2
 
 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.
   (P)  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.
   (Q) 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 added  by
 chapter  705 of the laws of 1996 and as relettered by chapter 487 of the
 laws of 2010, is relettered subsection (r)  and  three  new  subsections
 (i), (p) and (q) 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.
   (P)  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.
   (Q) 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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Senate Bill S5527

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Sponsored By

James Sanders Jr.