What's happening
This bill allows health care providers in Nassau and Suffolk counties to collectively negotiate contract terms with health plans, including fees, under state oversight.
Why it matters
Addresses market power imbalances. By allowing collective negotiation, the bill aims to counteract situations where health plans have “substantial market share,” giving providers more leverage to negotiate contract terms, potentially resulting in fairer agreements for both providers and patients.
Sets limits and oversight to prevent anti-competitive behavior. The process requires state approval at multiple steps, including the appointment of mediators and fact-finding boards if negotiations stall, and prohibits provider strikes or exclusionary agreements, ensuring that collective action does not harm patient access or market competition.
Focuses on broad aspects of provider contracts. Providers may negotiate terms beyond just payment rates, such as utilization review standards, coverage provisions, quality assurance, and dispute resolution procedures—areas that directly impact patient care, administrative burdens, and practice sustainability.
Provides for evaluation and accountability. The law is a five-year demonstration with mandated reporting on outcomes, including impacts on quality of care, patient access, and health care costs, which means future policy could be shaped by measurable results rather than assumptions.
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Let Providers Negotiate Health Plans
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to health
- Reported and committed to finance
- Referred to health
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Let Doctors Negotiate Together
In Assembly Committee · Codes · Sponsor Steven Englebright
Full text
7 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5044
2017-2018 Regular Sessions
IN SENATE
March 6, 2017
Introduced by Sen. HANNON -- read twice and ordered printed, and when printed to be committed to the Committee on Health
AN ACT to amend the public health law, in relation to requirements for collective negotiations by health care providers with certain health benefit plans in certain counties; and providing for the repeal of such provisions upon the expiration thereof
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Statement of legislative intent. The legislature finds that collective negotiation by competing health care providers for the terms and conditions of contracts with health plans can result in beneficial results for health care consumers. The legislature further finds instances where health plans dominate the market to such a degree that fair and adequate negotiations between health care providers and the plans are adversely affected, so that it is necessary and appropriate to provide for a demonstration to examine the risks and benefits associated with a system of collective action on behalf of health care providers. Consequently, the legislature finds it appropriate and necessary in the demonstration service area to displace competition with regulation of health plan provider agreements and authorize collective negotiations on the terms and conditions of the relationship between health care plans and health care providers so the imbalances between the two will not result in adverse conditions of health care. This act is not intended to apply to or affect in any respect collective bargaining relationships involving health care providers, as defined in section 4920 of the public health law or rights relating to collective bargaining arising under applicable federal or state collective bargaining statutes.
§ 2. Short title. This act shall be known and may be cited as the "health care consumer and provider protection act".
§ 3. Article 49 of the public health law is amended by adding a new title III to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10367-01-7
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TITLE III
COLLECTIVE NEGOTIATIONS BY HEALTH CARE
PROVIDERS WITH HEALTH CARE PLANS Section 4920. Definitions.
4921. Non-fee related collective negotiation authorized.
4922. Fee related collective negotiation.
4923. Collective negotiation requirements.
4924. Requirements for health care providers' representative.
4925. Certain collective action prohibited.
4926. Fees.
4927. Monitoring of agreements.
4928. Confidentiality.
4929. Severability and construction.
§ 4920. Definitions. For purposes of this title:
1. "Health care plan" means an entity (other than a health care provider) that approves, provides, arranges for or pays for health care services in the demonstration service area, including but not limited to:
(a) a health maintenance organization licensed pursuant to article forty-three of the insurance law or certified pursuant to article forty-four of this chapter;
(b) any other organization certified pursuant to article forty-four of this chapter; or
(c) an insurer or corporation subject to the insurance law.
2. "Person" means an individual, association, corporation or any other legal entity.
3. "Health care providers' representative" means a third party who is authorized by health care providers to negotiate on their behalf with health care plans over contractual terms and conditions affecting those health care providers.
4. "Strike" means a work stoppage, in part or in whole, direct or indirect, by a body of workers to gain compliance with demands made on an employer.
5. "Substantial market share in a business line" exists if a health care plan's market share of a business line within the demonstration service area as approved by the commissioner, in consultation with the superintendent of financial services, alone or in combination with the market shares of affiliates, exceeds either ten percent of the total number of covered lives in that service area for such business line or twenty-five thousand lives, or if the commissioner, in consultation with the superintendent of financial services, determines the market share of the insurer in the relevant insurance product and geographic markets for the services of the providers seeking to collectively negotiate significantly exceeds the countervailing market share of the providers acting individually.
