PUBLIC FORUM: REGULATORY REFORM FORUM TO LEARN FROM BUSINESSES AND INDUSTRY EXPERTS WHICH REGULATIONS ARE THE LEAST USEFUL, LEAST COST-EFFECTIVE, AND, THEREFORE, SHOULD BE ELIMINATED

Chief Medical Officer 5 Palladian Health 6 ---oOo--- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 SENATOR GALLIVAN: Good morning, everybody. 2 Thank you for being here today. 3 I am Senator Pat Gallivan, joined by 4 Senator Dave Valesky, Senator Kathy Marchione, and 5 Senator Mark Grisanti, in what is the first of a 6 series of ten industry-specific hearings to focus on 7 regulations in New York State and our regulatory 8 environment. 9 Some of you may have been aware of a recent 10 U.S. Chamber of Commerce "Enterprising States 11 Report" that indicated New York State had the worst 12 business climate in the nation: 50 out of 50. 13 It's no secret, of course, for many of you, 14 and for us, what has gotten us to this point are 15 two areas: taxes and regulations. 16 So we know about the high taxes. We are 17 trying to take those on. 18 Some of our counterparts are actually 19 conducting a series of statewide hearings, looking 20 for ideas on tax reform. 21 One will actually be held in Buffalo in city 22 hall, I believe tomorrow -- 23 SENATOR VALESKY: Tomorrow. 24 SENATOR GALLIVAN: -- at 10 a.m? 25 SENATOR VALESKY: 10 a.m., yeah. 1 SENATOR GALLIVAN: And, of course, you're 2 invited to that as well. 3 But just as burdensome as the taxes in 4 New York, of course, is its regulatory environment, 5 that is tantamount to a death by a thousand cuts. 6 We know of the large regulations that are out 7 there. 8 We know, and we have tried to advocate for, 9 and we had a little bit of improvement this year, in 10 reform in the area of unemployment insurance and 11 worker's compensation insurance, but there are 12 hundreds and thousands of regulations that are 13 outdated, that are duplicative, that increase the 14 cost of doing business, that siphon resources from 15 businesses, that serve as a barrier for entry for 16 new entrepreneurs, and all of them, of course, serve 17 to stifle our economy and cost us jobs. 18 So, we have set out on a goal to take up -- 19 take on this regulatory environment, and our initial 20 goal is to identify and eliminate a minimum of 21 1,000 regulations in New York State that are 22 duplicative, costly, that make absolutely no sense, 23 that are outdated, and that work to stifle our 24 economy. 25 Just to give you an idea how many there are: 1 You say a thousand, and it is quite a task. We have 2 to start somewhere. There are over 80 volumes of 3 regulations in New York State, over 140,000 pages. 4 So we think this is very doable, but in order 5 for us to try to take this on, we often hear in 6 Albany of the large ones. 7 The idea is to delve into your world. 8 In this case, the health-care and 9 medical-technology industries, and get below the 10 surface of those big things that we always hear 11 about. 12 We always, in Buffalo, talk about 13 "silver bullets," so instead of the great big idea, 14 the great big fix, we're looking for your help to 15 delve down into it and identify the things that are 16 bothersome, burdensome, costly, where the costs 17 greatly exceeds the benefits, are outdated, and so 18 on. 19 So I am very excited to take this on. 20 Senator Marchione is the Chair of the 21 Administrative Regulations Review Commission; 22 Senator Valesky is the Chair of the Senate 23 Committee on Commerce, Economic Development, and 24 Small Business; 25 And I am our Conference Leader -- 1 Deputy Conference Leader for Economic Development. 2 The fourth member of our team that will be 3 traveling this state is Senator David Carlucci, from 4 Lower Hudson Valley area, that preceded 5 Senator Marchione as chair of that administrative 6 regulatory review commission. 7 So, we are very anxious to take this on. 8 Senator Grisanti has been very helpful in 9 this effort. 10 We -- originally, when we announced this back 11 in June, put together 14 specific areas for reform. 12 Senator Grisanti was a part of that, and 13 I know committed to trying to help, not just 14 Western New York, but New York State, in that area 15 of economic development. 16 So with that, I will ask all of our members 17 up here just to say a few words, and then we will 18 jump right into this. 19 But, first, I would like to thank 20 Dr. Donald Trump, who is the president -- 21 I always get president and CEO all goofed up. 22 -- of Roswell, who is our host today, and 23 will, ultimately, be our first speaker. 24 So, thank you for hosting. 25 DONALD TRUMP, M.D.: Thank you. 1 SENATOR GALLIVAN: Senator Valesky. 2 SENATOR VALESKY: Thank you, 3 Senator Gallivan. 4 Doctor, thank you for hosting this event. 5 I'm happy to be in Buffalo for today's 6 hearing, and tomorrow's finance hearing on taxes. 7 So, go Bills! 8 [Laughter.] 9 SENATOR VALESKY: And thanks to 10 Senator Grisanti for his hosting of this as well. 11 I won't repeat everything that 12 Senator Gallivan has already gone through. 13 I certainly agree with everything he said. 14 This is an important series of hearings. 15 The first of the series, our timeline is to 16 collect testimony in all industry sectors from folks 17 across the state. 18 We'll then prepare a report, with 19 accompanying legislation that we look to have action 20 on as we head back to Albany for the 21 2014 legislative session in January. 22 The only thing I would mention, from a 23 process perspective, two things: 24 One, we'd ask those of you who are here to 25 testify, we would ask for you to be as specific as 1 possible. 2 Senator Gallivan indicated about a thousand 3 regulations are our target, so please be as specific 4 as possible. 5 I don't think any of us here has health care 6 in our background, so we rely on you to share with 7 us exactly the kinds of regulations that impede you 8 from doing business even better than you already 9 are. 10 The other thing I would just mention is, 11 I think we will have, from most all of you, if not 12 all of you, a written testimony, so please don't 13 feel that you have to read your testimony. 14 We will have that. 15 You can certainly summarize that, and I'm 16 sure we'll have some questions after your formal 17 presentation as well. 18 Thank you all for being here. 19 SENATOR GALLIVAN: Senator Marchione. 20 SENATOR MARCIONE: Thank you. 21 It's an honor for me to be here today with my 22 fellow Senators, and with all of you, as we kick off 23 our statewide regulatory reform hearings in the 24 "city of good neighbors," in the city of Buffalo. 25 I'd also like to thank Roswell Park Cancer 1 Institute for hosting us here today. 2 And before we continue, I'd like to 3 appreciate a moment of silence to remember and 4 reflect on the thousands of our fellow Americans who 5 died 12 years ago in the terror attacks on 6 September 11th. 7 So, if we may have a moment of silence. 8 (Moment of silence observed.) 9 SENATOR MARCIONE: Thank you. 10 Thank you. 11 Of all the laws and rules and regulations, at 12 least 12 miles of red tape, as we just heard 13 Senator Gallivan talk about the 80 volumes, it's 14 nearly enough to reach from Albany to my home in the 15 town of Half Moon. 16 It poses a massive financial burden to our 17 economy; 18 They tangle up private-sector job creators; 19 They stifle innovation; 20 And they force institutions to spend more 21 time with regulatory compliance, and less time 22 finding the next medical breakthrough or providing 23 quality care. 24 The purpose of our forum today is to hear 25 from experts in the field of medical technology and 1 health care. 2 Our goal is not to point fingers or assign 3 political blame. 4 Our one, our only goal, is finding solutions, 5 real solutions; and, in short, we want to hear what 6 Albany can do to stop hurting, and start helping. 7 And we look forward to hearing your testimony 8 today. 9 Thank you. 10 SENATOR GALLIVAN: Thanks, Senator. 11 Senator Grisanti. 12 SENATOR GRISTANTI: Thank you. 13 Good morning, everybody. 14 I want to commend Senator Gallivan, 15 Senator Valesky, and Senator Marchione, and also 16 Senator Carlucci, for doing something that is 17 unprecedented here in the state of New York, in a 18 bipartisan fashion, moving forward to, not only 19 reduce, but eliminate thousands and thousands of 20 regulations that we're going to focus on throughout 21 these hearings in various fields throughout 22 New York State in the coming months ahead, just 23 prior to our next legislative session. 24 It's a great endeavor. 25 I appreciate, also, people that have -- that 1 are going to participate, not only here, but across 2 the state of New York. 3 It's very important to participate, because 4 we're going to find common goals and themes 5 throughout these hearings as they're set up, and 6 that will help us be able to decipher and take out 7 those regulations that are necessary. 8 I know that the four that are part of this 9 coalition legislative effort are going to be 10 pit bulls when it comes to getting rid of this, and 11 as I said, in a bipartisan fashion, so it's going to 12 be very, very easy to get this through the Senate. 13 And I also want to thank Donald Trump for 14 hosting us here. 15 And I want to welcome Senator Valesky and 16 Senator Marchione to the great city of Buffalo. 17 If you have the opportunity, look at all the 18 economic development that's working right here in 19 the backyard, and also down at Canal Side. 20 And Pat's buying hamburgers and all lunch for 21 you at the end, so.... 22 [Laughter.] 23 SENATOR MARCIONE: But thank you for allowing 24 me to be here today. 25 1 SENATOR GALLIVAN: Thanks, Senator. 2 Our first speaker will be Dr. Donald Trump, 3 who is the president of Roswell Park Cancer 4 Institute. 5 And I would just like to congratulate you -- 6 well, first, thank you again; thank you for the work 7 you do, and for hosting us. 8 And, so many people in Western New York, you 9 know that you've touched my family, and so many 10 others, and Roswell is very important to the 11 Western New York community. 12 But I'd like to congratulate you, in that, 13 many people don't know that Roswell Park Cancer 14 Institute was just published on the latest list of 15 "Best Hospitals," by "U.S. News and World Report," 16 as the 41st best hospital out of 902 hospitals 17 that provide cancer care, the specialty care. 18 And that's really a significant 19 accomplishment in helping to put Western New York 20 and New York State on the map. 21 And I know New York State provides a 22 significant investment to Roswell, and it's good to 23 see that it is put to good use; and more 24 importantly, that you're helping to save lives and 25 help people. 1 But, thank you, Dr. Trump. 2 Go right ahead. 3 DONALD TRUMP, M.D.: Well, thank you, 4 Senator, for those kind words. 5 Senators, welcome to Roswell Park. We are 6 happy to have you here. 7 I'd also like to specially thank 8 Senator Gallivan and his staff for organizing this 9 event. 10 We're pleased to host you on the campus, and 11 I do hope you may have an opportunity to tour some 12 of our facilities, talk to some of the clinicians, 13 researchers, and scientists, and to see the 14 Buffalo Niagara Medical Campus, the campus where 15 Roswell Park has been operating for its entire 16 100-plus-year history. 17 Roswell Park Cancer Institute is a cancer 18 research, treatment, and educational facility. 19 We provide care for cancer patients; 20 In our laboratories, we are searching for new 21 cures and new ways to diagnose cancer; 22 And we educate and facilitate the public in 23 preventing cancer through changing behavior and 24 appropriate cancer screening; 25 And, finally, we prepare the next generation 1 of scientists, clinicians, and allied health 2 professionals to care, to understand, and to prevent 3 and cure cancer. 4 As a provider of health care, and a 5 New York State public-benefit corporation, we do 6 deal with a tremendous amount of regulation. 7 And my message today, while perhaps starting 8 a bit provocatively, is important; that is, I would 9 suggest that more common sense would go a long way 10 in mitigating the detrimental effects of a highly 11 regulated environment. 12 In other words, where possible, avoid using a 13 sledgehammer to kill an ant. 14 If something less can achieve the same goal, 15 that's much to be desired. 16 So I would ask that you, as legislative 17 leaders, consider two things in the upcoming 18 session: 19 Think about the implications and 20 implementation before new laws are passed; 21 And make the rule or regulation or law fit 22 the problem. 23 Many well-intentioned solutions can quickly 24 get out of hand when common sense is absent from the 25 equation. 1 "The devil is always in the details." 2 Many times it is not the law or the idea that 3 is flawed, but the implementation. 4 For example, two pieces of legislation that 5 had been introduced and considered by the 6 Legislature, but have not yet become law, are prime 7 examples: The Safe Staffing for Quality Care Act, 8 and the Safe Patient Handling Act. 9 With titles like that, how could you oppose 10 those bills? 11 Clearly, as health-care professionals, our 12 patient safety is of the highest importance. 13 However, the specifics that are in the bills, 14 the requirements, if you will, go further than 15 necessary, in my opinion. 16 As legislators, I respect your roles as 17 leaders and policymakers, to state the need to 18 eliminate injuries that occur due to the movement of 19 patients, and to ensure that we provide a safe, 20 caring environment. 21 But, in turn, please trust health-care 22 professionals to safely staff our facilities and 23 provide appropriate tools to do so. 24 If there are a few bad actors, I'm confident 25 that the capability already exists to address those 1 without imposing an across-the-board legislative 2 solution to staffing patterns or numbers. 3 As far as hospital and clinical operations 4 are concerned, I'm sure you will hear a lot about 5 the Certificate of Need, or, "CON," process, so 6 I will not dwell on this, but suffice it to say, 7 that the playing field needs to be leveled, but it 8 should be done in a way that does -- it should not 9 be done by adding more regulation to parties in the 10 health-care industry, but, instead, be achieved by 11 eliminating some of the burdensome regulations. 12 The Health Care Association of 13 New York State, of which Roswell Park is a member, 14 has raised the issue of duplicative laboratory 15 certifications, and this would be an area where 16 savings could be achieved with no loss of quality. 17 Our clinical laboratories must be inspected 18 by the Joint Commission, which is a national 19 accrediting organization, and New York State also 20 inspects our laboratories. 21 This is duplicative, time-consuming, costly, 22 with little or no added value. 23 Medical licensure could also be significantly 24 streamlined. 25 We have recruited physicians from places such 1 as the Mayo Clinic, the M.D. Anderson, or 2 Memorial Sloan-Kettering Cancer Center, who have 3 been practicing medicine in the United States for 4 20 years but were educated at a foreign medical 5 school. 6 The New York State process for verifying 7 education is long and cumbersome, and largely 8 unnecessary, when you consider that many of these 9 physicians had been practicing in other states for 10 more than two decades. 11 We can offer you more detailed outlines in 12 this regard as your interests dictate. 13 Telemedicine is another important tool in the 14 health-care industry. 15 As technology permeates and makes 16 telemedicine more accessible, our laws and 17 regulations need to keep pace. 18 In an "Institute of Medicine" report recently 19 issued, "Delivering High-Quality Cancer Care: 20 Charting a New Course for a System in Crisis," this 21 report just released yesterday, notes that the 22 anticipated oncology workforce shortage in the face 23 of a growing demand for services. 24 Telemedicine is one way to address this 25 shortage. 1 Currently, there are rules and regulations in 2 New York that prohibit our physicians from providing 3 care by telemedicine to a patient in another state, 4 unless the physician is licensed in that state. 5 Another issue that is especially difficult 6 for cancer patients, is the requirement by some 7 Medicaid managed-care plans to obtain specialty 8 medication from CVS Caremark in Connecticut. 9 Using a pharmacy company out of 10 New York State delays our patients getting 11 medications in a timely fashion. 