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

Summary of provisions

Section 1 is a statement of legislative intent that states that the legislature finds it necessary and appropriate to authorize a collective negotiation demonstration to examine the risks and benefits associated with a system of collective action on behalf of health care providers. The legislative intent clarifies that the act is not intended to apply or affect collective bargaining relationships involving health care providers who are employees 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 title to authorizes collective bargaining for independent contractor health care providers including physicians as part of a three year demonstration program in the demonstration service area. This bill would create a system under which the state would closely monitor those negotiations. Any negotiations involving fee-related matters would only be permitted when it is demonstrated that an individual managed care plan controls a substantial share of the managed care market in the demonstration service area. The term 'demonstration service area' is defined to mean the counties of Albany, Columbia, Greene, Orange, Rensselaer, Saratoga, Schenectady, Schoharie, Ulster, Warren and Washington. The Commissioner of Health would be authorized to approve the health care providers' representative request to negotiate based upon the benefits to be achieved for providers and consumers 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 Commissioner of Health, in consultation with the Superintendent of Insurance to approve any final agreement as well as monitor the implemented agreements to ensure continued compliance with the law. Importantly, this legislation would not authorize strikes or concerted action by health care providers in response to negotiations with health care plans.

The Commissioner of Health, after consultation with the Superintendent of Financial Services, shall disapprove the agreement if the agreement would result in a significant increase in costs to the Medicaid managed care, Family Health Plus or Child Health Plus programs.

Section 4 requires the Department of Health, in consultation with the Department of Financial Services to prepare a report on the implementation of the demonstration program on collective negotiation. The report shall be submitted to the governor, the speaker of the assembly and the temporary president of the senate and the chairs of the senate and assembly health and insurance committees at least four months prior to the expiration of this act. The report shall review the extent to which collective negotiations were conducted in the demonstration service area and shall examine whether and the extent to which collective negotiation contributed to the improvement of quality of care for patients, enhanced access to medically necessary care, reduced unnecessary health care expenditures, and was otherwise in the public interest. The report may make recommendations regarding the extension, alteration and/or expansion of these provisions and make any other recommendations related to the implementation of collective negotiation pursuant to this act.

Section 5 provides this act shall take effect 120 days after it shall have become a law and shall expire 3 years after the effective date, provided that the department of health may promulgate and establish any regulations pursuant hereto prior to the effective date.

Justification

Currently, federal antitrust laws prohibit individual health care providers from collectively negotiating any provisions of contracts they sign with managed care entities. This bill would allow health care providers in the demonstration service area 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 in the demonstration controls a substantial share of the managed care market in the demonstration service area.

Giving health care providers greater ability to advocate for patients in contract negotiations is critical because large health maintenance organizations control huge shares of the health insurance market, both in New York and across the country. In 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 (GM/HIP, United/Oxford/Amerchoice, 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 or other health care provider 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 or other health care provider consent; and cede to physicians and other health care providers the legal consequences for patients harmed by health plan utilization review decisions.

This bill, by allowing independent contractor physicians and health care providers to conduct limited collective negotiations in the demonstration service are over a three year period of time while being closely monitored by the state, would give physicians and health care providers in the demonstration service area a 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 in the demonstration service area controls a substantial share of the managed care market. This legislation would prohibit strikes or boycotts of health benefit plans by physicians. The requirement for a study will provide much needed information conceming the impact of collective negotiations on quality of care and fee related matters so that additional consideration can be made concerning whether collective negotiations should be permitted statewide.

Legislative history

New bill.

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 and shall expire 3 years after such effective date when upon such date the provisions of this act shall be deemed repealed, provided that the department of health may promulgate and establish any regulations pursuant hereto prior to the effective date.