Authorizes the Nassau health care corporation to enter into contracts and arrangements providing for the creation and operation of a delivery system network

Summary of provisions

Section one adds a new subsection three to § 3401 of the Public Authorities Law to provide further information regarding the legislative purpose and findings. This provision provides that as a free-standing public health care provider, the Nassau Health Care Corporation (NHCC) is at a competitive disadvantage in the emerging health care environment, which jeopardizes its ability to provide quality health care services to medically underserved populations. Thus, the state authorizes the corporation to engage in collaborative activities consistent with its health care purposes.

Section two adds a new subsection 10 to § 3405 of the Public Authorities Law to clarify that in carrying out its health care purposes, the NHCC may engage in arrangements, contracts, information sharing, and other collaborative activities with public or private entities and individuals including joint ventures and joint negotiations with physicians, hospitals and payors. Such negotiations may result in separate or combined agreements, leases and/or activities involving delivery system network creation and operation that may displace competition and might otherwise be considered violations of state or federal antitrust laws. This provision provides the necessary legislative declaration for the activities of the corporation and of the private entities and individuals with which it collaborates, to be immunized from liability under federal and state antitrust laws. The corporation and its collaborators shall remain subject to generally applicable provisions of the Public Health Law, notwithstanding any provisions herein. The corporation also must file an annual report with the Department of Health concerning the impact of the collaborations authorized under this section and concerning the impact on reimbursement to the corporation's facilities by managed care organizations. The Department shall then have 60 days to request that the corporation make changes to its policies to further the interests of the state.

Section two provides the act shall take effect immediately.

Justification

The NHCC, created under the Public Authorities Law, assumed responsibility for operation of Nassau University Medical Center (NUMC), a general hospital, in September of 1999. Likewise NUMC assumed responsibility for operation of the A. Holly Patterson Extended Care Facility (AHP), a skilled nursing facility and several Community Health Centers (CHCs). All such facilities had previously been operated by Nassau County. NHCC's facilities provide an extensive range of acute care, nursing home, and ambulatory services to an indigent population in Nassau County. NUMC provides more than 50% of

the Medicaid discharges in Nassau County and is the primary provider of ambulatory care to the County's Medicaid and indigent population. As a free-standing public healthcare entity, NHCC faces unique challenges as it seeks to carry out its mission as a safety-net facility. In particular, its ability to collaborate with private entities and individuals is clear in the general and special powers granted to it under Public Authorities Law §§ 3404 and 3405. However, in a recent Supreme Court decision FTC v. Phoebe Putney Health System, Inc, the Court held that in order for state action immunity to apply the state must clearly articulate and affirmative ly express a policy to displace competition. Therefore, NHCC seeks to clarify the state's intention that such collaborations may be carried out regardless of whether they displace competition and may otherwise be considered violations of state or federal antitrust laws.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Immediately.