Prohibits incentive arrangements for inducing a health care provider to change prescriptions

BILL NUMBER:S1434

Title of bill

An act to amend the insurance law and the public health law, in relation to prohibiting accident and health insurers from offering incentives to health care providers to prescribe a specific drug or medical product

Purpose

To prohibit insurers from offering incentives to health care providers for issuing or changing prescriptions.

Summary of provisions

Section 1 - Amends section 3217-b of the Insurance Law to add new subsection (j), which prohibits an insurer from providing payment or incentive to a health care provider to issue or change a prescription for a specific drug or medical product.

Section 2 - Amends section 4325 of the Insurance Law to add new subsection (k), which prohibits an insurer from providing payment or incentive to a health care provider to issue or change a prescription for specific drug or medical product.

Section 3 - Amends section 4406-c of the Public Health Law to add a new subdivision 5-e, which prohibits a healthcare plan from providing payment or incentive to a health care provider to issue or change a prescription for a specific drug or medical product.

Section 4- Effective date is ninety days after becoming a law.

Justification

It has been reported that some insurance companies are providing financial incentives to doctors for switching patients' prescriptions to less expensive drugs. Some health plans have offered as much as $100 each time a physician switches a patient's prescription from a brand name to a generic. An upstate New York health plan began a pilot project with several medical groups in 2006 as part of a campaign to boost generic drug use. In this pilot, physicians who increased their ratio of generic drug prescriptions to brand-name drugs by five percentage points, would receive a slightly higher reimbursement for their patient office visits.

While lowering health care costs is an essential and necessary task if we are to meet the goal of ensuring that every New Yorker has affordable quality health care, insurance companies should not offer incentives to influence medical decisions. Monetary rewards for health care providers who switch patients' prescriptions from a costlier drug to a less expensive one should not be an acceptable practice. This legislation would prevent companies in New York from providing "kickbacks" to participating practitioners for changing prescriptions. Although many generics work as well as their counterpart brand-name products, ethical medical practice requires that a prescribers' independent clinical judgment not be compromised. A patient's diagnosis, symptoms, risk of complications, medical profile and prior clinical history should be taken into account prior

to changing or prescribing a prescription. The decision to prescribe a particular medication should be made without concern for financial gain.

Legislative history

2009-2010: S.3037- Referred to Insurance 2008: S.7516 - Referred to Insurance

Fiscal implications

None.

Effective date

Ninety days after becoming a law.