12 It seems that utilizing a special pharmacy -- 13 a specialty pharmacy in New York State would address 14 two issues: Keeping New York State Medicaid dollars 15 in New York State; and providing business to 16 New York State companies, business that is likely to 17 be delivered on a more timely basis. 18 I know there are companies in the state, and 19 in our region, who can provide these services. 20 When the Public Authorities 21 Accountability Act was passed in 2009, the goals 22 were transparency and accountability. 23 As a taxpayer, I can't argue with those 24 goals; however, this falls into the category of a 25 universal solution that does not quite fit every 1 instance. 2 Roswell Park Cancer Institute, as I said, is 3 a public-benefit corporation, but in accounting 4 standards, we are a public health-care facility, so 5 our financial reports must follow the rules of full 6 accrual accounting. 7 The Public Authorities' budget office is 8 looking for standardization, but the accounting 9 methods that apply to our business are not the same 10 that are required in the ABO reporting. 11 So when we submit our year-end financial 12 reports and budget to the ABO, we have to pay 13 accountants to transform our financial statements 14 into the accrued accounting method; therefore, the 15 public information reported by Roswell Park does not 16 resemble the reality of our public accounting -- or, 17 our accounting methods and distorts the intent of 18 the public disclosure. 19 I'm sure you will hear this in other venues, 20 but the Triborough Amendment to the Taylor Law, 21 which provides for the continuation of 22 bargaining-agreement provisions after expiration, 23 and prior to the ratification of a new agreement, 24 does cause challenges. 25 There are unique circumstances at 1 Roswell Park that are nonetheless challenging. 2 Since our employees are members of the 3 statewide public employees unions, the contracts are 4 negotiated in Albany by the Governor's Office of 5 Employee Relations and the statewide union 6 leadership. 7 It would be beneficial to have more autonomy 8 in collective bargaining for institutions, such as 9 Roswell Park, by revising this aspect of the 10 Public Authorities law. 11 Roswell Park currently offers a voluntary 12 defined contribution plan to some employees. 13 We would like to expand that benefit to 14 others. It would be more portable, and would reduce 15 New York State pension costs. 16 There is an Assembly bill, A1587, which would 17 repeal the Wage Theft Prevention Act. 18 While complete repeal might be something you 19 would like to examine in particular, we would like 20 to see the annual wage notification, which is 21 required by New York State Labor Law, Section 195-1, 22 to be repealed. 23 This is an administrative burden that 24 requires our research employees to sign off on their 25 salary in a separate exercise every year. 1 With respect to Civil Service Law, 2 Section 71, and 73, we would like to see revisions 3 so that the amount of leave would be based on the 4 degree of disability and the likelihood of the 5 employee returning to work. 6 A couple of years ago, there was a 7 significant worker's compensation reform, but one 8 item that might need to be revisited would be 9 Section 25: the employee payments and degree of 10 disability table outlined in the 11 worker's compensation reform and legislation. 12 It is complicated, costly, and incentivizes 13 employees to remain out of work. 14 These are a few of the items we'd ask your 15 consideration. 16 I very much thank you for your time and 17 efforts in trying to create a better climate for 18 business in New York State. 19 And I, of course, would like to answer any 20 questions, and make more information available on 21 any important points your staff might need. 22 Thank you very much. 23 24 25 1 SENATOR GALLIVAN: Thank you very much, 2 Doctor. 3 If I may, and this is -- will be for 4 everybody testifying, if you have copies of your 5 written testimony, if you could get them to us in 6 advance -- well, you know, before you start 7 speaking. And if you don't, if we could make some 8 copies before you leave. 9 And then the other thing is, you brought up a 10 point I didn't mention before, Dr. Trump, but the 11 follow-up; if we make sure we have contact 12 information for the appropriate person, to 13 follow up, and get a grasp on this. 14 I only have one question that I had wanted to 15 ask about: The Certificate of Need regulations. 16 They were supposed to change, I think, in 17 early 2012. 18 My question is: Did that happen, and was it 19 helpful? 20 UNKNOWN FEMALE SPEAKER: There has been some 21 change. It's still in process, but now they're 22 look -- actually, what -- what some of the things 23 that are being looked at is, instead of lowering the 24 burden that exists on Article 28 facilities, is, 25 perhaps, extending those provisions to other 1 facilities. 2 And that's not necessarily a great solution. 3 There does need to be a leveling of the 4 playing field, because it is very unlevel right now, 5 but, that might not be the best approach. 6 And, especially, it would be a concern of 7 Roswell Park, and facilities, institutions, because, 8 you know, how do you account for the system that 9 already exists out there, and then you start doing 10 some regulation? 11 So, I could get into more details on that, 12 but there's concern about that. 13 SENATOR GALLIVAN: Thank you. 14 Dave? 15 SENATOR VALESKY: Thank you. 16 Just to thank you for being as specific as 17 you were. 18 Some of these are issues that we hear, that 19 cross over all disciplines; some are specific to 20 health care. 21 The one point I would just make, the 22 wage theft issue, I know you gave an Assembly bill 23 number. 24 We've actually passed that in the Senate a 25 couple of times, and actually have tried to get that 1 into the budget process, and we've had, to this 2 point, difficulty convincing the Assembly to join 3 us. 4 So with your support, hopefully, we'll be 5 successful in the new session. 6 DONALD TRUMP, M.D.: We'll do all we can do 7 to help you. 8 SENATOR VALESKY: Thank you. 9 SENATOR GALLIVAN: Senator Marchione? 10 SENATOR MARCIONE: Doctor, thank you for 11 being so specific. 12 This was exactly what I wanted to hear, is, 13 just, so many different parameters of what's making 14 it tough for you here. 15 I also had questions on Certificate of Need, 16 so thank you for answering those. 17 Just another question: What are your 18 thoughts concerning the Affordable Care Act and the 19 regulations that are forthcoming? 20 Do you have any opinion that you would like 21 to share with us on that? 22 DONALD TRUMP, M.D.: The precise way in which 23 those -- the Affordable Care Act will affect 24 institutions like Roswell Park, I think, is still in 25 evolution. 1 I think the advantage of the 2 Affordable Care Act is that it will make care more 3 widely available. 4 We know for sure that cancer mortality has 5 been enhanced by the lack of available care, 6 screening -- access to screening procedures, and 7 appropriate care. 8 So, I also know for sure that our current 9 system of health care is unsustainable at its 10 current rate of growth in costs. 11 So, we're working hard, with partners in our 12 community, with the payers, with our patients, to 13 (a) understand what the impact will be, and to try 14 to assure that care at Roswell Park continues to 15 enhance its quality and be as affordable and most 16 value-based as possible. 17 SENATOR MARCIONE: Thank you. 18 SENATOR GRISTANTI: I have nothing. 19 SENATOR GALLIVAN: Thank you, Dr. Trump. 20 DONALD TRUMP, M.D.: Thank you very much. 21 SENATOR GALLIVAN: Our next presenter is 22 James Kaskie, who's the president and 23 chief executive officer of Kaleida Health. 24 Kaleida is the largest health-care provider 25 in Western New York. 1 We appreciate you being here. 2 And I would just also make a note, like 3 Roswell, Women's and Children's Hospital, which is 4 part of Kaleida Health, was also recognized on the 5 latest list of "Best Hospitals," published by 6 "U.S. News and World Report" magazine, one of the 7 top 50 in the entire country. 8 And we congratulate you for that. 9 And, of course, thank you for your efforts 10 for what you do here. 11 You're part of the growth. 12 This is -- the medical campus here is, of 13 course, one of the success stories in 14 Western New York, and across New York State, and 15 it's exciting to be a part of it. 16 But, we appreciate you being here. 17 JAMES KASKIE: Senator, I'm very honored to 18 be here, and I thank you for each and every one of 19 your support of our effort to serve the community. 20 Good morning, my name is Jim Kaskie. I'm the 21 president and chief executive officer of 22 Kaleida Health, the largest provider of health-care 23 services and largest employer in Western New York. 24 And on behalf of the 10,000 employees, and 25 1 million people we serve each year, thank you for 1 the opportunity to speak. 2 I also serve in the unique role as the 3 president and chief executive officer of 4 Great Lakes Health System of Western New York, which 5 is the organization bringing ECMC and 6 Kaleida-University of Buffalo School of Medicine and 7 other partners together to really build centers of 8 excellence, and translate unnecessary duplication 9 and competition into collaboration, to create 10 centers of excellence and improve services to the 11 community. 12 First of all, I want to commend the 13 Senate Majority Coalition for the task at hand. 14 Your leadership, vision, planning, will, hopefully, 15 lead to meaningful reform. 16 Eliminating costly regulation and unnecessary 17 bureaucracies is good government; more importantly, 18 it can drive growth and improve our economy. 19 We certainly know Western New York can 20 benefit from this type of reform. 21 We all know that we are living in very 22 challenging times; however, each of us must assume a 23 leadership role, to work together, to find 24 thoughtful, balanced solutions to the fiscal 25 problems and regulatory challenges facing our state, 1 and, us as employers and providers of health-care 2 services. 3 Therefore, our organizations, Kaleida Health 4 in particular, is committed to being part of the 5 solution. 6 We are willing to work with the 7 Majority Coalition and the State if you need a 8 demonstration site to test reforms. We stand ready 9 to work with you to implement any regulatory relief. 10 We are an organization that has stepped 11 forward to take what we have, which is very good, 12 and make it better for the people of 13 Western New York. 14 For example, during the Berger Commission, 15 Kaleida Health openly supported the reform agenda. 16 The result: 17 In Western New York, we're closing outdated 18 facilities, we're consolidating others, building 19 new, and creating a more efficient delivery system; 20 We're partnering with public and private 21 entities to create a better health-care system; 22 We're working collaboratively to better serve 23 our community. 24 But more reform is needed. 25 As a member of the Greater New York Hospital 1 Association -- 2 And by the way, I was recently appointed and 3 installed as chair of that association. 4 -- we represent over 215 not-for-profit 5 voluntary public hospitals and long-term-care 6 facilities. 7 Kaleida Health supports the reform agenda of 8 the Greater New York Hospital Association that's 9 been advanced over the years, to reduce hospital 10 regulatory burdens, as well as the high cost of 11 doing business. 12 With year-after-year budget cuts coming out 13 of Albany and Washington D.C., many 14 financially-strapped hospitals cannot continue to 15 provide the high-quality care to all residents 16 throughout the state without some relief in sight. 17 So I'd like to spend a few minutes on 18 three areas where I believe focus of the reform 19 agenda is most pertinent and most appropriate. 20 So, when you consider your upcoming New York 21 legislative session, we'll work together with you to 22 advance the follow proposals: 23 To provide hospitals and physicians relief 24 from the high cost of medical malpractice coverage 25 by advancing meaningful tort-reform proposals, such 1 as expanding the 2011 Medical Indemnity Fund, the 2 "MIF" as we've come to know it, to cover the future 3 medical costs of all neurologically impaired 4 individuals, not just neurologically impaired 5 newborns, and preventing the passage of other bills 6 that would increase medical-malpractice premiums, 7 such as extending New York's current statute of 8 limitations for malpractice cases. 9 The second area that I will be discussing, is 10 to implement the New York State Public Health and -- 11 Health Planning Council's recommendations, part of 12 your "Certificate of Need" questions for Dr. Trump, 13 recommendations that would further streamline 14 New York State's Certificate of Need process and 15 program by eliminating construction projects from 16 CON review, regardless of cost, unless such projects 17 include detailed cost-drivers or limited access or 18 rationalized character and incompetence reviews of 19 new operators and board members. 20 The third area is, Greater New York and 21 Kaleida Health have strongly opposed two extremely 22 costly nursing workforce bills that are being 23 suggested. 24 One is, the mandate to minimum nurse-patient 25 staffing ratios, which has not been proven to 1 improve patient outcomes; 2 And, secondly, the requirement of health-care 3 facilities to implement a very onerous 4 one-size-fits-all safe patient-handling program. 5 Kaleida Health's own safe-handling program 6 has been extremely effective and successful, but 7 this should be a choice for an organization, not a 8 mandate, particularly not an unfunded mandate. 9 So let me develop these a little bit further. 10 With regard to malpractice reform: 11 Regarding malpractice in New York State, as 12 much as 10 percent of our non-operating budget comes 13 from the high cost of medical-malpractice coverage. 14 Collectively, New York hospitals pay more 15 than 1.6 billion annually in medical-malpractice 16 costs, some of the highest in the country. 17 The high costs, over time, have pushed most 18 commercial insurance carriers out of the market, and 19 have forced many institutions to be self-insured or 20 go without insurance at all. 21 Not surprisingly, these patterns and these 22 trends have many physicians very nervous; and, 23 therefore, practicing, very much, defensive medicine 24 in order to avoid malpractice litigation, which 25 further adds to the overall cost of health care. 1 Furthermore, in New York, the severity 2 awards, that is, the dollars that are awarded from a 3 judgment, including some -- includes some of the 4 largest jury awards in the nation here in our state. 5 And this, too, has substantially driven 6 unnecessarily high costs of medical-malpractice 7 coverage and experience. 8 It is very important to note, that on the 9 good news side, is the number of claims against 10 hospitals has leveled off, and in some areas and 11 cases, are declining. 12 And I believe it's the industry's response to 13 working to ensure a safe environment, and to do 14 everything possible to ensure patient safety at all 15 times. 16 But it's important, that while hospitals have 17 undertaken patient-safety efforts and have been 18 successful in reversing adverse events, we have that 19 clear experience within Kaleida, there is not often 20 an immediate associated reduction in our costs or 21 our premium because, as you know, there's a lag time 22 for these types of trend lines to adjust, so it 23 takes years to recover these costs. 24 So if we don't interrupt them now, we are 25 going to be facing trend lines into the future of 1 significant cost burdens. 2 The second area, with regard to Certificate 3 of Need reform: 4 New York needs to take the steps necessary to 5 implement the June 2012 recommendations from the 6 Public Health and -- the Public Health and Health 7 Planning Council, that -- with respect to 8 streamlining the state's Certificate of Need 9 program. 10 In particular, the Legislature must amend 11 state law to eliminate CON review of construction 12 projects. 13 As I said earlier, regardless of cost, except 14 to the extent that a project may involve certain 15 specified cost-drivers or they somehow curtail 16 access to care. 17 Examples of construction projects that no 18 longer would be subject to review under the 19 Health Planning Council's recommendations are 20 physical plant modernizations and reconfiguration 21 projects, such as renovation of rooms to convert 22 double rooms to single rooms, or consolidate 23 programs into a single facility. 