Relates to the payment of medical malpractice insurance premiums and creates the health care access protection fund

Summary of specific provisions

Section 1 - A statement of Legislative Intent;

Section 2 - Amends Chapter 266 of the Laws of 1986 to provide that the costs of the first $550,000 of primary medical malpractice coverage of a physician who is eligible to receive excess insurance coverage shall be covered with funds generated through a special fund created by this legislation, starting with the policy year that begins July 1, 2009.

Section 3 - Amends the state finance law to create the Health Care Access Protection Fund and requires that funds accumulated, including income from invested funds, from the payments specified in sections 3240 and 4328 of the insurance law shall be deposited and credited to a special revenue fund to be established by the Comptroller to cover the costs of the first $550,000 of primary medical malpractice coverage of an eligible physician.

Section 4 and 5 - Amends the insurance law to require that if the loss ratio for an individual health insurance policy, a small group health insurance policy, a large group health insurance policy, an individual direct payment contract form, a small group or a small group remittance contract form, or a large group contract form is less than 87%, the insurer or corporation shall provide to the commissioner of health or their designee a percentage of the aggregate premium equal to the difference of the minimum loss ratio and the actual loss ratio offset by any amount that must be returned to policy holders or contract holders; provides that funds shall be directed to the Health Care Access Protection Fund; gives the superintendent of insurance the authority to audit data relating to these payments, impose penalties for noncompli- ance, and issue regulations to implement this section; provides a defi- nition for "loss ratio."

Section 6 - Amends the insurance law to provide that if the superinten- dent of insurance approves an increase in the cost of medical malprac- tice insurance coverage for physicians and surgeons, a health plan shall increase its fee schedule for physician reimbursement by a percentage equal to or greater than a percentage determined by the superintendent to be the increase in expenses allocable to the increase in the cost of insurance that has been approved; provides that the superintendent shall

establish separate percentages based upon region or specialty of prac- tice; Established a penalty against an insurer, organization, or corpo- ration that fails to include such an increase in its fee schedule or to include such an increase in its reimbursements for out of network services; States that nothing in this section shall be construed to prevent a health plan from increasing its fee schedule beyond what is required by the superintendent; States that nothing in this section shall be construed to require a decrease in reimbursements as a result of any decrease in the average rates for insurance coverage approved by the superintendent; Provides a definition for "health plan."

Section 7 - Provides that this act shall take effect immediately.

Justification

Access to quality health care is a critical element to achieving and sustaining a high quality of life for all New Yorkers, and assuring an adequate supply of physicians in New York is an essential component to that. As a result of rapidly rising liability insurance premiums, physicians are limiting the scope of their practice, increas- ing their patient load, leaving New York, or leaving the practice of medicine. Meanwhile the health insurance industry has generated enormous profits and reserves fare beyond that required by law. Since the payers exercise absolute control over the revenue side of the most physicians' practices, it is appropriate that some of these reserves and profits be used to reduce the burden being shouldered by physicians.

Prior legislative history

None.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately; provided that the amendments to chapter 266 of the laws of 1986 made by section one of this act shall apply to physician malpractice insurance policies issued on or after July 1, 2009.