6. "Health care provider" means a person who is licensed, certified, or registered pursuant to title eight of the education law and who practices as a health care provider as an independent contractor and/or who is an owner, officer, shareholder, or proprietor of a health care provider in the demonstration service area. A health care provider under title eight of the education law who practices as an employee of a health care provider shall not be deemed a health care provider for purposes of this title.
7. "Demonstration service area" shall include the counties of Nassau and Suffolk.
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§ 4921. Non-fee related collective negotiation authorized. 1. Health care providers practicing within the demonstration service area may meet and communicate for the purpose of collectively negotiating with a health care plan the following terms and conditions of provider contracts with the health care plan:
(a) the details of the utilization review plan as defined pursuant to subdivision ten of section forty-nine hundred of this article and subsection (j) of section four thousand nine hundred of the insurance law;
(b) coverage provisions; health care benefits; benefit maximums, including benefit limitations; and exclusions of coverage;
(c) the definition of medical necessity;
(d) the clinical practice guidelines used to make medical necessity and utilization review determinations;
(e) preventive care and other medical management practices;
(f) drug formularies and standards and procedures for prescribing off-formulary drugs;
(g) respective physician liability for the treatment or lack of treatment of covered persons;
(h) the details of health care plan risk transfer arrangements with providers;
(i) plan administrative procedures, including methods and timing of health care provider payment for services;
(j) procedures to be utilized to resolve disputes between the health care plan and health care providers;
(k) patient referral procedures including, but not limited to, those applicable to out-of-pocket network referrals;
(l) the formulation and application of health care provider reimbursement procedures;
(m) quality assurance programs;
(n) the process for rendering utilization review determinations including: establishment of a process for rendering utilization review determinations which shall, at a minimum, include: written procedures to assure that utilization reviews and determinations are conducted within the timeframes established in this article; procedures to notify an enrollee, an enrollee's designee and/or an enrollee's health care provider of adverse determinations; and procedures for appeal of adverse determinations, including the establishment of an expedited appeals process for denials of continued inpatient care or where there is imminent or serious threat to the health of the enrollee;
(o) health care provider selection and termination criteria used by the health care plan; and
(p) rules regarding retrospective audits.
2. Nothing in this section shall be construed to allow or authorize an alteration of the terms of the internal and external review procedures set forth in law.
3. Nothing in this section shall be construed to allow a strike of a health care plan by health care providers or plans as otherwise set forth in the laws of this state.
4. Nothing in this section shall be construed to allow or authorize terms or conditions which would impede the ability of a health care plan to obtain or retain accreditation by the national committee for quality assurance or a similar body.
§ 4922. Fee related collective negotiation. 1. Health care providers practicing within the demonstration service area may collectively nego-
S. 5044 4
tiate the following terms and conditions relating to that business line with the health care plan:
(a) the fees assessed by the health care plan for services, including fees established through the application of reimbursement procedures;
(b) the conversion factors used by the health care plan in a resource-based relative value scale reimbursement methodology or other similar methodology; provided the same are not otherwise established by state or federal law or regulation;
(c) the amount of any discount granted by the health care plan on the fee of health care services to be rendered by health care providers;
(d) the dollar amount of capitation or fixed payment for health services rendered by health care providers to health care plan enrollees;
(e) the procedure code or other description of a health care service covered by a payment and the appropriate grouping of the procedure codes; or
(f) the amount of any other component of the reimbursement methodology for a health care service.
2. Nothing in this section shall be deemed to affect or limit the right of a health care provider or group of health care providers to collectively petition a government entity for a change in a law, rule or regulation.
§ 4923. Collective negotiation requirements. 1. Collective negotiation rights granted by this title shall conform to the following requirements:
(a) health care providers may communicate with other health care providers regarding the contractual terms and conditions to be negotiated with a health care plan;
(b) health care providers may communicate with health care providers' representatives;
(c) a health care providers' representative is the only party authorized to negotiate with health care plans on behalf of the health care providers as a group;
(d) a health care provider can be bound by the terms and conditions negotiated by the health care providers' representatives; and
(e) in communicating or negotiating with the health care providers' representative, a health care plan is entitled to contract with or offer different contract terms and conditions to individual competing health care providers.
2. A health care providers' representative shall not represent more than thirty percent of the market of health care providers or of a particular health care provider type or specialty practicing in the demonstration service area.