24 The rationale, is that there are many market 25 forces and other ways that limit our investment, and 1 we make appropriate investment choices. 2 And, so, when we do construction projects, 3 many of these, we don't believe, are necessarily 4 subject to the types of certificate-of-review 5 burdens under present law. 6 So these types of projects would continue to 7 be -- other projects that do limit access, and do 8 change services and programs, would be subject to 9 Certificate of Need. 10 In addition, to guard against potential 11 increase and unnecessary Medicaid spending by 12 eliminating Certificate of Need reviews for the 13 projects, the Health Planning Council and 14 Department of Health is in a position to monitor the 15 Medicaid spending. 16 The Department of Health is also in the 17 position to conduct financial reviews of projects 18 proposed by providers that cannot meet certain 19 financial benchmarks, to guard against destabilizing 20 their future ability. 21 The State will continue Certificate of Need 22 reviews under this reform with regard to certain 23 aspects and projects that increase costs or affect 24 access, such as, adding new equipment, decertifying, 25 re-purposing beds, new extension sites, changing 1 emergency department, surgery capacity, or adding 2 complex major new medical equipment or services, 3 replacing or relocating facilities, closing 4 facilities, and doing other things that 5 fundamentally change the capacity or the delivery 6 profile of an organization. 7 We urge, however, that aspects of the 8 projects that remain subject to CON be narrowly 9 drawn down to provide meaningful reform and 10 streamlining. 11 The re-purposing of a small number of beds as 12 part of a large renovation project, should add only 13 to the re-purposing of beds, and not to the entire 14 construction project for Certificate of Need. 15 So, narrow the review, narrow the focus. 16 In addition, the Health Planning Council's 17 approved a recommendation to rationalize the way in 18 which the State undertakes character and competence 19 review as the process for establishing a new 20 health-care facility or certain new services. 21 We strongly support the need for improving 22 the process, which is currently applied in a 23 regimented way, and a way that can deter qualified 24 experienced board members from being part of our 25 organizations and serving on our -- with serving 1 with our organizations, are part of these new 2 enterprises. 3 In particular, current state public law 4 requires the State to affirmly find, by substantial 5 evidence, that substantially consistent high level 6 of care is being rendered in each such hospital or 7 institution, and they'd have a 10-year look-back. 8 These are areas that need to be reviewed, and 9 modified and reformed. 10 The last point is on the nursing-staffing 11 ratio areas, as well as the patient safe handling. 12 With regard to the nursing-workforce issues, 13 Greater New York Hospital Association, 14 Kaleida Health, oppose legislation that would 15 require hospitals and nursing homes to implement 16 unit-specific minimum registered-nurse-to-patient 17 ratios. 18 The prescribed nurse-to-patient ratios would 19 need to be adhered to, as we read the proposed 20 legislation, at all times, but they fail to 21 recognize that patient care in our hospital settings 22 is delivered optimally by a team of skilled 23 professionals; and, in part, the nurse is a very 24 critical member, and oftentimes leader of such team. 25 But this is a team process, not one 1 individual group with mandated staffing ratios. 2 This multidisciplinary team approach has 3 proven effective in ensuring the highest quality of 4 care for our patients, and is the future of the 5 hospital health-care delivery systems. 6 Implementing nurse-to-patient staffing ratios 7 would cost New York State's financially-challenged 8 voluntary and public hospitals, we believe, at least 9 $2 billion annually, and would require us to hire, 10 over the state, some 20,000 new nurses, an unfunded 11 mandate that would certainly force hospitals to lay 12 off other staff and interrupt this team process. 13 You can look to California and find that this 14 isn't working. 15 The other nursing-workforce bill is the one 16 that requires the task force and the New York 17 Department of Health to define the elements of 18 comprehensive safe-patient handling. 19 And this would be an expectation that would 20 be implemented in all health-care facilities with 21 specific staffing and equipment requirements. 22 Greater New York Hospital Association and 23 Kaleida Health support the concept of safe patient 24 handling. 25 Our program is very successful; however, we 1 have very significant concerns about the bill's 2 prescriptive requirements and unfunded mandates. 3 We support the Greater New York Hospital's 4 efforts to continue discussion with the key 5 legislative staff, or unions that represent nurses 6 and direct-care staff, and legislative leaders, to 7 reach a consensus on the best approach for 8 implementing a policy around safe patient handling. 9 So, in conclusion, I thank you for the 10 opportunity for me to speak specifically to these 11 three. 12 There are many more issues we can speak to, 13 but I think these are the three priorities. 14 And, we also will provide, as part of my 15 testimony, the full legislative agenda for the 16 Greater New York Hospital Association, which covers 17 many other areas of suggested reform. 18 And, we stand ready, I personally, the 19 organization, and in my role with Greater New York, 20 to assist in any way that we can to advance the 21 reform agenda. 22 Thank you for the opportunity. 23 24 25 1 SENATOR GALLIVAN: Thank you. 2 I have one question about Certificate of 3 Need, again. 4 With your recommendation, how would the 5 process stack up against the rest of the country, 6 New York State's process? 7 Not where it is today, but even if it 8 implemented your regulation -- or, I'm sorry, your 9 recommendation? 10 JAMES KASKIE: I would not represent myself 11 as an expert in the Certificate of Need status 12 across the country in 50 states, but we do know 13 there's great variety and variation amongst the 14 states. 15 Some don't have any at all, and others have 16 very tailored. 17 I think these are more consistent with the 18 states that I'm familiar with, that have done 19 targeted reform to narrow the review. 20 Keep it in place, so that you have -- you 21 prevent unnecessary duplication of equipment, you 22 rationalize some of the services and programs, but 23 at the same time, you give flexibility to routine 24 investments in property, plant, and equipment. 25 So I think we -- the recommendations that I'm 1 suggesting here, and with the Greater New York 2 Hospital Association, are more consistent with those 3 more contemporary reformed agendas, versus, the 4 level of review and the detailed review of our 5 current Certificate of Need. 6 And I don't know of others that have 7 look-back provisions and other kind of extra 8 regulatory steps that ours has. 9 Seems that we are overregulated in this area. 10 SENATOR GALLIVAN: Thank you. 11 SENATOR MARCIONE: Just one. 12 I've heard you talk a lot about legislation 13 relative to nursing, and I wondered: There's 14 recommendations -- there are recommendations to 15 allow nurse practitioners to expand primary-care 16 responsibilities that are in line with physicians. 17 What do you think about those expanding 18 nurse-practitioner roles with regard to physician 19 roles? 20 JAMES KASKIE: Yeah, I think the nurse 21 practitioners, physicians assistants, what we would 22 typically refer to as a group of "mid-level 23 professionals," are essential to the delivery of 24 health care. 25 They are purely -- they are really seen as 1 extenders of the care-delivery model. They improve 2 access, they improve service. 3 And we, for example, across Kaleida, probably 4 employ 100 to 120 nurse practitioners. 5 We work with our physicians with their own 6 nurse practitioners and physician assistants. 7 So I think it's a critical element of the 8 workforce, back to my concept -- my suggestion that 9 this is a team process of how we deliver care. 10 Nurse practitioners are an essential member 11 of that team. 12 I think we have to always be careful, and we 13 need very good, deliberative, inclusive dialogue 14 about, What is the scope of practice? 15 There are levels of training and education 16 and expertise and experience that nurse 17 practitioners have. They're not equal to a 18 physician who's, not only completed medical school, 19 but full residencies and fellowships, so there has 20 to be some gradation. It can't be equivalent. 21 And I think it's a matter of working with 22 individuals around the table. 23 And as an example, we would be happy to help 24 in spearheading those dialogues about, What is the 25 right delineation of privileges and duties within 1 that field? 2 SENATOR MARCIONE: Thank you. 3 SENATOR GALLIVAN: Senator Grisanti? 4 SENATOR GRISTANTI: Thanks, Senator Gallivan. 5 Jim, how you doing this morning? 6 JAMES KASKIE: Doing great, thank you. 7 SENATOR GRISTANTI: Good to see you. 8 You know, it's interesting because, in fact, 9 Kaleida has instituted the safe patient-handling 10 program in-house. 11 Do you have specifics as to what was done, 12 and why it works so well for your facility, that 13 could possibly be implemented into other facilities? 14 I mean, I know there's got to be a cost in 15 workman's-compensation savings. I think there's -- 16 that's been told to me, and other things. 17 I mean, what specifically is why it works for 18 you there? 19 JAMES KASKIE: Great question. 20 And we do have a very specific experience, 21 and I can speak in generalities -- 22 SENATOR GRISTANTI: Okay. 23 JAMES KASKIE: -- and we can provide a 24 specific case study to you. 25 And I think our case study demonstrates that 1 programs in safe patient handling are very 2 effective, first of all, for the patient. 3 The level of incidents are down. 4 Falls; slippage; the ability to turn and 5 rotate patients, to prevent skin breakdown; all of 6 those kind of aspects are clearly better as a result 7 of safe patient handling. 8 And then, as far as our own employees and 9 their ability to handle patients, it's clearly an 10 asset that allows them to move without risk of 11 injury, particularly in some of the areas where we 12 face a high level of obesity, are very difficult to 13 mobilize patients. 14 But the challenge, though, and the gap here 15 is, it is very good in principle, but you just can't 16 say that's the right thing to do, without 17 recognizing how much of an unfunded mandate that 18 could be. 19 So, for example, about five years ago, when 20 we instituted this program, we invested in the range 21 of 10 to 18 million dollars, because we bought new 22 beds with electronic scales, we did lifts, we did 23 all kinds of that. 24 We invested additional millions of dollars in 25 training, and, we have maintained the program, and 1 we have leaders in training and safe patient 2 handling. 3 But the problem with that is, if you just 4 mandate it, that's a lot of money. 5 SENATOR GRISTANTI: Right. 6 JAMES KASKIE: We did reduce worker-comp 7 experiences, we did reduce it back to the safer 8 environment, so it was effective, but, it is very 9 expensive. 10 And we just demonstrated, given some of the 11 challenges we have with the population that we 12 serve, and the complexity of the patients that we 13 care for, that this was one of the things that we 14 needed to make a choice, an institutional choice, 15 about investing in. 16 And -- but I don't necessarily say that 17 that's a requirement for everyone, but they should 18 go through a process. 19 And that's why we're interested in having the 20 dialogue about, how do you assess your ability and 21 capacity to implement this kind of a program, versus 22 just passing laws to do it? 23 SENATOR GRISTANTI: And it kind of goes along 24 with what was talked about earlier, I think, by 25 Dr. Trump, is, you know, look at what the 1 consequences, or what can happen, you know, by 2 implementing certain laws without seeing what could 3 happen in the future. 4 But for Kaleida itself, you took it upon 5 yourself several years back to go ahead and make an 6 investment in new beds and lifts, so on and so 7 forth. 8 You saw that it has, basically, worked, to 9 some capacity, but to instill that maybe on another 10 hospital would be an extreme cost, and a mandate, as 11 you said. And, it should be a choice if you have 12 the funding available. 13 Is it possible to also get that provided to 14 us, as to what the studies have shown, or what you 15 have seen, by doing that type of movement with the 16 safe patient-handling program? 17 JAMES KASKIE: We certainly can. 18 And it's a continuing investment. It's just 19 not that one-time investment. 20 It's probably a program that costs us a 21 couple million dollars a year to run. 22 SENATOR GRISTANTI: Okay, I appreciate that. 23 Thank you very much. 24 And, again, thanks for coming here today as 25 well. 1 SENATOR VALESKY: Mr. Keskie, I wasn't going 2 to ask you a question, but I do want to return to 3 your top issue. 4 And the reason why I do that, is I happen to 5 be serving in my ninth year in the State Senate now, 6 and it seems that, whether I'm talking to my 7 hospitals in Central New York, hospital CEOs, or 8 anywhere across the state, the issue of 9 medical-malpractice reform is always on a list 10 somewhere. Sometimes number one, sometimes two or 11 three, but always near the top of that list. 12 And we've had, over the years, in my 13 relatively short time there, there have been fits 14 and starts, I guess, in Albany toward major reform. 15 2009 -- '08, '09, in that ballpark, 16 certainly, your organization was at the table at 17 that time. 18 2011, as you indicate, the medical indemnity 19 fund that we did. 20 I guess the question is: What, in your 21 opinion -- 22 And I see you have 10 percent of your 23 hospital's non-operating budget, that's high, and 24 there are other hospitals that are even higher. 25 I mean, what is it really going to take, from 1 your opinion, to make a significant difference 2 beyond simply, I understand, preventing other 3 legislation from passing, which is certainly 4 something that we all have an opportunity to weigh 5 in on? 6 Or, is this going to be a reality that, in 7 this state, for all sorts of reasons, reform is 8 always going to be on the edges? 9 Am I explaining myself? 10 JAMES KASKIE: I don't know if I can speak 11 to -- in this state, reforms on the edges, because 12 I think there are political forces for and against 13 this. 14 SENATOR VALESKY: Correct. 15 JAMES KASKIE: Let me start with, at times, 16 bad things do happen. 17 Sometimes they're by no fault. They are a 18 convergence of untoward events. 19 Sometimes there is an issue of misjudgment, a 20 difficult practice applied, so that there can be an 21 injury for which there needs to be compensation. 22 So one of the issues is, we cannot hide from 23 any ownership that we have, and the fact that we are 24 taking care of people. 25 We have a responsibility to do that in a safe 1 and high-quality manner, and that we are subject to 2 scrutiny as a result of that. 3 So, I think the first thing is a recognition 4 that it's not necessarily adversarial, but it's 5 determination of, Is this an untoward, unexpected, 6 sometimes even unrelated? 7 It could be an individual bringing in a very 8 complicated social circumstance, drug addiction, or 9 something, that results in a very challenged 10 newborn, that has nothing to do with care that's 11 delivered, for which, then, there's malpractice 12 pursuit. 13 So, that -- having a process to separate that 14 question first is important. 15 I think the second is, to have an informed 16 judiciary system that is informed as to what's 17 reasonable. 18 There's pretty good science around 19 understanding, you know, the consequences supporting 20 someone who's had an injury, in terms of medical and 21 custodial needs; but at the same time, there needs 22 to be a reasonableness about the consequence of 23 injury, the severity of injury, whether injury 24 really was, as I said, a cause that was effected, or 25 a cause that was coincidental. 