Enacts provisions relating to collective negotiations by health care providers with certain health care plans

Section 2 cites the bill as the New York State Managed Care Freedom of Choice Act.

Section 3 amends article 49 to the public health law by adding a new title III titled Collective Negotiations by Health Care Providers with Health Care Plans.

This legislation adds a new Article 49-A to the public health law to authorize collective bargaining for independent contractor health care providers including physicians. This bill would create a system under which the state would closely monitor those negotiations and any negotiations involving fee-related matters would only be permitted when an individual managed care plan controls a substantial share of the managed care market. This legislation would not authorize strikes or concerted action by physicians in response to negotiations with health care plans.

Section 4. This act shall take effect 90 days after it shall have become a law, provided that the department of health may promulgate and establish any regulations pursuant hereto prior to the effective date.

Effects of present law which this bill would alter

Existing law does not provide a statutory right for independent contractor physicians to collectively negotiate with health care plans.

Justification

Currently, federal antitrust laws prohibit individual physicians from collectively negotiating any provisions of contracts they sign with managed care entities. This bill would allow physicians in New York State to conduct some collective negotiations by creating a system under which the state would closely monitor those negotiations. Negotiations involving fee-related matters would be prohibited unless an individual managed care plan controls a substantial share of the managed care market. Giving physicians greater ability to advocate for patients in contract negotiations is critical since large health maintenance organizations are gobbling up huge shares of the health insurance market. The proposed merger of Aetna/U.S. Healthcare/NYLCare with Prudential Healthcare would produce a company with an overwhelming share of the managed care market in New York State. Much publicity has surrounded the experiences of physicians across the state in dealing with the large insurance companies' bullying tactics. Due to the current imbalance of negotiating power in favor of the HMOs, physicians throughout the country are being offered take-it-or-leave-it contracts that significantly hamper their ability to provide quality patient care. Typical provider-contract abuses used by large HMOs and insurers include clauses in which the HMO withholds a portion of a physician's monthly per-patient payment, releasing the differential at the end of the year only to physicians whose patients use less than the average amount of medical services. This conflict between the economic interests of physicians and the welfare of their patients creates an unfair ethical burden that can lead to less-than-optimal care for patients. Another typical physician contract abuse holds physicians solely responsible for the quality of health care services provided while at the same time requiring physicians to fully comply with the HMO's utilization review program, which limits the amount and nature of medical services that can be provided to a patient. This responsibility-without-authority provision is designed to insulate the managed c are company from liability for patients who are harmed by its utilization review decisions. This bill, by allowing independent contractor physicians to conduct some collective negotiations while being closely monitored by the state, would give physicians greater ability to advocate for patients in contract negotiations. This bill would create a system under which the state would closely monitor those negotiations and any negotiations involving fee-related matters would only be permitted when an individual managed care plan controls a substantial share of the managed care market. This legislation would not authorize strikes or boycotts of health benefit plans by physicians.

Legislative history

2007-2008: A.2177 Reported to Ways & Means 2005-2006: A.6458 Reported to Ways & Means 2003-2004: A1317-A Reported to Ways & means 2001-2002: A5466/S.3569 Reported to Third Reading Calendar 2000: A9484-A/S.7541-A Referred to Health/Senate Finance

Fiscal implications

None to the State. The bill would provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Effective date

120 days after it shall have become a law, provided that the department of health may promulgate and establish any regulations pursuant hereto prior to the effective date.