3. Nothing in this section shall be construed to prohibit collective action on the part of any health care provider who is a member of a collective bargaining unit recognized pursuant to the national labor relations act.
§ 4924. Requirements for health care providers' representative. 1. Before engaging in collective negotiations with a health care plan on behalf of health care providers, a health care providers' representative shall file with the commissioner, in the manner prescribed by the commissioner, information identifying the representative, the representative's plan of operation, and the representative's procedures to ensure compliance with this title.
2. Before engaging in the collective negotiations, a health care providers' representative shall also submit to the commissioner, for the
S. 5044 5
commissioner's approval, a report identifying the proposed subject matter of the negotiations or discussions with the health care plan and the efficiencies or benefits expected to be achieved through the negotiations for both the providers and consumers of health services. The commissioner shall not approve the report if he or she, in consultation with the superintendent of financial services, determines that the proposed negotiations would exceed the authority granted under this title.
3. The representative shall supplement the information in the report on a regular basis or as new information becomes available, in the event it changes or will change the subject matter of the negotiations with the health care plan. In no event shall the report be less than every sixty days.
4. With the advice of the superintendent of financial services, the commissioner shall approve or disapprove the report not later than the twentieth day after the date on which the report is filed. If disapproved, the commissioner shall furnish a written explanation of any deficiencies, along with a statement of specific proposals for remedial measures to cure the deficiencies. If the commissioner does not so act within the twenty days, the report shall be deemed approved.
5. A person who acts as a health care providers' representative without the approval of the commissioner under this section shall be deemed to be acting outside the authority granted under this title.
6. Before reporting the results of negotiations with a health care plan, the health care providers' representative shall furnish to the commissioner a copy of all memorandums and meeting minutes pertaining to negotiations in relation to the health care provider.
7. A health care providers' representative shall report the end of negotiations to the commissioner not later than the fourteenth day after the date of a health care plan decision declining negotiation, canceling negotiations or failing to respond to a request for negotiation. In such instances, a health care providers' representative may request intervention from the commissioner to require the health care plan to participate in the negotiation pursuant to subdivision eight of this section.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public health law, in relation to requirements for collective negotiations by health care providers with certain health benefit plans in certain counties; and providing for the repeal of such provisions upon the expiration thereof
Purpose
This bill would create a demonstration program to study whether physician collective negotiations can restore fairness to the contracting practice between physicians and large managed care plans. This legislation would not authorize strikes of health benefit plans by physicians.
Summary of provisions
Section one provides a statement of legislative intent.
Read the full memo (1,410 words)
Section two provides that this act shall be known and may be cited as the "Health Care Consumer and Provider Protection Act".
Section three amends article 49 of the Public Health Law by adding a new title III relating to requirements for collective negotiations by health care providers with certain health benefit plans in certain counties and providing for the repeal of such provisions upon expiration thereof.
Section four provides that the Department of Health in consultation with the Department of Financial Services shall prepare or shall arrange for the preparation of a report on the implementation of the demonstration program.
Section five provides the effective date and repealer five years after date of enactment.
Justification
New York State is following an alarming national trend - the slow extinction of the independent health care provider, which includes the neighborhood doctor. The professionalism of medicine has been eroded over the past decade as managed care plans have imposed more restrictions and requirements on physicians, reduced payments to practices and shifted more costs onto patients in the form of higher co-pays, deductibles and premiums. The significant administrative burdens imposed upon physicians by plans and reduced compensation has forced physicians to spend less and less time with patients, undermining the intimate physician-patient relationship, which once comprised the essence of medicine. Independent physicians are not in a position to negotiate, because the playing field is heavily tilted in favor of the health plans, which has and does dictate terms. Consequently, physicians are powerless to protect their relationship with the patients they care for.
Further, the American Medical Association reported that younger physicians were more than twice as likely as their older counterparts to be employed by hospitals. This illustrates that new doctors entering the field are cognizant of the challenges that face their older peers and as such, are choosing not to open their own practice.
A 2015 national report by Marrit Hawkins, a global health care consultancy and major health care employee recruitment firm, highlights the increasing trend of physicians choosing to work as a salaried hospital or mega-group employee rather than start or continue an independent practice. Approximately 95% of search assignments now feature an employed setting, compared to less than 50% in 2004. The report also points to reasons behind the trend of in-practice physicians moving into an employed setting, by stating, "given recent declines in reimbursement, escalating practice costs, and a high level of administrative responsibilities, many in-practice physicians are migrating away from independent practice and towards hospital employment."