1 And I think the third is, that there needs to 2 be some process of moderating the jury award, full 3 latitude -- some caps, some guidelines, some 4 protocols -- so that there can be some logic around 5 some of the award levels that relate, versus, just 6 someone's feeling about their response or their 7 personal experience, or whatever it might be. 8 So I think those three areas of, really: 9 Having a process to determine cause and 10 effect; 11 A process to have an informed -- 12 a better-informed judiciary process; judges who 13 understand the complexities of medical malpractice, 14 medical incident, a medical provision, versus, you 15 know, the pursuit of the experts; 16 And then, I think, some sort of moderated 17 jury process that determines what appropriate awards 18 are, if they are necessary. 19 SENATOR GALLIVAN: Thank you. 20 SENATOR MARCIONE: Thank you. 21 SENATOR GALLIVAN: Thanks, Jim. 22 JAMES KASKIE: Senator, thank you. 23 SENATOR GALLIVAN: Should a follow-up be with 24 Mike? 25 JAMES KASKIE: Well, we have packets for you, 1 with Mike's cards in it. 2 And you know I'm available any time you call. 3 And thank you again for all of your support, 4 and thank you for the special recognition of 5 Children's. 6 We're very proud here in Western New York 7 that we're nationally ranked. 8 Our cardiac program is three-star nationally 9 ranked. 10 So, it's -- the stroke program is the largest 11 in the northeast. 12 So, we're very proud of what we're being able 13 to do here in Western New York. 14 And thank you for your help, over the years, 15 with Berger, and everything else. 16 You've made a difference for us. 17 SENATOR GALLIVAN: Thanks, Jim. 18 JAMES KASKIE: Thank you. 19 SENATOR GALLIVAN: Our next presenter, from 20 the Medical Society of Erie County, Tom Madejski. 21 Tom, did I pronounce it right? 22 THOMAS MADEJSKI, M.D.: [Inaudible.] 23 SENATOR GALLIVAN: I'm sorry. 24 THOMAS MADEJSKI, M.D.: I'm actually from the 25 Medical [inaudible]. 1 SENATOR GALLIVAN: Oh, okay. 2 THOMAS MADEJSKI, M.D.: I have with me -- 3 SENATOR GALLIVAN: The Medical Society of the 4 State of New York, 8th District? 5 THOMAS MADEJSKI, M.D.: Yep. 6 SENATOR GALLIVAN: Got you. 7 THOMAS MADEJSKI, M.D.: And I have with me, 8 Christine Nadolny, who's the executive director for 9 Erie County and the 8th district. 10 SENATOR GALLIVAN: Got you. 11 Pronounce your last name for us, one more 12 time. 13 THOMAS MADEJSKI, M.D.: The "J" is like a 14 "Y." "Madejski." 15 SENATOR GALLIVAN: Thank you. 16 THOMAS MADEJSKI, M.D.: You're welcome. 17 SENATOR GRISTANTI: And how do you say your 18 last name? 19 CHRISTINE NADOLNY: Nadolny, N-A-D-O-L-N-Y. 20 SENATOR GRISTANTI: Thank you. 21 SENATOR GALLIVAN: When you're ready. 22 THOMAS MADEJSKI, M.D.: Good morning. 23 And I think you already know my name, but I'm 24 Dr. Tom Madejski, and I'm an internist in Medina, 25 New York, and the assistant treasurer for the 1 Medical Society of the State of New York. 2 I appreciate the opportunity to testify on 3 behalf of the physician community regarding the 4 ever-increasing administrative burden we face, as a 5 result of state mandates, in attempting to deliver 6 care to our patients. 7 We look forward to continuing dialogue with 8 you to eliminate or lessen these burdens. 9 I think it's important to remind the panel, 10 and I believe they understand that, that New York is 11 an increasingly difficult state in which to deliver 12 care to our patients, your constituents. 13 This is due to a confluence of a number of 14 factors, which have also been alluded to by 15 Mr. Kaskie recently, including its extraordinarily 16 high liability-insurance costs as compared to other 17 states; at the same time that the insurance industry 18 continues to impose roadblocks to delivering patient 19 care through the continued reduction, denial, and 20 delay of payment for necessary care previously 21 delivered. 22 We, as any other small business, also face 23 ridiculously high tax burden and ever-increasing 24 overhead costs. 25 State government, legislative, and regulatory 1 mandates significantly add to our burden, and take 2 time away from delivering patient care. 3 These problems must be considered and 4 addressed as policymakers hope to assure an adequate 5 health-care safety net for the hundreds of thousands 6 of New Yorkers who will likely be obtaining 7 health-insurance coverage for the first time through 8 the state's health-insurance exchange. 9 Recently, MSSNY conducted a survey of over 10 800 physician respondents to gauge physician 11 perspectives of a variety of issues relating to 12 New York State's health-care delivery system. 13 Over one third of the respondents indicated 14 that they were seriously considering retiring from 15 practice in the next two years, and over 37 percent 16 indicated that they plan to reduce the services they 17 deliver over the next two years. 18 We'll provide you with additional information 19 on that separately. 20 The study showed that only 35 percent of 21 physicians would affirmatively recommend to their 22 children or younger family members that they become 23 physicians, and only 22 percent of physicians would 24 affirmatively recommend to medical students that 25 they practice within New York State. 1 That is chilling. 2 Some of the comments to the survey are 3 particularly telling about physicians' concern 4 within New York State. 5 A Rochester internist stated, "Help! We are 6 all drowning in administrative insurance-regulatory 7 hassles. Overhead has doubled since I started 8 practice in 1993. As a primary-care physician, 9 there is no way to continue in this environment." 10 In Buffalo, another internist noted, 11 "With the increasing intrusiveness of government and 12 third-party payers into the practice of medicine, 13 I am asking myself why I went to medical school. 14 "The third-parties seem to think they know 15 more about the practice of medicine than I do, yet 16 they are not exposed to liability or review as I am. 17 "My principal obligation should be to care 18 for my patients, not doing the bidding of government 19 as an I-STOP, or justifying my thought processes to 20 an insurance company to get a medication or a 21 diagnostic image." 22 A Syracuse allergist added, "Government 23 mandates are a drag on the practice of medicine. 24 They take time out of the practice. 25 "A perfect example is the I-STOP law: 1 cumbersome, time-consuming; a perfect example of 2 government creating a fix that looks like it is 3 addressing problem, while, in reality, creating a 4 whole new set of problems." 5 Another Syracuse physician noted, "For every 6 hour in the office actually seeing patients, 7 I have to spend 30 to 45 minutes doing 8 administrative work. 9 "As soon as I am financially able, I hope to 10 retire and donate my time." 11 A Brooklyn geriatrician noted, "It would be 12 interesting to know how many physicians like myself 13 in practice frequently exclude themselves from the 14 payroll so that everyone else can be paid, and for 15 the simple reason that there's not enough money 16 available. 17 "It is certainly not rewarding to be working 18 longer hours and receiving diminishing returns 19 because of the administrative burden in paperwork. 20 "Something is wrong with the equation." 21 These are just a few of hundreds of very 22 similar comments we received. They reflect a strong 23 frustration on the part of many in the physician 24 community. 25 We remain very committed to delivering care 1 in our communities, but so much of our time now is 2 taken up by non-medical tasks. 3 Certainly, many of the changes taking place 4 in the practice of medicine in New York are 5 similarly taking place across the country. 6 State budget constraints and employers' focus 7 on controlling health-care costs exist in every 8 state and are forcing profound changes in the 9 delivery of care, including increased administrative 10 steps to justifying that medical treatment is 11 necessary. 12 But New York policymakers have added to this 13 growing burden with an armada of mandated actions in 14 the last few years. These are usually 15 well-intentioned, but, I would point out to you that 16 they are not always fully thought out. 17 These include required offering of 18 HIV testing, required offering of palliative care, 19 required checking of a prescription-drug database, 20 required electronic submission of prescriptions, 21 required reporting of persons under the Safe Act, 22 and a bill to go to the Governor's Office soon that 23 will require the offering of Hepatitis C tests. 24 New York is unique among the 50 states in 25 imposing many of these mandates on doctors, and if 1 the doctor fails to take these required actions, 2 they face serious fines and possible licensure 3 action. 4 Certainly, the steps required by these 5 mandates should be taken by physicians in many, many 6 patient encounters, but it should be left to the 7 discretion of the physician in discussion with the 8 patient. 9 To quote the physician I referenced earlier, 10 "Help!" 11 If we expect to continue to have a viable 12 health-care system to treat our patients, 13 policymakers need to create an environment in 14 New York State that will incentivize physicians to 15 remain in practice here rather than to relocate to 16 states with more welcoming environments for 17 physicians. 18 I would note that a recent report by the 19 Center for Health Workforce Studies concluded that 20 the in-state retention of newly trained physicians 21 in New York, which is the leader in the country in 22 training physicians, has decreased from 53 percent 23 in 2001, to 44 percent in 2011. 24 Certainly, there are a wide number of issues 25 that must be taken up to address this problem, but 1 specific to the goals of this hearing, among our 2 suggestions to relieve our mandate burden include: 3 Changes to the Safe Act: 4 Right now, the statute requires a physician 5 and other health-care practitioners to report to 6 their local mental-health director any patient the 7 physician has reasonable cause to believe is 8 "likely to engage" in conduct that will cause 9 serious harm to self or others. 10 While certainly well-intentioned after the 11 horror at Sandy Hook, this reporting standard is 12 practically speaking so broad that the physician is 13 compelled to report a broad category of patients. 14 Moreover, a literal read of the statute seems 15 to make the provision applicable to all physicians 16 providing care, and not just psychiatrists. 17 If the physician fails to comply, they could 18 face huge penalties from the State. 19 Moreover, there is a significant threat of 20 lawsuit, since the liability protections, including 21 for reporting, or failing to report, were drawn very 22 narrowly and would be easily breached by a creative 23 trial attorney. 24 The Medical Society has asked for cleanup 25 legislation that (a) assures that the provisions 1 only apply to psychiatrists and other providing 2 mental-health treatment, (b) provides a -- stronger 3 liability protections, based upon a physician's 4 decision to report or not report, and (c) clarifies 5 the duty-to-report standard to those situations 6 where a physician believes there is an imminent 7 threat of harm, which is similar to other exceptions 8 to patient confidentiality articulated in federal 9 and state law. 10 The second area I'd like to address, is 11 creating additional exceptions to the 12 duty-to-consult under I-STOP. 13 The Medical Society certainly appreciates the 14 public policy concerns underlying this new mandate, 15 to check the prescribing database prior to 16 prescribing a controlled substance to a patient. 17 We have been working closely with the 18 New York State Department of Health to assure a 19 smooth implementation, and very much appreciate 20 their efforts to quickly respond to concerns raised 21 by physicians. 22 Nevertheless, as we anticipated, since the 23 law was implemented two weeks ago, many physicians 24 have found that duty-to-consult this database to be 25 seriously disruptive to the flow of delivering care 1 to their patients. 2 There is no question that this will force 3 physicians to refer patients in need of pain 4 medications, and reduce access to care for patients 5 who have legitimate needs for pain medications. 6 For example, while the regulations permit a 7 physician's staff to check the database 24 hours in 8 advance of a patient's visit to reduce disruptions 9 while a patient is in the doctor's office, the 10 regulations do not permit the physician's staff to 11 check the database on the Friday before a Monday 12 patient visit. 13 This should be changed. 14 Also problematic is that some hospitals have 15 not facilitated having staff available to check the 16 database for a physician providing outpatient 17 surgery, forcing busy physicians doing hospital 18 rounds or evaluating patients post surgery to 19 navigate the website themselves, rather than being 20 able to delegate this function. 21 One exception to the duty-to-consult under 22 the I-STOP Law, is when a physician is in a hospital 23 emergency room, gives the patient a 5-day or less 24 supply of a controlled substance. 25 We'd recommend that this exception be 1 extended to all post-surgical patients, and perhaps 2 even broader than that, in a hospital or outpatient 3 setting. 4 Creating additional exceptions to 5 e-prescribing requirements: 6 Another component of I-STOP will require 7 physicians, with limited exceptions, to 8 electronically prescribe all prescriptions, as of 9 March 27, 2015. 10 Many physicians have adopted e-prescribing 11 systems; some have not, however, due to their cost 12 and disruption in the delivery of medical care. 13 There are many physicians approaching 14 retirement, but still in a position to deliver 15 quality of care to patients, and many with 16 longstanding treatment relationships with their 17 patients, that may not be able to accrue the 18 investment of an electronic prescribing system. 19 We should assure that these physicians are 20 able to easily avail themselves of the waiver 21 process set forth in the statute. 22 With regard to the insurance industry, 23 uniformity in physician claim submission would be 24 helpful. 25 Right now, New York State Medicaid, 1 worker's compensation, and no-fault all have their 2 own unique claim-submission forms mandated by the 3 State Department of Health, the Worker's 4 Compensation Board, and the Department of Financial 5 Services, respectively. 6 And all these forms are different than the 7 forms physicians submit to commercial health 8 insurers. 9 In some cases, these forms can be incredibly 10 burdensome to complete. 11 In 2010, the Worker's Comp Board decided to 12 withdraw the required use of new injury report forms 13 after a huge number of physicians dropped out of the 14 worker's compensation program in response to the 15 complexity of the forms. 16 We're pleased to hear that the board will be 17 undertaking a complete reevaluation of its claim 18 adjudication process, and hope it will lead to a 19 simplified process that reduces administrative 20 hassles. 21 There has been a great push nationally, 22 including as part of the Affordable Care Act, to 23 create greater uniformity in the burdensome 24 claim-submission process. 25 This uniformity should be extended to all 1 forms of insurance coverage for patient health-care 2 costs, including Medicaid, worker's compensation, 3 and no-fault. 4 While not a state rule, physicians across the 5 country are going to face huge costs associated with 6 complying with the Center for Medicare Studies' 7 mandate, to change their disease coding system from 8 ICD-9 to ICD-10 on October 1, 2014. 9 The purpose of including these codes on a 10 claim form is to simplify the reporting of a 11 patient's disease or particular condition. 12 However, implementing the new ICD-10 requires 13 physicians and their staff to contend with 14 68,000 outpatient diagnostic codes, the expansion of 15 which has very little clinical impact. It's more 16 for tabulating health-care data for research. 17 This would be a fivefold increase from the 18 plenty of 13,000 codes that we have now. 19 This will be a massive administrative and 20 financial undertaking for physicians and other 21 health-care entities, requiring education, software, 22 coder training, and testing with payers. 23 Physicians will be responsible for all of 24 these costs, as will others, which, depending on the 25 size of a medical practice, has been estimated to 1 range from $83,000 to more than $2.7 million. 2 The Medical Society of New York has joined 3 with many other state and national specialty 4 societies across the country in asking CMS for the 5 further delay in this implementation. 6 Moreover, we've advocated for legislation in 7 the U.S. Congress to repeal this requirement to 8 shift to ICD-10 coding. 9 We would urge you, to help us urge Congress 10 that this legislation be adopted. 