Enacts the health care consumer and provider protection act relating to collective negotiations by health care providers with certain health care plans

Summary of specific provisions

Section 1 is a statement of legislative intent that states that the legislature finds it appropriate and necessary to authorize collective negotiations on patient care issues and on fee-related and other issues where it determines that health plans have an undue advantage negotiating the terms of contracts with health care providers. The legislative intent states that, in such situations, the Legislature intends to replace competition with regulation of health plan-provider agreements. The legislative intent clarifies that the act is not intended to apply or affect collective bargaining relationships involving health care providers who are employees of health care providers or rights relating to collective bargaining arising under applicable federal/state collective bargaining statutes.

Section 2 cites the bill as the Health Care Consumer and Provider Protection 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. The attorney general would be authorized to approve the health care providers' representative request to negotiate based upon the benefits to be achieved for providers and consumer of health services, and is required to review any offer submitted to the health care providers' representative prior to sharing with affected health care providers. The legislation would also create a mechanism for resolving disputes when there is an impasse or when the health plan refuses to negotiate. The bill would also direct the attorney general to approval any final agreement as well as monitor the implemented agreements to assure continued compliance with the law. Importantly, 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 120 days after it shall have become a law, provided that regulations may be adopted prior to the effective date necessary to implement this act.

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, facilitate resolution of negotiation impasses, and actively monitor implementation of agreements. 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 and other health care providers greater ability to advocate for patients in contract negotiations is critical since large managed care organizations control huge shares of health insurance market, both in New York as well as across the country. In just the last few years, we have seen the mergers of United Healthcare and Oxford, MVP and Preferred Care, and Wellpoint with Wellchoice (Empire). As of March 2008, almost 75% of the enrollees in managed care plans in New York State were enrolled in just five health plans (GHI/HIP, United/Oxford/ Americhoice, Excellus, Empire and MVP/Preferred Care). We have also seen an emerging trend of long-time not-for-profit health insurance companies such as Empire and HIP seeking to convert to for-profit status.

Due to the current imbalance of negotiating power in favor of the managed care plans, physicians and other health care providers are offered take-it-or-leave-it contracts by health plans that significantly hamper their ability to provide quality patient care. These contracts permit burdensome processes and unjustifiably long wait times for obtaining pre-authorization to provide needed patient care; impose limitations on whom a physician may refer a patient for necessary care; permit demands for refunds of payments long after the time that such payments were originally made; permit health plans to make major changes to key elements of a contract without physician consent; and cede to physicians the legal consequences for patients harmed by health plan 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.

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.