Additionally, in a 2015 Accenture report entitled "The Doctor Will NOT See You Now", the number of independent physicians nationwide has been dramatically reduced by 57% since the year 2000. Accenture's report reveals that a major reason for this reduction, based on interviews with doctors, are the inability of doctors to negotiate contract terms with private managed care plans. A direct result of this imbalance of negotiating power in favor of the managed care plans, independent doctors, and other health care providers are offered take-it-or-leave-it contracts by health plans that significantly impede their ability to provide quality patient care.
A PROPOSAL TO PROTECT PATIENT RIGHTS AND FAIR AND EQUITABLE PHYSICIAN CONTRACTS
Currently, federal antitrust laws prohibit individual physicians from collectively negotiating any provisions of private contracts they sign with managed care entities. However, based on a 1943 Supreme Court decision, interpreted as the State Action Doctrine, grants the states an exemption from anti-trust regulations paving the way for physicians to collectively negotiate under "strict state supervision". Recently, the Supreme Court upheld this position on state sovereignty in North Carolina State Board of Dental Examiners v. Federal Trade Commission, 135 S.C. 1101 (2015), where it ruled that the state is immune from anti-trust laws, if that state institutes a policy and strictly oversees the collective negotiations. This legislative proposal is consistent with that precedent.
This proposal would create a demonstration program authorizing physicians in two New York State counties, Nassau and Suffolk, located on Long Island, to collectively negotiate with managed care plans by allowing independent physicians to conduct said negotiations while being closely monitored by the state. Previous legislation introduced in past years was statewide in nature and were opposed, because of the statewide problem of dealing with so many regional areas. By confining this legislation to two distinct areas, it was felt that its scope would be a realistic test case.
Nassau County, which borders Suffolk to the east and Queens County to the West, is densely populated with over 1.3 million residents living within 453 square miles. Nassau is considered a suburban community. However, given its density and close proximity to New York City, it has many urban elements. Suffolk County has an estimated population of over 1.5 million people. It is the state's second largest county encompassing 2,373 square miles, which includes a large agricultural region on its east end, comparable to many regions in upstate New York. Its geographic diversity makes its inclusion in this demonstration program a logical approach. These two counties are representative of a cross section of the rural, suburban and urban communities found throughout New York State.
This legislative proposal would allow physicians in the two counties to conduct collective negotiations by creating a system under which the state would closely monitor those negotiations, facilitate resolution of negotiation impasses, and actively monitor implementation of agreements.
Giving the independent physician a greater ability to advocate for patients in contract negotiations is critical since large health maintenance organizations control huge shares of the health insurance market, both in New York and across the country. This proposal seeks to create a fair and equitable process for doctors and patients when dealing with managed care plans. Currently, these take-it-or-leave-it contracts permit bureaucratic processes and unjustifiably long wait times for patients seeking to obtain pre-authorization for a medical service; impose limitations on whom a physician may refer a patient for necessary care; permit demands for refunds of payments long after the time that such payments were originally made; permit health plans to make major changes to key elements of a contract without physician consent; and cede to physicians the legal consequences for patients harmed by health plan utilization review decisions.
This proposal does not seek to create an additional cost burden on the patient. In fact, a Journal of the American Medical Association study points out, patients and managed care plans may be paying up to 20 percent more if that physician sells his or her practice to a multi-hospital system versus the cost expended by an independent doctor for equivalent services. Insurance premiums in New York have increased consistently, absent collective bargaining rights for physicians. There is no evidence to support a direct relationship between collective bargaining and increased premiums. In fact, the current provider reimbursement rates are calculated arbitrarily based on the size of the provider's network - a practice that has been substantiated by the Federal Trade Commission. When plans negotiate separately with large groups they tend to agree on reimbursement fees that are much higher than the plans pay to individual physicians and small group practices.
Patients deserve to have a choice of which doctor treats them. Whether the physician works independently or for a hospital, the physician practice should not be discriminated against based on its size. Unless New York State intervenes, the family physician as we know it will become extinct.
Legislative history
New bill.
Fiscal implications
To be determined.
Effective date
This act shall take effect on the one hundred twentieth day after it shall have become a law and shall expire and be deemed repealed five years after it shall take effect; provided that the commissioner of health is authorized to promulgate any and all rules and regulations and take any other measures necessary to implement this act on its effective date on or before such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.