11 We'd also ask you to reject new mandates. 12 There are a number of other proposals under 13 consideration that would impose additional, 14 potentially costly mandates on physicians that will 15 interfere with the timely availability of quality 16 patient care. 17 We note our strong opposition to the 18 following proposals that have been introduced or are 19 under consideration in certain state agencies; 20 Opposition to proposals under discussion at 21 the state Public Health and Health Planning Council, 22 that would require physicians to undergo 23 prohibitively expensive Certificate of Need approval 24 if they wish to perform certain medical procedures 25 that are routinely performed in a non-hospital 1 setting. 2 I would defer any questions on that to 3 Dr. Underwood, who will speak specifically to that. 4 Opposition to proposals under discussion by 5 the New York E-Health Collaborative that would 6 mandate physicians adopt interoperable electronic 7 medical-records systems, and participate on the 8 SHIN-NY network. 9 Opposition to legislation that would mandate 10 course-specific continuing medical-education 11 coursework, such as pain management. 12 MSSNY supports a general requirement for 13 physicians to obtain 50 hours of CME on a biennial 14 basis, but opposes legislative or regulatory 15 mandates for specific courses that may have no 16 connection to an individual physician's practice. 17 As we go through life, we do different 18 things. 19 And while it's very appropriate to have 20 training in pain management, and most of us receive 21 some of that in medical school, some of us do things 22 that have nothing to do with it, and it's a burden 23 that would not be helpful, and, again, reduce the 24 pleasure of practice in New York State. 25 We appreciate your efforts to identify ways 1 to reduce the administrative burdens. 2 I'd like to echo the thoughts of both 3 Mr. Kaskie and Dr. Trump on medical-liability 4 reform, and some of the other areas that they have 5 brought up. 6 And, I would be happy to answer any questions 7 that you have. 8 SENATOR MARCIONE: You know, I heard a lot of 9 commonsense thoughts from you. 10 Thank you very much. 11 THOMAS MADEJSKI, M.D.: Thank you. 12 SENATOR MARCIONE: I mean, we heard that 13 first from Dr. Trump, that we should be looking at 14 that. 15 Just a question to follow up on the Safe Act 16 concerns that you have, between psychiatrists and 17 doctors, and there's no differential in the law. 18 When you bring forth someone that you believe 19 meets the law, do you bring that forward to the 20 county physician? 21 There's a county mental-health coordinator. 22 Do you then turn those folks over to the 23 county mental-health coordinator? 24 And if so, have you heard any further 25 information from them about how burdensome or not 1 this new law is? 2 THOMAS MADEJSKI, M.D.: Well, again, I think 3 that is the issue with passing a law which has not 4 been, perhaps, fully thought out, in terms of how to 5 deal with that, because our county mental-health 6 director came to me, we had some discussion. 7 They're not clear to what to do. 8 This is not something that really would have 9 changed how I practice, if I have a patient who has 10 a serious mental-health issue who is unsafe. 11 We have a direct relationship with the county 12 mental-health service, that I can easily access 13 them, and then we do what's right for the patient, 14 which is the most important thing. 15 And that may be, that I have to call some 16 other public-health worker, such as a policeman, or 17 someone for someone who is unstable, that we get 18 them to an emergency psychiatric facility. 19 The reporting part of that, again, made no 20 difference to me in terms of how I would act on 21 behalf of the patient, and is, again, just another 22 burdensome regulation that exposes me to more 23 liability for not doing it in the way that the State 24 has indicated they would do it, even though 25 I believe I would do it in a safe and effective 1 manner, for my patient, and for the public health. 2 SENATOR MARCIONE: Thank you. 3 SENATOR GRISTANTI: Yes. 4 Tom, you know, in going through your report 5 here, and reading it, you know, there is going to be 6 some cleanup legislation that we're doing. 7 Some of these that you have under I-STOP and 8 Safe Act, you know, don't seem to be really heavy 9 lifts. 10 Just curious, though: Why, under the I-STOP, 11 is the staff, they can't check the database on a 12 Friday for a Monday? 13 THOMAS MADEJSKI, M.D.: Because of the way 14 that it's been set up by the Department of Health. 15 There's a 24-hour look-back, so if you're -- you 16 know, you can't check it. 17 SENATOR GRISTANTI: So, I mean, is it shut 18 down? 19 I mean -- 20 THOMAS MADEJSKI, M.D.: I don't know the 21 specifics of that. 22 CHRISTINE NADOLNY: No, the -- 23 THOMAS MADEJSKI, M.D.: I'll find you 24 additional information. 25 CHRISTINE NADOLNY: The database is available 1 24 hours, 7 days a week; however, the legislation 2 specifically states that the database must be 3 accessed 24 hours before the presentation of the 4 script -- or, the visit with the patient. 5 So in that case alone, our offices do not 6 have staff on Saturday and Sunday -- 7 SENATOR GRISTANTI: Right, on Sundays. 8 Right. 9 CHRISTINE NADOLNY: -- unless there's hours. 10 So, it really becomes a problem. 11 SENATOR GRISTANTI: Only as a change, 12 basically saying that, you know, on a Friday before 13 the weekend, if we're, you know, are able to check 14 it? 15 CHRISTINE NADOLNY: Right. 16 SENATOR GRISTANTI: Okay. 17 And the-- I want you to elaborate a little 18 bit more on the stop I -- ICD-10 that you have 19 written here. 20 If you could elaborate on that? 21 THOMAS MADEJSKI, M.D.: I can. 22 And it's actually somewhat outside of, 23 I think, what you could do at the state level. 24 SENATOR GRISTANTI: No, but at the state 25 level, it could be done with regards to -- 1 THOMAS MADEJSKI, M.D.: Well, I'll look back 2 at that, with our staff, and get back to you with 3 that. 4 SENATOR GRISTANTI: Okay. 5 THOMAS MADEJSKI, M.D.: But it's more of a 6 federal issue that, again, your support in terms of 7 helping us make that not happen would be greatly 8 appreciated. 9 SENATOR GRISTANTI: Okay. All right. 10 I appreciate you coming here today and 11 testifying. 12 Thank you. 13 SENATOR GALLIVAN: Thank you. 14 THOMAS MADEJSKI, M.D.: Thank you. 15 SENATOR GALLIVAN: Our next presenter is 16 Jessica Crawford, who is the president of 17 MedTech Association. 18 Thank you for being here. 19 Now, if I may, before you get started, if 20 everybody could just be mindful of the time. 21 We had allocated about ten minutes for 22 everybody, and, obviously, this is very important, 23 so we're anxious to hear what you have to say. 24 If you have things in writing, that's very 25 helpful to us, and you don't necessarily have to go 1 through all of it, so long as we can follow up 2 afterwards. 3 But, this room is scheduled to be used at 4 1 p.m., so we have to be out of here just a little 5 shortly before that. 6 So, I'd ask everybody to keep that in mind. 7 Jessica, thanks for being here. 8 JESSICA CRAWFORD: Thank you, Senator. 9 I appreciate the opportunity to be here 10 today, and I will be sensitive to the time. 11 I understand. 12 I'm Jessica Crawford. I'm the president of 13 MedTech Association. We're a statewide bioscience 14 and medical-technology association in 15 New York State. 16 We represent nearly 100 companies, member 17 companies, across all corners of New York State. 18 And I actually spoke in front of 19 Senators Marchione and Valesky last week. 20 We're one of the few industries that is 21 growing in New York State, and we have the potential 22 to really return upstate to economic relevance, and 23 bolster the overall economy in New York State. 24 Across the state we employ over 25 75,000 New York State residents, with average 1 salaries of over $72,000. That's well above the 2 state and national averages. 3 Locally here, though, in Western New York, 4 this has become a really booming industry and strong 5 economic driver for the region here locally. 6 Locally, we represent about -- over a dozen 7 member companies with over 8,000 employees, 8 including University of Buffalo, AMRI, Great Batch, 9 and Moog Medical. 10 As part of Governor Cuomo's Buffalo Billion 11 plan, AMRI is creating a research center here in 12 Buffalo, with about 250 jobs it's bringing here 13 locally. 14 Also, the move downtown of UB's medical 15 school is very promising, and already attracting a 16 lot of investment in downtown Buffalo. 17 So as I said, we're a major economic driver 18 for Western New York; however, without the full 19 cooperation of the State, this often overlooked 20 industry cannot realize its vast potential. 21 And one example of a policy that I'd like to 22 highlight today is in reference to the Governor's 23 Medicaid redesign team that released a report about 24 a year and a half ago. 25 They recommend setting up a technology 1 assessment process; however, this process, they've 2 already been making decisions on eliminating 3 technologies and devices from coverage. 4 It's not transparent, it doesn't allow for 5 public comment, and it's hurting our companies. 6 So we understand, as an association, why this 7 is necessary, and we've seen this happen across the 8 country, not just in New York. 9 We're seeing it happen in Washington, Oregon, 10 and Minnesota. 11 And for our companies, they understand that 12 this is a necessary part of doing business; however, 13 what we're seeing in other states is a more 14 friendlier process, where they allow for 15 transparency, they allow for public input, and it's 16 not just industry, but from consumers, patients, 17 groups that use these technologies. 18 So, I think it's sending a message of the 19 state being an unfriendly place to be doing 20 business, and I know that's not its intent. 21 I think some of the technologies that have 22 been questioned, as of recently, really treat 23 chronic pain or conditions; so, back pain, 24 spinal-cord injuries, Cerebral Palsy, where, a lot 25 of times, you see that it may be costly up front, 1 but when you look at it, it does save lives; and in 2 the long run, does save money for the state, from a 3 health perspective. 4 So, one of those technologies that I'd like 5 to reference: implantable infusion pumps for 6 treating non-cancer pain. 7 This directly affects a few hundred patients 8 in New York State, but this is their last resort for 9 pain -- for treating their chronic-pain conditions. 10 This is actually produced by one of our 11 companies, Medtronic, that has a number of jobs here 12 in New York State. 13 You know, we really are just looking for a 14 more open and transparent process. 15 I think the solution is pretty simple, and 16 can really go a long way with companies and patients 17 using these treatments. 18 And like I said, if you look at systems such 19 as Washington State's health-technology assessment, 20 Oregon has a health-evidence review commission, and 21 Minnesota has a health-services advisory committee, 22 they all add transparency and integrity to the 23 review process. 24 They allow for public input, and consulting 25 the advice of medical practitioners and 1 professionals. 2 So, we'd like to see something like that 3 happen here in New York State, something similar. 4 We've actually been working with a number of 5 groups across New York on a bill, that, thank you to 6 Assemblyman Morelle and Senator Hannon for 7 sponsoring. It did pass the Senate this year. 8 It provides for a committee consisting of 9 13 members with backgrounds in health care and 10 health technology, that provides recommendations 11 about coverage decisions, recommendations that are 12 based on clinical effectiveness and safety. 13 So, unfortunately, it has stalled on the 14 Assembly side, in committee, under 15 Assemblyman Godfried, the Health Committee. 16 So, we really do believe that this committee 17 is going to allow for input from consumers, 18 advocates, and patients in the biomed industry, and 19 bring transparency and integrity back to this 20 Medicaid-assessment process; and, ultimately, 21 leading to better patient outcomes. 22 I mean, at the end of the day, is what we all 23 want to see. 24 So that being said, anything that you can do 25 to support enacting that bill would be very much 1 appreciated by our industry. 2 And on a positive note, I'd like to thank the 3 Governor and the Administration, and all of you, 4 for, I think, in the last year, we've seen a lot 5 of -- it's tied in directly to the regulatory 6 environment, but we've seen a lot of proactive 7 efforts in the way of workforce development. 8 And that is certainly a need and a challenge 9 for our industry, from a technical perspective, but 10 also senior-level talent, recruiting that to 11 New York, Upstate New York specifically, and, we 12 appreciate that. 13 That's a priority for our members, and it's 14 something that we'll be continuing to focus on this 15 year, and look forward to working with you on more 16 in the year to come. 17 So, thank you. 18 SENATOR GALLIVAN: Thank you, Jessica. 19 JESSICA CRAWFORD: Any questions? 20 SENATOR MARCIONE: I have one, just some 21 clarification, if you would. 22 When I looked at the -- this bill that you're 23 talking about, it says it creates a 24 health-technology assessment committee under the 25 Department of Health. 1 You know, my look as a senator has been, 2 anything that creates new rules and regulations is 3 something that I'm not interested in. 4 Are you asking us, through this Committee, to 5 add an additional layer that would create more 6 regulation for your industry? 7 Or am I not understanding you correctly? 8 JESSICA CRAWFORD: No, it's actually -- it's 9 integrating kind of this peer-review, or check. 10 We just want to make sure that these 11 decisions aren't being made in a vacuum. 12 We want to make sure that they're not 13 arbitrary, and that they're having -- there's some 14 expert opinion going into technology, whether it's 15 looking at efficacy, the cost, how it's impacting 16 patients across the state. 17 We don't even know who's on -- who's making 18 these decisions. There's just a total lack of 19 transparency. 20 So, we're not looking to add another layer, 21 but we want to ensure that the people making these 22 decisions, that there's some level of expertise 23 represented on that group of advisors, or -- so 24 we're really suggesting just a group of advisors to 25 provide some expert opinion. 1 SENATOR MARCIONE: Thank you. 2 SENATOR GALLIVAN: Is it possible, that if 3 that was to take place at these decisions being 4 made, if proper equipment was made available, or 5 continued to be made available, is that something 6 that, potentially, will lower health-care costs? 7 JESSICA CRAWFORD: Absolutely. 8 Absolutely. 9 So like I mentioned, the chronic pain or 10 conditions, so there is a bit of an investment up 11 front for the cost of the technology, but in the 12 long run, it does save the State money. 13 So there's -- 14 SENATOR GALLIVAN: And would you be able to 15 present data -- 16 JESSICA CRAWFORD: Sure. I can -- 17 SENATOR GALLIVAN: -- in certain 18 circumstances? 19 JESSICA CRAWFORD: Yeah, and I can talk to 20 some of my members, to point to some examples of 21 some technology that has done that, absolutely. 22 SENATOR GALLIVAN: And we can follow up with 23 you? 24 JESSICA CRAWFORD: Absolutely. 25 SENATOR GALLIVAN: Thank you. 1 SENATOR GRISTANTI: That's good. 2 I'm familiar with, actually, Senator Hannon's 3 bills that you talk about, and I think that it's 4 actually moving in the right direction. 5 And it's, unfortunately, that the Assembly 6 did not pass it. 7 You know, but that will be worked on next 8 year. 9 And I know that biomed is critical in this 10 area, and moving forward in Western New York, and 11 that it actually is getting some teeth. 12 But my question is: What does MedTech 13 exactly do? 14 Do you represent, like, a lot of different 15 companies under one umbrella? 16 JESSICA CRAWFORD: Yes, so we're a trade 17 association. 18 So, similar to, like, the 19 Manufacturers Association of Central New York -- 20 SENATOR GRISTANTI: I got you. 21 JESSICA CRAWFORD: -- we represent the needs 22 and interests of our industry. 23 So, advocacy, training, educational 24 programming. We have a [unintelligible] consortium 25 that supports our members. 