Prohibits providers of health care coverage from requiring behavioral health providers to provide all products offered by the health care plan

Summary of provisions

Section one of the bill would amend Social Services law § 365-m to require Medicaid managed care plans to execute separate contracts with behavioral healthcare providers to provide coverage to Medicaid enrollees rather than rely upon previously-executed contracts.

Sections two through five make corresponding changes to Public Health Law § 2511 for child health plus plans and Public Health Law § 4406-c and Insurance Law §§ 3217-b and 4325, respectively for other health care plans and health insurers.

Section six provides that this act shall take effect immediately.

Justification

Beginning in the summer of 2015, mental health and substance abuse clients and the providers who serve them will be moving out of Medicaid fee-for-service and into a managed care environment. Providers will be paid by managed care organizations (MCOs) for Medicaid clients pursuant to rates and terms defined in contracts with MCOs.

Health insurance plans often include an All Products clause (APC) in their contracts with providers. The APC requires the provider to take all current and future product lines brought to them by the plans. If the provider does not agree to take all products - including those that do not include fair terms or adequately reimburse for their cost of services, then the provider cannot participate in the network for any of the insurance product lines. This would apply to products that serve Medicaid beneficiaries as well as patients enrolled in commercial, the Health Insurance Exchange and employer plans. The result could be a very serious access to care crisis in the public mental health and substance abuse services system - the front line providers for people with serious mental illness and those struggling with very serious substance abuse, opioid, heroin and other addictions.

A State Office of Mental Health study conducted in 2012 revealed that approximately 40% of these providers are in significant financial distress. This is due in part to the fact that in the behavioral health system, commercial rates are paid at between 1/4 and 1/3 the rate currently paid for Medicaid fee for service. When this population

is moved in managed care and all rates are able to be set by the plans at these disparately low levels through the use of APCs, providers would be in the untenable position of either discontinuing existing relationships with clients or accepting rates that are well below their costs for providing services.

The All Products clause disrupts existing relationships between clinicians and clients, and threatens continued access to care in a service system already overloaded with long waiting lists, workforce shortages and abysmal commercial rates. Seven states across the country have already banned the use of the APC in contracts between MCOs and certain providers. Attorneys General across the country as well as court decisions have prohibited plans from using the APC in contracts in instances where doing so has been deemed an unfair business practice to gain market share and deny competition that would otherwise occur.

This legislation would take a similar action by prohibiting the use of the All Products clause in contracts between behavioral health providers and MCOs and other health insurance plans This is essential to assure continued access to care and continuity of care for our most vulnerable citizens who utilize the public mental health and substance abuse system. Doing so is also critical to ensuring a smooth transition of behavioral health clients into Medicaid managed care by giving the providers an opportunity to negotiate reasonable contracts with the plans for the clients they serve.

Legislative history

None.

Fiscal implications

None.

Effective date

Immediately