Authorizes the Erie county medical center corporation to enter into agreements for the creation and operation of a health care delivery system network

1 Co-sponsor

• Patrick M. Gallivan

BILL NUMBER:S2647

Title of bill

An act to amend the public authorities law, in relation to authorizing the Erie county medical center corporation to enter into agreements for the creation and operation of a health care delivery system network

Purpose

To clarify that the Erie County Medical Center Corporation may exercise its general and special powers regardless of whether such exercise might have an impact on competition.

Summary of provisions

Section one adds a new subdivision 8 to section 3626 of the Public Authorities Law, adding additional legislative intent to the findings and purposes as set forth for the Erie County Medical Center Corporation (ECMC).

Section two adds a new subdivision 10 to section 3631 of the Public Authorities Law to clarify that in carrying out its health care purposes, ECMC may engage in arrangements, contracts, information sharing, and activities with public or private entities and individuals, including joint ventures and joint negotiations with physicians, hospitals and payers. Such negotiations may result in separate or combined agreements, leases and/or activities involving delivery system network creation and operation that may displace competition and might otherwise be considered violations of state or federal antitrust laws. This provision provides the necessary legislative declaration for the activities of ECMC and of the private entities and individuals with which it collaborates, to be immunized from liability under federal and state antitrust laws. The section also provides that ECMC and its collaborators will remain subject to generally applicable provisions of the public health law and regulations set forth by the Department of Health, and ECMC will also file an annual report with the state Department of Health, in regards to the impact of the collaborations.

Section three is the effective date.

Justification

ECMC was created under Title 6 of Article 10-C of the Public Authorities Law. The corporation was formed from the Erie County Medical Center, a public hospital owned and operated by Erie County. The medical center healthcare network included a general hospital, the Erie County Home, and several clinics in Erie county. The center also served, and ECMC continues to serve, as a tertiary care facility for Erie County and seven other counties in Western New York.

As a result of the recommendations made by the Commission on Health Care Facilities in the 21st Century (Berger Commission) report in 2006, and occurring in the way that is provided, ECMC has worked and continues to work to form health care collaborations while continuing to carry out its mission as a safety-net facility. In particular, its ability to collaborate with private entities and individuals is clear

in the general and special powers granted to it under Public Authorities Law §§ 3630 and 3631. However, in a recent Supreme Court decision FTC v. Phoebe Putney Health System, Inc., the Court held that in order for state action immunity to apply the state must clearly articulate and affirmatively express a policy to displace competition. Therefore, ECMC seeks to clarify the state's intention that such collaborations may be carried out regardless of whether they displace competition and may otherwise be considered violations of state or federal antitrust laws.

Legislative history

New bill; similar to Chapter 458 of 2013.

Fiscal implications

None.

Effective date

This act shall take effect immediately.