1 So, there's a number of benefits for our 2 member companies, but advocacy being a main big part 3 of that. 4 SENATOR GRISTANTI: And other than Medtronic 5 that has -- you know, that has -- Medtronic that has 6 this issue, are there any other organizations that 7 MedTech is representing, that have other possible 8 regulations that they see as, you know, needs to be 9 changed? 10 JESSICA CRAWFORD: Other regulations, or 11 other technologies being looked at under this? 12 SENATOR GRISTANTI: Well, you got here that 13 MedTech represents pharmaceutical, biotech, 14 medical-technology companies, their suppliers. 15 And I know that, you know, you mentioned one 16 of them, Medtronic, you know, they have this issue 17 right now with a piece of legislation you'd like to 18 get moving forward, because of something that 19 happened, basically, this year, as of October 1st of 20 this year, regarding the implantable infusion pumps. 21 Are there other companies, that you 22 represent, have other issues that are different than 23 that, or other issues that they have regulations 24 with that, that anybody's brought to your attention? 25 JESSICA CRAWFORD: So, outside of this policy 1 specifically, I mean, there's a lot of broader, 2 I think, business regulations, that I think we've 3 heard a few of them already today. 4 This is one that's become more of a priority 5 to share for our members, because I think they're 6 afraid of what's to come. 7 It's more about, with that lack of 8 transparency, anyone's at risk. No one knows who's 9 going to be a target next, what technology is going 10 to be targeted next, because we don't know, 11 decisions are being made, who's making them. 12 So, it's kind of more fear of the unknown 13 with this right now. 14 I mean, there are other policies and things 15 that impact our industry, from a general business 16 perspective. 17 This is one, specifically, more on the health 18 side. 19 SENATOR GRISTANTI: But if there are other 20 ones, if you can, you know, have somebody put those 21 together and get those to us as well, that would be 22 helpful. 23 JESSICA CRAWFORD: Okay. 24 SENATOR GRISTANTI: Thanks for testifying 25 today. 1 SENATOR GALLIVAN: Thanks, Jessica. 2 And we have all your contact information. 3 JESSICA CRAWFORD: Yes. 4 Thank you so much for your time. 5 SENATOR GALLIVAN: Don Ingalls, 6 vice president of state and federal regulations, 7 from HealthNow New York. 8 Welcome, Don. 9 DONALD INGALLS: Thanks, Senator Gallivan, 10 Senator Grisanti; 11 And welcome to Buffalo, Senator Valesky and 12 Senator Marchione, thanks for coming. 13 I'm Don Ingalls, vice president of state and 14 federal relations for HealthNow New York, and we 15 operate as BlueCross/BlueShield of Western New York 16 in the 8 counties of Western New York, and 17 BlueShield of northeastern New York in the 18 13 counties around the Capitol District. 19 We employ about 1650 employees in Buffalo, 20 Albany, and Endicott. 21 We've been providing insurance solutions to 22 employers and individuals since 1936, and are the 23 region's largest health-care insurer. 24 We cover about 700,000 people in 25 Upstate New York. 1 Thanks so much for the opportunity to speak 2 with you today. 3 I wanted to focus for a few minutes on 4 health-insurance mandates, and these are the 5 requirements, in state law, that insurance policies 6 cover specific services or practitioners or other 7 items. 8 New York has one of the most number of 9 mandates in the country, and this continues to 10 result in increased costs for health insurance, 11 because the services are mandated to be covered by 12 insurance policies. 13 This affects small business especially, 14 because larger businesses can self-insure, and often 15 do, and escape the requirements of state regulation, 16 and one of those being the mandates to cover those 17 services. 18 We have data from a 2003 study that show that 19 the mandates, at that time, were -- added about 20 12.2 percent to the premiums, not insignificant, and 21 that resulted in about $445 a year for a single 22 contract, and 1,067 for a family contract. 23 And this was before some of the more recent 24 mandates, like the autism mandate a couple of years 25 ago, Timothy's Law, and mental-health parity a few 1 years before that. 2 Mandates started, really, in the early 1970s, 3 and early on, they really covered things that we'd 4 all reasonably expect to be covered in a 5 health-insurance policy. 6 Then they -- mandates happened -- other 7 mandates happened that focused on providers. 8 So, chiropractors, for example, in 1997, 9 lobbied to get chiropractic coverage in New York; 10 and fertility specialists lobbied to get fertility 11 services covered in later years. 12 And then, more recently, there have been 13 additional mandates around -- relating to 14 state-budget issues. 15 So, for example, the movement of some costs 16 from the early intervention program in the state to 17 private health insurance. 18 So, some mandates really are appropriate. 19 We, then, the insurance would be covering these 20 things anyway. 21 But it's not easy to tell when the laws have 22 gone from forcing insurers to provide services that 23 employers believe they have paid for, to forcing 24 companies to purchase services that they don't 25 really or necessarily want to have. 1 So, that's one of the reasons why we, as an 2 individual insurance company, and the industry, tend 3 to oppose additional mandates, one of the reasons. 4 Individually, they may not -- the costs may 5 not be significant, but as you've seen, they add up, 6 in general, and, there's an unintended consequence 7 of the mandates, beyond the cost addition, is that 8 they encourage more companies to self-insure to 9 escape the cost of the mandates. 10 Currently, about half -- well, I think it's a 11 little over a half of the insurance plans in the 12 state, and companies in the state, self-insure, so 13 that they are not subject to the mandates. 14 So when the mandates are passed, they're only 15 covering the portions of the population who are 16 fully insured. 17 Many states have coped with this by setting 18 up mandate review commissions. 19 And, in fact, New York passed legislation 20 back in 2007, as you know, to set up a mandate 21 review commission. 22 And we applaud Senator Gallivan and the other 23 sponsors of the S3042, which would make some changes 24 to the New York State Health-Care Quality and Cost 25 Commission, and we think that's an appropriate way 1 to start to address the effective mandates before 2 they take effect. And, the bill also would require 3 review, ongoing review, of existing mandates. 4 And we think that's a very healthy approach 5 to looking at the issue. 6 I will have additional details in written 7 testimony. 8 I have to make some changes to it, but I'll 9 get that to the staff. 10 But, happy to answer any questions now. 11 SENATOR GALLIVAN: I'm glad you mentioned the 12 bill that we have advanced, to try to address the 13 very thing that you brought up. 14 And just say, unanimously, our purpose here 15 today is to accomplish that on a greater scale, and 16 you've identified one particular area. 17 I look forward to following up with you. 18 I don't know if there are other questions? 19 SENATOR VALESKY: Not a question, just, 20 thanks for being here. 21 Good to see you, Don. 22 DONALD INGALLS: Yeah, good to see you. 23 SENATOR VALESKY: Look forward to your 24 written testimony. 25 SENATOR GRISTANTI: Thanks, Don. Thanks for 1 coming today. 2 DONALD INGALLS: Yep, indeed. 3 SENATOR GALLIVAN: Thanks, Don. 4 SENATOR GALLIVAN: Dennis Galluzzo, 5 Pharmacists Association of Western New York. 6 Thanks for being here, Dennis. 7 DENNIS GALLUZZO: I want to thank you for 8 inviting me to represent pharmacists in 9 Western New York today, and I also want to thank all 10 of you for spearheading regulatory reform. 11 I represent the Pharmacists Association of 12 Western New York as their executive director, and 13 I represent the pharmacists side of the state of 14 New York as a regional affiliate. 15 I am an owner of a -- a pharmacy owner. 16 I own Family Medical Pharmacy in 17 Williamsville, so these restrictions and problems 18 and regulations affect me personally. 19 And I also am a member of the Erie County 20 Board of Health, so I bring these issues to you on 21 the basis of public health. 22 Let me just go right into it. I'll eliminate 23 some of the introductory things I was going to say. 24 But, regarding a regulatory problem that 25 we're having with a particular law regarding 1 immunizations, is the county-restriction regulation 2 that's within the law. 3 Since October 2008, the state law has allowed 4 pharmacists certified by the Education Department to 5 administer certain vaccines to adults. 6 Let me explain this to you. 7 There's a provision within the law that 8 requires us to have a non-patient specific order. 9 So, in other words, for me, as a pharmacist, 10 to immunize somebody for -- against influenza, 11 I have to have a doctor write a standing order for 12 me. 13 Being on the Erie County Board of Health, we 14 are lucky to have Commissioner Burstein, the 15 Commissioner of Health in Erie County, write the 16 orders for Erie County. 17 Now, the law states, that if that 18 practitioner writing the standing order for county 19 pharmacists in that county, if the adjacent counties 20 have less than 75,000 in population, that 21 practitioner can also be the practitioner writing 22 that standing order. 23 We have a problem here in Western New York. 24 We represent the eight New York counties. 25 I have three counties in our area, 1 Niagara County, Chautauqua County, and 2 Cattaraugus County that have over 75,000 in 3 population; so, therefore, Dr. Burstein cannot write 4 those orders for those counties. 5 We have been mandated -- we have been 6 instructed, not mandated, we've been, request of 7 Dr. Shah, to have all the county officials sign on 8 to these orders. 9 In so doing, Commissioner Burstein was able 10 to do that for us in Erie County and five of the 11 other counties. 12 The Chautauqua County and Cattaraugus County 13 county officials have stepped up to the plate. 14 However, we have five pharmacies in 15 Niagara County that are unable to give flu vaccine 16 because we cannot get a county official to sign on 17 to those standing orders. 18 This law is actually a barrier that prevents 19 certified and willing pharmacists from administering 20 vaccine to consumers who ask for them. 21 The five pharmacies in Niagara County have 22 flu vaccine. 23 I want you to make it very important, that 24 pharmacists must prebook vaccine for the upcoming 25 season. 1 So these five pharmacies, in lieu of the fact 2 that they would get a standing order, have bought 3 over five to six thousand dollars worth of flu 4 vaccine, have them presently in their stores. 5 Presently, I have about $10,000 worth of flu 6 vaccine that I'm ready to administer. 7 But these five pharmacies in those counties 8 in Niagara County cannot administer it. 9 The members of the public are asking for flu 10 shots in their county, but they cannot be immunized 11 in pharmacies because Niagara County officials and 12 physicians refuse to write non-patient specific 13 orders for pharmacists in that county. 14 These owners, pharmacists, and members of the 15 public have all been disenfranchised by a provision 16 in the state law that gives veto power to a few 17 practitioners who simply refuse to authorize 18 pharmacists to give flu shots. 19 This is particularly egregious, because those 20 same pharmacists, under the H1N1 pandemic, through 21 the decrees of Governor Paterson at the time, and 22 subsequently after that, the next season, 23 Governor -- Governor Cuomo, were able to give 24 carte blanch vaccines to children and to the adult 25 population. 1 Now, we only ask to do adult population, but 2 under the decree, we were able to give vaccines to 3 help avert the pandemic of H1N1. 4 So now we're asking you, please, it is 5 important to know, this issue is included, because 6 it's a glaring example of state policy that is 7 detrimental to pharmacies, and also health insurers 8 that want to save costs by keeping their enrollees 9 healthy during the flu season. 10 It is important to note that one of 11 Governor Cuomo's program bills, Senate Bill 4528, 12 introduced by Senator Hannon -- and you have my 13 testimony there -- removes the county restriction, 14 and includes other important reforms to improve 15 public health. 16 Backed by the Governor and the New York State 17 Department of Health, pharmacists are optimistic 18 that this, or a similar bill, will be passed and be 19 assigned into law in 2014. 20 However, we are in a real crisis right now, 21 and if there's anything you can do for us in 22 Niagara County, we would greatly appreciate it, 23 because flu season is in full force right now -- in 24 other -- and the -- you know, averting the flu 25 epidemic for this year is in full force right now. 1 I've already given many vaccines. 2 The CDC tells us that we should be giving the 3 vaccine out as soon as it becomes available. 4 It became available 5 late August/early September for all these 6 pharmacies. 7 And in this county, is now, subsequently, 8 endangering some of these population. 9 SENATOR GRISTANTI: Anywhere else in the 10 state, or just in Niagara County? 11 DENNIS GALLUZZO: Yes, it's happening in 12 other places in the state, but I don't have those. 13 Elizabeth Lasky can give you the list of 14 certain counties that we're having problems with. 15 This really should be a mandate from the 16 State Department of Health. 17 Senator -- Commissioner Danes, prior to 18 Commissioner Shah, was able to do that -- should be 19 able to do that cart blanch for everybody in the 20 state. 21 Unfortunately, because of this county 22 restriction. 23 SENATOR GRISTANTI: And it's because of the 24 veto power -- the veto-power situation that -- 25 DENNIS GALLUZZO: Yeah, like, the county -- 1 like, if the county -- if, like, in -- specifically, 2 if a Niagara County county official who -- the 3 commissioner says, "We're not going to do it," then 4 that sets precedent for all the other physicians in 5 those groups that are just saying, Well, gee, we're 6 in the medical side in Niagara, we're not going to 7 do it. 8 So we've approached -- 9 SENATOR GRISTANTI: Who said that in 10 Niagara County? Who [unintelligible] in 11 Niagara County? 12 DENNIS GALLUZZO: Well, specifically, we've 13 gone to the commissioner of health in 14 Niagara County, and he would not -- was unable to 15 help us. 16 SENATOR GALLIVAN: Well, we -- my 17 understanding, if I understand correctly, it 18 emanates from a law or regulation -- 19 DENNIS GALLUZZO: Correct. 20 SENATOR GALLIVAN: -- that -- 21 DENNIS GALLUZZO: Gives them that power. 22 SENATOR GALLIVAN: -- draws the line at 23 75,000? 24 DENNIS GALLUZZO: Correct. 25 SENATOR GALLIVAN: So if you're at 75,000, an 1 adjacent county cannot do anything? 2 DENNIS GALLUZZO: Correct. 3 SENATOR GALLIVAN: It must be done within the 4 county? 5 DENNIS GALLUZZO: Right, exactly. 6 SENATOR MARCIONE: Why would a county say no? 7 I mean, what's the rationale here? 8 DENNIS GALLUZZO: Senator, we are speechless. 9 We have no way of knowing where their 10 sentiment is in that regard. 11 We just can't believe it. 12 It's a public-health issue. 13 Like I said, the Erie County Commissioner of 14 Health, Gail Burstein, stepped right up to the 15 plate, and said -- came -- even came to the meeting 16 with us, and said, you know, This is something that 17 has been requested by your Commissioner. 18 State Health Commissioner Dr. Shah got on a 19 conference call with all these counties officials, 20 and said, "You guys should sign on to this for 21 pharmacists in the area." 22 But, unfortunately, we have a problem right 23 here in Western New York. 24 SENATOR MARCIONE: Is there any liability to 25 the county -- 1 DENNIS GALLUZZO: We -- Dr. Richard Peer, 2 who's the vice president of MLMIC, assured me that 3 they would come on board for any liability issues 4 involved. 5 In other words, I actually have a statement 6 that was written to the previous doctor, for 7 Erie County was Dr. Richard Judelsohn, who's now 8 passed away, a dear friend of mine, who signed on 9 for Erie County. And he actually had a statement 10 from MLMIC, saying, "That we encourage you to do 11 this." 12 So his insurance company was encouraging him 13 to do it for pharmacists. 14 Because, quite frankly, insurance companies 15 want people to be immunized, because -- to stop them 16 from having health problems, from flu epidemic, you 17 know, there's precautions -- or, other things that 18 happen, like, they can get pneumonia and die. 19 Like, 5,000 people die from pneumonia in 20 New York State due to flu complications every year. 21 So, I mean, there's a lot of things that are 22 going on. 23 The second thing is, a mandatory cost survey. 