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

10 Co-sponsors

• Jeffrey Dinowitz
• Steven Englebright
• Sandy Galef
• Susan John
• Amy Paulin
• Michael Cusick
• Audrey Pheffer
• Brian Kavanagh
• Marc Alessi
• Ginny Fields

21 Multi-sponsors

• Jeffrion Aubry
• James F. Brennan
• William Colton
• Vivian Cook
• Steven Cymbrowitz
• Deborah Glick
• Aileen Gunther
• Carl Heastie
• Earlene Hooper
• Rhoda Jacobs
• Micah Kellner
• Barbara Lifton
• Nettie Mayersohn
• John McEneny
• N. Nick Perry
• Jose Rivera
• Peter Rivera
• Annette Robinson
• William Scarborough
• Robert Sweeney
• Darryl Towns

BILL NUMBER:A726A

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 far 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 far a treatment/procedure at the lowest amount such provider has charged any entity far 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 far 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 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 far in and out-of-network providers, an outright ban an out-of-network referrals is tantamount to a ban an 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

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

Fiscal implications

None

Effective date

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