Establishes health care organization accountability for delay, failure or refusal to approve, provide, arrange or timely pay for certain health care services

Summary of provisions

Section 1. Legislative findings.

Section 2. Adds two new sections to the General Obligations Law. Section 11-108 would make health care organizations (HCOs) responsible for the decisions they make in the provision or denial of care to their subscribers. An HCO, such as an HMO or sponsor of a managed care product, is any entity that approves, arranges for, or pays for health care services. The HCO would be responsible for damages to a patient resulting from a wrongful denial of care or payment for care that it was contractually or legally obligated to provide or cover. An HCO could not require a health care provider to hold it harmless or indemnify the HCO for its share of liability under this section.

Section 11-109, would prohibit an HCO from: a) restricting by contract, a health care provider from filing a complaint or report, or commenting about how an HCO is not providing quality or accessible medical care; b) terminating or failing to renew a provider's contract in retaliation for criticizing an HCO's provision of inadequate medical care; c) providing incentives to a health care provider to encourage the provider to delay, fail or refuse to provide adequate care.

Section 3. Amends Section 1602 of C.P.L.R., to include conforming amendments.

Section 4. Amends Section 4410 of the Public Health Law, to state that the liability imposed by this bill shall not be circumvented by the HMO's claim that its activities cannot be considered the practice of medicine.

Section 5. Severability clause.

Justification

A wide variety of organizations, such as HMOs and certain insurers that operate managed care plans, are integrating the functions of providing and financing the delivery of health care. In doing this, the HMO is in fact determining what care the physician can provide to a plan subscriber. This integration is breaking down traditional distinctions that separated the providers of health care from the entity that paid for this care. Increasingly, payor determinations are governing health care and controlling decisions that in the past were the exclusive domain of health care professionals and patients. This makes it imperative that health care organizations be held fully responsible for the consequences of their decisions, much as health care professionals have been held responsible for the consequences of their decisions. Health care organizations should not be allowed to evade liability by asserting that they do not deny care, and that they merely interpret a contract, which denies payment for care. In fact, by determining what is medically necessary, the HCO is judge and jury with regard to the care a doctor can provide to a patient. Language in the Public Health Law, that HMOs are not deemed to be practicing medic ine, has been cited as meaning that they may not be held liable for practitioner malpractice. This bill would reject that interpretation of the law.

Prior legislative history

S.2463 (2009-10) S.1514 (2007-2008) S.1548-A (2005-2006) S.395 (2003-2004) S.4013 (2001-2002)

Fiscal implications

None.

Effective date

This act shall take effect immediately.