24 In November 2011, the Health Department 25 published emergency regulations that required every 1 pharmacy enrolled in the Medicaid program to 2 complete two surveys. 3 One survey asks for the actual invoice cost 4 for each individual drug product purchased by the 5 pharmacy; 6 And the other asks for details about the 7 costs of operating the pharmacy. 8 The cost surveys, you must remember, are a 9 Medicaid-mandated regulation. 10 They affect every pharmacy in New York State. 11 4,400 pharmacies had to give this cost survey. 12 So far, we have seen no results. 13 We have never had these price lists as 14 current. 15 Because they are -- prices change, and it's 16 an ongoing process, this has proven to be a 17 never-ending bureaucratic web. 18 We need to remove this regulation from -- 19 from, uhm, the statutes that are in New York State 20 right now. 21 The second survey, of the cost of pharmacy 22 operations, is based on a federal law that requires 23 states to pay pharmacies a dispensing fee that is 24 reasonable, based on our overhead. 25 The cost-of-dispensing survey was demanding, 1 time-consuming, and mandatory, but the data is in, 2 and the results are eagerly anticipated, but very, 3 very overdue. 4 The issue raised here is the ongoing 5 product-cost survey, and not the on-time cost -- 6 "one-time cost of dispensing" survey. 7 The product-cost survey is ongoing, and 8 costly to the State in terms of staff. 9 And since the costs go up daily, it is going 10 to be a continual problem. 11 The data is voluminous, to say the least. 12 Just imagine going into my store, which is a 13 very little pharmacy. I have thousands and 14 thousands of prescription medications on my shelves 15 that I have to give a list of costs to the Medicaid 16 people. 17 And the problem there is, it changes every 18 week. 19 SENATOR GALLIVAN: How often? 20 DENNIS GALLUZZO: Oh, we get price changes 21 all the time. Every day. 22 SENATOR GALLIVAN: No, how often do you have 23 to do this? 24 DENNIS GALLUZZO: Oh, they are doing -- they 25 did the cost survey, they made everybody do it in 1 New York State, 4,400 pharmacies. And then they're 2 randomly selecting us to do it on a monthly basis. 3 So I had one last month to do. 4 And the other problem is, that it comes 5 through -- the request comes through the health 6 commerce account. 7 And it's really kind of funny, because I kept 8 getting statements from them, but the statements 9 were going to my junk mail, because they keep 10 changing the person who's sending out the 11 information. 12 And I finally called them up and I said: 13 I don't know who you are. You're asking me for a 14 survey, and I don't even know what you're asking me 15 for. 16 So they say: Oh, we're from the 17 Health Commerce System, and we need to do a random 18 cost survey again on you. 19 So we had to go to the wholesale house and 20 ask this to be done again. 21 This regulation is an excellent example of 22 one that is not useful, not cost-effective, 23 burdensome, and wasteful for both the State and the 24 4,400 affected pharmacies. 25 We strongly recommend its repeal. 1 Think about it: it's duplicative. 2 The federal government, CMS, was conducting 3 national price surveys as well. They are not 4 mandatory. 5 This one is. 6 And, the results of the cost-of-dispensing 7 survey are overdue. 8 Pharmacists have always maintained that the 9 Medicaid fee-for-service professional fee falls well 10 below the actual cost of dispensing, especially 11 after the non-mandatory co-pay is subtracted. 12 So if you think about it, there was a study 13 by Grant Thornton several years ago, that said that 14 the cost of filling a prescription in a pharmacy 15 exceeds $10. 16 Medicaid is paying us $3.50. 17 And, then, the Medicaid patient will come 18 into the pharmacy and say, My social worker said 19 that I don't have to pay the co-pay. 20 So on the fact that we are probably losing 21 money on that prescription because we're not getting 22 paid enough, they also don't pay their co-pay, 23 because it's also said in the state contract that 24 they don't have to do it. 25 So, this is a terrible thing for us on both 1 ends. 2 There is another issue that I wanted to go 3 through. 4 Regarding the cost survey, they want to make 5 it public. But if they publish it, it's already 6 going to be outdated the moment they publish it, 7 because these costs keep changing every day. 8 One of the things that I would go through on 9 the last segment, would be to regulate pharmacy 10 benefit managers and require timely price updates. 11 Let me just say one thing about this last 12 issue. 13 Pravastatin, there's a generic called 14 "Pravachol." 15 On my shelf, several months ago, one bottle 16 cost $3. 17 For some reason, this should be investigated 18 by the Senate, your Committee, it went up to $300. 19 Now, can you imagine a prescription going 20 from $3 a bottle to $300 a bottle overnight? 21 This is happening on an ongoing basis. 22 So we're asking you to give us summary leave 23 from pharmacy benefit managers. 24 Now, PSSNY supports passage of a legislation 25 that will define "pharmacy benefit mangers," and 1 allow for regulations. 2 These are the entities that adjudicate our 3 claims. 4 Pharmacy benefit manager contract with health 5 insurers to manage pharmacy benefit. 6 The state insurance law regulates health 7 plans, but does not recognize or define, regulate, 8 pharmacy benefit managers, leaving pharmacies 9 vulnerable in their relationship to these pharmacy 10 benefit managers. 11 Just to say one thing, and make it very 12 clear, and I'll end this, because you have my 13 testimony: 14 To ensure that local pharmacies remain viable 15 in an era of managed care, state law and regulations 16 should include a process by which pharmacies are 17 able to address pharmacy-benefit-manager issues, 18 such as timely updating of drug costs. 19 This is the issue, for Medicaid, and for us 20 as well. 21 Pharmacies purchase inventory from a 22 wholesaler at current prices, and pharmacies should 23 be reimbursed at current prices. 24 And the problem is, nobody's keeping up with 25 those prices, and they use it to their advantage. 1 So if an insurance company has been paying me 2 $3 a hundred, it's to their advantage not to update 3 their records when it comes to $300. 4 And then what happens? The patient can't get 5 the medicine. 6 We need regulatory reform on this issue. 7 To date, there are no laws that exist to 8 protect local small businesses, small pharmacies. 9 And I got to tell you, I lose on certain 10 prescriptions on a daily basis. 11 And I welcome Patrick Gallivan -- 12 Senator Gallivan; Senator Grisanti, you're in my 13 area; Senator Ranzenhofer's my guy; please, come 14 into my pharmacy. I will demonstrate to you, I 15 invite you into my pharmacy, and demonstrate to you 16 some of these problems. 17 You're more than welcome to come in. 18 I want to thank you for the opportunity to 19 speak to you today. 20 And if you have any questions? 21 SENATOR VALESKY: Just, very briefly, because 22 I know we're up against a time constraint, although, 23 you have a lot of issues in here that I think all 24 four of us -- 25 DENNIS GALLUZZO: I tried to be brief. 1 I apologize. 2 SENATOR VALESKY: No, no, don't apologize. 3 It was good testimony. 4 Just the one comment that I would make on the 5 first issue, the flu, the county restriction issue, 6 I'll certainly look forward to supporting the 7 program bill. 8 The problem is, as you now, we're out of 9 session until January. 10 DENNIS GALLUZZO: Right. 11 SENATOR VALESKY: So for this flu season, 12 that presents a little bit of a problem. 13 But, if in previous years, and you're telling 14 us that this commissioner, and the previous health 15 commissioner, were able to address this 16 administratively, notwithstanding the law, 17 obviously, the long-term effects is passing 18 Senator Hannon's bill, but if we can, for this flu 19 season, my understanding is then, perhaps we could 20 reach out to the Governor and the 21 Health Commissioner to, in effect, issue an 22 executive order to override the statute. 23 DENNIS GALLUZZO: I would greatly appreciate 24 that. 25 And we actually did approach Deborah Black, 1 who's on the Bureau of Immunizations in the state. 2 And it would great -- you know, if you can 3 move that issue -- 4 SENATOR VALESKY: Maybe we can work on that. 5 DENNIS GALLUZZO: -- that would be greatly 6 appreciated. 7 I have been working with the Senator Maziarz 8 in Niagara County, to ask these -- the 9 Niagara County officials to move forward on it, and 10 we've reached a brick wall. 11 And it's very frustrating, as I represent all 12 the pharmacists in Western New York, to have availed 13 this service to all of the other pharmacies in 14 Western New York, and to have these five pharmacies, 15 you know, quite -- you know, small -- you might 16 think eight or ten thousand dollars isn't a lot of 17 money, but for a small business like a small 18 pharmacy in a small county, you know, it hurts, and 19 it could be easily detrimental to the business. 20 Very detrimental. 21 SENATOR GALLIVAN: And we're able to follow 22 up with you? 23 DENNIS GALLUZZO: Yes, please do. 24 Thank you so much for your time. 25 SENATOR GALLIVAN: Thanks, Dennis. 1 DENNIS GALLUZZO: By the way, I think 2 40 volumes of those regulations have to do with 3 pharmacy. 4 [Laughter.] 5 SENATOR GALLIVAN: Roberta, I saw you 6 earlier. 7 Roberta Rifkin from Independent Health. 8 ROBERTA RIFKIN: Good afternoon. 9 Thank you for inviting me in representing 10 Independent Health, which is a local community-based 11 not-for-profit health plan with about 12 350,000 members. 13 We serve the continuum of coverage from 14 Medicaid, commercial, and Medicare products. 15 And I am -- given the time limit here, 16 Don Ingalls went before me and expressed as well, 17 our concerns with the issue of mandates. 18 We are in the business, as a health-insurance 19 plan, to provide coverage. In that coverage, we 20 need to provide certain types of options for 21 consumers. 22 And these mandates certainly constrict what 23 we can do. 24 Mandates are not all bad, as Don said. 25 And I think he and I, we all support the 1 legislation that you put forward and passed. 2 And we'd like to see that happen, a review 3 commission, especially today. 4 And I'm going to add just one point to what 5 Don said, given our time here, is that, with the 6 implementation of the Affordable Care Act, there is 7 a provision in there which says, that any new 8 mandates after 2011 will be paid for by the state, 9 so that new mandates that come on now, what that 10 means is, that the state will have to pay the plan 11 for that additional mandate. 12 So I think it's a really perfect timing to 13 really galvanize this Commission, to not only review 14 existing mandates, the more than 50 existing 15 mandates in the package of benefits that we need -- 16 that we're required to offer for evidence-based 17 practice, and impact on costs, but, also, to look at 18 any kind of future mandates and future 19 recommendations for new benefits. 20 Not to say that there will be bad or there 21 might be good ones, but we really need to understand 22 what those will mean. 23 I also appreciate the opportunity, and to -- 24 to -- that you're doing a thousand regulations. 25 And I know that I will be sending you lists, 1 as we have our meetings of -- people were giving me 2 very specific ones. 3 I said, No, no, no, that's not so important. 4 We want the big things, and it looks like you want 5 all the little things. 6 SENATOR GALLIVAN: Everything. 7 ROBERTA RIFKIN: So -- so I will send you -- 8 we will make a big contribution to that list, okay? 9 So I will stop there, to give others some 10 time, and see if you have any specific questions. 11 SENATOR GALLIVAN: Yeah, thank you. 12 And for everybody's sake, we will be sending 13 a questionnaire, asking some specific things, to 14 everybody who has presented today, asking you to 15 follow up as well -- 16 ROBERTA RIFKIN: Okay. 17 SENATOR GALLIVAN: -- with more specific 18 things. 19 But I appreciate you being here. 20 I have no questions. 21 SENATOR GRISTANTI: I just want to say that 22 I've had many conversations throughout the last 23 couple of years, and trying to have conversations 24 with Senator Kemp Hannon. 25 And I know that you are like an encyclopedia 1 of knowledge when it comes to what some of these 2 mandates are, what some of the things that need to 3 be corrected. 4 And I just want to say that I appreciate, 5 over the last, year and a half, two years, of your 6 the time and your effort that you have been putting 7 in to get some of these things corrected. 8 And we look forward, not only to the big ones 9 here, the three that you have in your testimony, but 10 also the small ones as well, because everything's 11 important. 12 And I just want to say, thank you for 13 contributing all that you're doing. 14 ROBERTA RIFKIN: Well, you've all made the 15 first step in reducing costs for businesses by 16 having this here, and us not having to travel to 17 Albany, so I thank you. 18 [Laughter.] 19 SENATOR GALLIVAN: Dr. Willie Underwood, from 20 the Medical Society of Erie County, their 21 legislative committee -- chairman of the legislative 22 committee. 23 Thanks for being here, and sorry to put you 24 under the gun -- 25 WILLIE UNDERWOOD, M.D.: Oh, no. No, no. 1 SENATOR GALLIVAN: -- but we will be more 2 than happy to follow up afterwards as well. 3 WILLIE UNDERWOOD, M.D.: Did you get a copy 4 of my testimony? 5 I'm going to make it brief. 6 Chris was going to join me as well. 7 I think she stepped out for 30 seconds. 8 Again, like everyone else... 9 Do you have it? 10 SENATOR GALLIVAN: Yes, we do. 11 WILLIE UNDERWOOD, M.D.: Perfect. 12 I want to thank you, Senator Gallivan, for 13 having an opportunity to give some insight on some 14 health-care policy issues; 15 Erie County Medical Society, who has allowed 16 me to speak on their behalf; 17 And Roswell Park for having this venue. 18 I'm here to today to speak in opposition of 19 CON, in general; and more specifically, enhancing it 20 to include in-office procedures. 21 You have my titles and information, and all 22 that, but, just briefly: 23 I sit as a member of the council on 24 legislation for the American Medical Association. 25 I'm involved in a health-policy committee, 1 and a council on legislation for the 2 American Neurology Association. 3 And I'm chair, as you said-- 4 SENATOR GALLIVAN: You were at one of those 5 meetings when we were at the Medical Society? 6 WILLIE UNDERWOOD, M.D.: Yes, yes. 7 SENATOR GALLIVAN: We had you by 8 teleconference? 9 WILLIE UNDERWOOD, M.D.: Exactly, you had me 10 by teleconference. 11 And I'm now chair of the legislative 12 committee for the Erie County Medical Society. 13 And you met Chris earlier. She was up here 14 earlier. 15 Perfect. 16 Just, in briefly, I'm gonna -- you have all 17 this: 18 So CON started in New York State, and that's 19 important, in 1964. 20 Why is that important? Because everybody 21 followed what New York State did. 22 So we now have 35 states with CON laws. Many 23 of those states are challenging those laws, but as 24 you know, it is very difficult to roll back policy 25 once it's has been introduced. 1 The United States Justice Department has 2 weighed in on this as well, and, basically, they 3 have said, and I've given you testimony on this: 4 It's bad. 5 It's bad for competition; 6 It's bad for business; 7 It's bad for growth; 8 It's bad for health care; 9 And it's bad for our patients. 10 Period. 11 All right? 12 Now, if New York State expands that, what 13 does that say? 14 It tells other states, maybe you should be 15 expanding it as well to in-office procedures, which 16 doesn't really make any sense. 17 We've already said that the current laws 18 impede growth and development of health care, 19 innovation. 20 They're outdated, because the reason it was 21 introduced no longer exists anymore anyway, and 22 that's because we had a cost-based payment system, 23 which is gone. 24 So since we no longer have a need for CON 25 laws, because the reason for developing them no 1 longer exists, then, guess what? Maybe CON laws 2 shouldn't exist anymore either. They should go by 3 the wayside as well. 4 So, just briefly: 5 What do CON laws do? 6 They create barriers to beneficial 7 competition. They impose other costs. 