Requires accredited office-based surgery facilities to register with its accrediting agency, in consultation with the department of health

Summary of provisions

This bill amends Section 230-d of the public health law to require that office-based surgery facilities register with a nationally-recognized accrediting agency as designated by the Department of Health to receive an operating certificate. The bill would also authorize accredited OBS facilities who have received an operating certificate to seek reimbursement for a facility fee if the health plan currently reimburses for the use of the facility charged in connection with the same covered procedure performed at an ambulatory surgery center or hospital, provided however, that when calculating the appropriate rate of office-based surgery facility fees, the health plans may also take into consideration certain comparable and non-comparable costs and obligations of ambulatory surgery centers and hospitals.

Existing law

Current law requires that office-based surgery facility must obtain and maintain full accredited status by a nationally-recognized accrediting agency approved by the Commissioner of Health. There are three accreditation entities which have been approved by the Commissioner: Accreditation Association for Ambulatory Health Care (AAAHC), American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF) and The Joint Commission.

Justification

In 2007, legislation was enacted to require that if certain procedures are not performed in a hospital or other Article 28 facility, they must be performed in an accredited office-based surgery facility. Sections of this legislation became effective on January 14, 2008 and on July 14, 2009. This measure was the culmination of the work of the Department of Health's Committee on Quality Assurance in Office-Based Surgery (OBS).

The accreditation conferred upon these office-based surgical facilities assures that these practices meet nationally recognized standards for patient safety and quality care and include: environment of care; emergency management; infection prevention and control; life safety; medication management; national patient safety goals; performance improvement; record of care, treatment of services; rights and responsibilities of the individual; and transplant safety.

Accredited office-based surgery facilities provide quality care at a lower cost than care provided in more costly Article 28 ambulatory surgery centers (ASCs) and hospitals. In fact, for thousands of New Yorkers, these facilities represent critical access points for vital, affordable health care services. However, many health plans refuse to pay office-based surgery facilities a facility fee; this despite the fact that accredited OBS facilities must shoulder the burden of significant costs not unlike those of the ASCs and hospitals. Unfortunately, there has been a lack of recognition of these costs on the part of third party payors. More importantly, insurance companies have also failed to recognize that the impact of non-payment of these fees has been to drive procedures from the low cost office-based surgery locations into the much more expensive hospital and other Article 28 facilities. This inevitable shift will dramatically drive up the cost of medical care. Sadly, numerous accredited OBS facilities have already started to close and move procedures to more expensive Article 28 facilities and hospitals.

Inexplicably, since the enactment of the office-based surgery accreditation process, third party payors have cited the fact that OBS facilities are not licensed as a basis for denial of claims. This bill addresses that by establishing a registration and certification process to provide OBS facilities with an added level of recognition to better enable them to seek reimbursement for facility fees from third party payors.

In addition, those few third party payors who have reimbursed office-based facilities have done so only for in-network facilities. To make matters worse, payors will often refuse to reimburse for out-of-network facilities, even in cases where the insureds have contracted and paid for out-of-network coverage. For the most part, OBS facilities have been denied access to the health plans' network further hindering their ability to seek reimbursement and negatively impacting their patients' choice and access and to low cost, quality care. This bill would correct such inequity by providing accredited office-based surgery facilities with a mechanism to obtain a formal recognition through a certificate of registration. Specifically, the bill would authorize accredited OBS facilities to seek reimbursement for a facility fee if the health plan currently reimburses for the use of the facility charged in connection with the same covered procedure performed at an ambulatory surgery center or hospital, provided however, that when calculating the appropriate rate of office-based surgery facility fees, the health plans may also take

into consideration certain comparable and non-comparable costs and obligations of ambulatory surgery centers and hospitals. This recognition under the law and ability to seek certain reimbursements will assure the continued operation of these safe and cost-effective OBS practices thereby maintaining access to affordable, quality care for thousands of patients.

Legislative history

New Bill.

Fiscal implications

None.

Effective date

Immediately provided subdivision 6 of section 230-d of the public health law shall be deemed to have been in full force and effect on and after January 18, 2008.