8 Why? 9 Because, competitors, when they want to keep 10 someone out of the marketplace, they use the system 11 to do so. 12 So what does that mean? 13 So, therefore, they're wasting resources by 14 having lobbyists involved, lawyers, other 15 consultants, on both sides of the table. 16 You're trying to get in, you got to hire 17 that. 18 You're trying to keep your competitors out, 19 you have to hire that. 20 So now we increase the costs; imposing 21 unnecessary costs. Right? 22 Or, they create anticompetitive behaviors. 23 What does that mean? 24 Hey, you know, if you don't do this, I'm 25 going to -- you know I'm going to oppose you if you 1 come in my market, but, I will -- but I won't oppose 2 you if you put it over there. 3 Or, they create collusions, and stuff like 4 that. 5 And that has happened in other states, and 6 there's documentation of that, according to the 7 states, in Virginia and in Georgia. 8 It impedes -- increase higher costs. Right? 9 And then, as I stated, the cost-control 10 measures for implementing CON laws no longer exist. 11 Now, I'm going to take this straight from the 12 Justice Department, as you think about CON laws in 13 the future. 14 Basically, what they basically say is this: 15 First, enhancement of CON laws should have a 16 significantly and clearly articulated justification, 17 because they are government intervention, and in the 18 marketplace, that creates barriers to entry into the 19 health-care markets. 20 That substantial justification should have a 21 basis in serious pervasive market studies that 22 demonstrate that the market has failed in some 23 significant way. 24 Secondly, an evaluation of pro CON laws 25 should consider, not only the justification for the 1 law, but also identify and weigh the harm to 2 consumers that are likely to result for creating a 3 barrier to entry. 4 The consideration of these potential harms 5 should include the ways in which the regulations 6 could distort the market, affect incentives, and 7 diminish competition. A state should enact and 8 maintain CON laws only if it finds the justification 9 does good; the good does outweigh the harm. 10 Thirdly, in cases where the evidence does 11 show a greater benefit than harm for CON laws, it 12 has been suggested that you consider whether you can 13 address the problem in an alternative fashion that 14 preserves competition, or at least it narrowly and 15 tailors the remedy to only demonstrate the need and 16 preserve such competition as possible. 17 So you create a law to the need, not some 18 broad blanket theme that decreases competition. 19 A state should only use the CON laws to 20 address some problem if that problem cannot be 21 addressed without government intervention in the 22 form of a barrier to entry. 23 If the state must erect a barrier to entry, 24 select the approach that accomplishes the objectives 25 with the least disruptive effects on competition. 1 Thank you very much for allowing me to 2 provide this testimony. 3 I can answer any questions. 4 SENATOR GALLIVAN: Amen. 5 My only question: In other words, if you go 6 back to the history of this, and why it was put in 7 place in the first place, that purpose no longer 8 exists? 9 WILLIE UNDERWOOD, M.D.: No longer exists. 10 SENATOR GALLIVAN: So it's -- in your 11 opinion, this would be an outdated regulation that's 12 in place, that does -- that does all the negative 13 things that you've articulated? 14 WILLIE UNDERWOOD, M.D.: It's not -- it is my 15 opinion, but it's also the opinion of the 16 United States Justice Department. 17 SENATOR GALLIVAN: Yes, and backed up by the 18 Justice Department and [unintelligible] -- 19 WILLIE UNDERWOOD, M.D.: Exactly. 20 That's right. 21 SENATOR GALLIVAN: Thank you. 22 SENATOR GRISTANTI: Dr. Underwood, also, with 23 the presence of these regulations, they talk about 24 an increase in health-care costs itself. 25 Is there any figures, or anything, that you 1 have that shows what the increase in the health-care 2 costs is? 3 WILLIE UNDERWOOD, M.D.: Well, that would be 4 variable by the state, but it's the concept of 5 that -- that, okay, so, if I'm the only one in the 6 market, or I've had limited -- so if the cost to 7 barrier is great; so, therefore, I can block 8 competition out; therefore, I can negotiate with the 9 insurance carriers, and others, for a higher cost, 10 because I'm the one providing that service, so to 11 speak, that's how they believe they're drawing up 12 health care. 13 So there's studies to support that as well. 14 If you'd like, I can send those studies to 15 you. 16 SENATOR GRISTANTI: I'm just curious if there 17 are any that you know of that are there in 18 New York State, as a whole, because I think that Pat 19 and yourself hit it on the head. 20 You know, you have the U.S. Justice 21 Department behind you. You have regulations that, 22 you know, back in the '60s, with the history 23 lesson you talked about, but are no longer needed. 24 But if you have something that shows, you 25 know, roughly, what the potential health-care 1 costs -- 2 WILLIE UNDERWOOD, M.D.: That's for 3 New York State? 4 SENATOR GRISTANTI: Yeah? 5 WILLIE UNDERWOOD, M.D.: We can look for 6 that. 7 I know Georgia did a big study. 8 SENATOR GRISTANTI: If you can get that to 9 us, and then if it's something that, you know, we 10 can add to it, to say, Hey, this is why this is not 11 the right way to go. 12 WILLIE UNDERWOOD, M.D.: Exactly. 13 Great. 14 Thank you very much for your time. 15 SENATOR GALLIVAN: Thanks a lot, Doctor. 16 SENATOR GALLIVAN: And last, but not least, 17 thanks for hanging in there, Marlene Kraft, from 18 Palladian; vice president of quality and marketing 19 Services, Palladian Health. 20 And, again, if -- being last is in a tough 21 position, I know. It's usually between people and 22 dinner, but, we are more than happy to follow up if 23 you're not able to get everything in. 24 MARLENE KRAFT: No, I'll try to be very, very 25 quick. 1 SENATOR GALLIVAN: You know we are, right 2 across the street. 3 MARLENE KRAFT: Exactly, you are. I see your 4 sign regularly. 5 Thank you for having us here this afternoon. 6 I'm here, Marlene Kraft, with 7 Dr. John Gillespie. He's the chief medical officer 8 at Palladian. 9 And Palladian administers managed-care 10 services for musculoskeletal conditions 11 specifically, on behalf of health plans in 12 New York State, as well as out of New York State, so 13 we have a perfect vantage point to see what 14 New York State requires, what other states require, 15 and, since earlier in the twenty-first century, what 16 the federal government requires. 17 And that's where we see a lot of opportunity, 18 let's say, for improving, because New York has had 19 utilization review regulations in place for a long 20 time. 21 And many states have taken the opportunity 22 to, let's not use the word "plagiarize" those 23 New York State regulations, but they have taken many 24 of them to heart, not only at other states, but also 25 in accrediting agencies. 1 Companies have duplicative reviews, because 2 the state looks at our documentation, the health 3 plans who delegate services to us review our 4 documentation, and, then, so do accrediting agencies 5 if we so choose to proceed with that process. 6 Article 49, specifically, both -- which is 7 duplicated in insurance regulation and in public 8 health law, contains a lot of those provisions, and 9 those are the ones that I would really want to 10 address. 11 4901, I believe it is, requires the every 12 two-year biennial registration to become a UR agent. 13 New York State can't even comply with the 14 review of those every two-year submissions because 15 they don't have the staff and the time to do so; 16 and, yet, we are consistently updating our 17 information and having a status of in-progress, 18 because the work is just overwhelming for everyone. 19 While other states, for example, is -- 20 recognize URAC accreditation, and, if an agency is 21 URAC-accredited, they accept that for the 22 UR certification, rather than go through all of the 23 work. 24 But, in addition, Article 49 requires work 25 that is an additional business expense for the 1 people performing the review, whether it be a 2 UR agent such, as Palladian, or sometimes health 3 plans. 4 And that would reference -- I would reference 5 Article 4903, that requires both verbal and written 6 communications to members and providers. 7 And then, 4904, which also requires written 8 and verbal, but adds a monkey wrench into the 9 legislation, because it says it can be satisfied by 10 notifying the provider. 11 Unfortunately, doing business in 12 New York State across all areas, we are allowed to 13 see the effect, that that interpretation of that 14 regulation is also different, whether you go from 15 Western New York or from downstate. 16 So I think that Article 49 is an opportunity 17 to look at, and perhaps streamline specifically, 18 since the Patient Protection and Affordable Care Act 19 covers provisions that intersect what New York State 20 currently has in place. 21 And, in addition, Department of Labor 22 regulations that were put into effect way back in 23 2003, also intersect New York State, and make the 24 administrative implementation much more challenging 25 for health plans and UR agents. 1 DR. JOHN GILLESPIE: [Inaudible] one of the 2 issues with that, is that if you've asked for 3 something and it's approved, we're presenting them, 4 both, written, and to also tying up their phones. 5 And they don't want their phones tied up with us 6 telling them that it's there. 7 And in addition, if we have to tell a patient 8 that they've had something approved, they think 9 we're stupid, because their physician ordered it, 10 they're supposed to get it, and now we're calling 11 them and telling them, Gee, we hope you have a good 12 time getting it. 13 And it -- for denial, I understand why a 14 patient should know that, but for something that's 15 been approved, once the office knows it, which is 16 going to coordinate that care, it is just -- you 17 know, patients get a letter and they say, This is a 18 waste of money. 19 That other -- all patients know this has had 20 to be paid for, and that there's a certain cost for 21 a letter going out, and they're thinking that just 22 adds to their health care. And they're thinking, 23 Well, I was set to have this anyways. 24 And now it's the insurance agent, they're not 25 real happy with them anyways. 1 And they're -- so it's just duplicative, and 2 it's a waste of money. 3 SENATOR GRISTANTI: Marlene, you're talking 4 [inaudible] -- actually, in the public-health law, 5 that this -- 6 MARLENE KRAFT: There's insurance law, 7 Article [inaudible], which are identical. 8 SENATOR GRISTANTI: Well, insurance -- under 9 insurance law and public-health law? 10 MARLENE KRAFT: Correct. 11 SENATOR GRISTANTI: Okay, thank you. 12 MARLENE KRAFT: One other item that we had on 13 our list, and I can send you the more detailed 14 information on it, Article 9 in public-health law 15 addresses some definitions of primary-care 16 practitioners and primary-care physicians. 17 And it appears that those definitions are not 18 complete, based on some of the expansion of service 19 providers, for one thing; 20 And, secondly, I think there seems to be an 21 interpretation that allows some of the providers 22 represented within our networks to be misclassified 23 as specialists. 24 For example, chiropractors and physical 25 therapists and occupational therapists tend to be 1 categorized by the insurance world as "specialists," 2 and are, therefore, subject to a specialist co-pay. 3 I know there have been other pieces of 4 legislation that have, you know, made it to your 5 desks, potentially, and never made it to the floor 6 for discussion, but because they're classified as 7 specialists, sometimes they don't really get a fee 8 from the insurance company, suggesting that they're 9 really is no creditable coverage for that service. 10 If the fee is $30, and the co-pay is $50, 11 well, let's face it, there is no insurance coverage 12 that is subject to this situation. 13 The other pieces, and I don't have the 14 legislation for this, but I can certainly include it 15 in my follow-up documentation, there is a provision, 16 and we've been told this by health plans, that 17 practitioners who perform the same services should 18 be considered equivalent for those services. 19 And while I understand and accept the fact 20 that doctors of osteopathy are not equivalent to 21 chiropractors, they both can bill for spinal 22 manipulation, because doctors of osteopathy were 23 originally servicing that particular type of care 24 for patients; and, yet they would be subject to the 25 primary-care co-pay, while the chiropractor who's 1 performing the same service, in some cases, is 2 subject to the specialty co-pay. 3 DR. JOHN GILLESPIE: In point of continuity 4 of care, when you think of chiro, PT, occupational, 5 and dietary, these are all primary things to try and 6 take care of things in a preventive standpoint. 7 And when you -- they fall into a specialist 8 co-pay, they're being -- they're being, basically, 9 closed out, effectively, or an insurer can close 10 them out, effectively, and you're -- you're then 11 left, where it's almost easier to go to a 12 specialist, which is not a good solution, as a rule. 13 MARLENE KRAFT: It's not member-friendly 14 either, because, when a member does need 15 chiropractic care or physical therapy, they 16 typically see that health-care professional twice a 17 week, maybe even once a week, but for a prolonged 18 period of time; maybe it's four weeks, maybe it's 19 six weeks, because they're trying to rehab. 20 And that means that they -- the member is 21 paying a co-pay for each one of those visits. 22 So, potentially, even if there is some 23 coverage for it, they are paying a much more 24 escalated cost than they would seeing a specialist 25 sometimes. 1 DR. JOHN GILLESPIE: Although it isn't on our 2 docket, I just want to put our two cents in on these 3 ICD-9s, that I know that they're not yours, but, the 4 ICD-9s, when they go to 68,000 diagnoses, I'm a 5 cardiologist, and I usually work with 20. 6 So that means I have 67,980 to learn. 7 [Laughter.] 8 DR. JOHN GILLESPIE: The issue for it, 9 I think, is people want to correctly identify, very 10 exactly, what you have. 11 So instead of just having hypertension, 12 they'd like to know if it was caused by renal artery 13 stenosis on the left side, maybe in the upper third 14 of the kidney. 15 There are reasons, possibly, for doing that, 16 but you should remember that, for all hypertensives 17 in the country, only 50 percent are treated 18 effectively. 19 And one would wonder if it would be better to 20 have something based on outcomes, such as the number 21 of patients who have hypertension that are treated 22 effectively. 23 If we raised the 50 percent to the 24 95 percent, we could then worry about the 1 percent 25 that are odd hypertensives that this classification 1 may more correctly identify. 2 And people only have so much time in their 3 offices. 4 And I think that, with the technology, 5 there's a push for information that may not 6 effectively help people. 7 And I'm not saying that is totally bad, but 8 I don't think people have enough total time. 9 And I think it would be better served, in 10 viewing things, do they change outcomes? 11 And it's not clear to me that this is going 12 to change the outcome, because we're -- we've known 13 for a while we don't treat enough people; and, yet, 14 that isn't an evaluation. 15 I think if physicians knew that they would 16 have to self-report on their hypertensives, as some 17 of the boards are now asking people to do, that that 18 might be a much more effective way to improve care. 19 Two cents. 20 Thank you. 21 SENATOR GRISTANTI: Thank you, Doctor. 22 SENATOR GALLIVAN: Thank you. 23 DR. JOHN GILLESPIE: Have a nice day. 24 Thanks. 25 SENATOR GALLIVAN: Thanks to those of you who 1 have hung in here, our presenters. We appreciate 2 your preparation in what you've presented. 3 We will follow up with a questionnaire, and 4 we look forward to following up. 5 And, Lisa, thanks to Roswell, and Dr. Trump, 6 for hosting. 7 We do anticipate a report sometime in 8 November. Likely mid-to late November. 9 Thank you everybody. 10 (Whereupon, at approximately 2:08 p.m., 11 the public forum held before the New York State 12 Senate Majority Coalition concluded, and 13 adjourned.) 14 15 ---oOo--- 16 17 18 19 20 21 22 23 24 25

Public Forum: Regulatory Reform Forum to Learn from Businesses and Industry Experts Which Regulations Are the Least Useful, Least Cost-Effective, And, Therefore, Should Be Eliminated

Transcript