What's happening
This bill allows health care providers to collectively negotiate contract terms with health plans, including certain fee and non-fee related issues.
Why it matters
Levels the bargaining field between providers and health plans. By allowing health care providers to join together in negotiations, the bill aims to address market power imbalances where dominant health plans can dictate contract terms, potentially helping providers secure fairer rates and contract conditions.
Could impact patient care and access. Collective negotiation over non-fee-related terms—such as utilization review, coverage provisions, quality assurance, and dispute resolution—may affect how care is authorized, delivered, and managed, potentially leading to changes in patient access to services or administrative processes.
Includes checks and oversight to prevent abuses. The law establishes requirements for provider representatives, limits on the proportion of providers that can be represented in some situations, and oversight by state agencies (including mediation and fact-finding boards) to monitor agreements and ensure compliance, aiming to prevent anticompetitive behavior and protect consumer interests.
May influence health care costs and provider networks. If successful, collective negotiation could lead to higher reimbursement rates for providers, which may have downstream effects on insurance premiums, provider participation in networks, and overall health care spending in the state.
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Headline styles
Let Providers Negotiate Together
Plain English, a few words. Used as the page title.
Sponsors
4 Co-sponsors
History
- Referred to health
- 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 Health Providers Negotiate Together
In Assembly Committee · Ways And Means · Sponsor Richard Gottfried
Full text
6 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3462
2019-2020 Regular Sessions
IN SENATE
February 7, 2019
Introduced by Sen. RIVERA -- 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
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 system of collective action on behalf of health care providers. Consequently, the legislature finds it appropriate and necessary 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 which arise under applicable federal or state collective bargaining statutes.
§ 2. 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:
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.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03503-01-9
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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, 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 health care provider or health care providers to gain compliance with demands made on a health care plan.
5. "Substantial market share in a business line" exists if a health care plan's market share of a business line within the geographic area for which a negotiation has been approved by the commissioner, 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 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, registered or authorized pursuant to title eight of the education law and who practices that profession as a health care provider as an independent contractor and/or who is an owner, officer, shareholder, or proprietor of a health care provider, or an entity that employs or utilizes health care providers to provide health care services, including but not limited to a hospital licensed under article twenty-eight of this chapter or an accountable care organization under article twentynine-E of this chapter; or an entity authorized under articles thirtysix or forty of this chapter; or a fiscal intermediary operating pursuant to section three hundred sixty-five-f of the social services law. 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.
§ 4921. Non-fee related collective negotiation authorized. 1. Health care providers practicing within the geographic area for which a negotiation has been approved by the commissioner may meet and communicate for the purpose of collectively negotiating 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
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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-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; and
(o) health care provider selection and termination criteria used by the health care plan.
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. If the health care plan has substantial market share in a business line in any geographic area for which a negotiation has been approved by the commissioner, health care providers practicing within that geographic area may collectively negotiate 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
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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 herein 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 must 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 may 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 geographic area for which a negotiation has been approved by the commissioner if the health care plan covers less than five percent of the actual number of covered lives of the health care plan in the area, as determined by the department.
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, the health care providers' representative shall also submit to the commissioner for the 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 the commissioner, in
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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, indicating that the subject matter of the negotiations with the health care plan has changed or will change. In no event shall the report be less than every thirty days.
4. With the advice of the superintendent of financial services and the attorney general, 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.
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
Purpose
This bill is designed to restore fairness in the contracting process between health care providers and large managed care plans by allowing such providers to join together to negotiate contract provisions. This legislation would not authorize strikes of health benefit plans by health care providers.
Summary of provisions
Section 1 is a statement of legislative intent that the legislature finds it appropriate and necessary to authorize collective negotiations on patient care issues and on fee-related and other issues where it determines that health plans have an undue advantage negotiating the terms of contracts with health care providers. The legislative intent clarifies that the act is not intended to apply or affect collective bargaining relationships involving health care providers who are employ- ees or rights relating to collective bargaining arising under applicable federal/state collective bargaining statutes.
Read the full memo (964 words)
Section 2 cites the bill as the Health Care Consumer and Provider Protection Act.
Section 3 amends article 49 to the public health law by adding a new title 1 1 1 titled Collective Negotiations by Health Care Providers with Health Care Plans.
Justification
This legislation authorizes collective bargaining for independent contractor health care providers or an entity that employs or utilizes health care providers to provide healthcare services including physi- cians. This bill would create a system under which the state would closely monitor those negotiations, and any negotiations involving fee- related matters would only be permitted when an individual managed care plan controls a substantial share of the managed care market. The Commissioner of Health would be authorized to approve the health care providers' representative request to negotiate based upon the benefits to be achieved for providers and consumers of health services, and is required to review any offer submitted to the health care providers' representative prior to sharing with affected health care providers. The legislation would also create a mechanism for resolving disputes when there is an impasse or when the health plan refuses to negotiate. The bill would also direct the Commissioner of Health with input from the Superintendent of Insurance and the Attorney General to approve any final agreement as well as monitor the implemented agreements to ensure continued compliance with the law. Importantly, this legislation would not authorize strikes or concerted action by health care providers in response to negotiations with health care plans.
Section 4. This act shall take effect 120 days after it shall have become a law, provided that the department of health may promulgate and establish any regulations pursuant hereto prior to the effective date.
Justification
Currently, federal antitrust laws prohibit individual health care providers from collectively negotiating any provisions of contracts they sign with managed care entities. This bill would allow health care providers in New York State to conduct some collective negotiations by creating a system under which the state would closely monitor those negotiations, facilitate resolution of negotiation impasses, and active- ly monitor implementation of agreements. Negotiations involving fee-re- lated matters would be prohibited unless an individual managed care plan controls a substantial share of the managed care market.
Giving health care providers greater ability to advocate for patients in contract negotiations is critical since large health maintenance organ- izations control huge shares of the health insurance market, both in New York and across the country. In the last few years we have seen the mergers of United Healthcare and Oxford, MVP and Preferred Care, and Welipoint with Wellchoice (Empire). As of March 2008, almost 75% of the enrollees in managed care plans in New York State were enrolled in just five health plans (GM/HIP, United/Oxford/Amerchoice, Excellus, Empire and MVP/Preferred Care). We have also seen an emerging trend of long- time not for profit health insurance companies such as Empire and HIP seeking to convert to for-profit status.
Due to the current imbalance of negotiating power in favor of the managed care plans, physicians and other health care providers are offered take-it-or-leave-it contracts by health plans that significantly hamper their ability to provide quality patient care. These contracts permit burdensome processes and unjustifiably long wait times for obtaining pre-authorization to provide needed patient care; impose limi- tations on whom a physician or other health care provider 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 physi- cian or other health care provider consent; and cede to physicians and other health care providers the legal consequences for patients harmed by health plan utilization review decisions.
This bill, by allowing independent contractor physicians and health care providers to conduct some collective negotiations while being closely monitored by the state, would give physicians and health care providers greater ability to advocate for patients in contract negotiations. This bill would create a system under which the state would closely monitor those negotiations, and any negotiations involving fee-related matters would only be permitted when an individual managed care plan controls a substantial share of the managed care market. This legislation would not authorize strikes or boycotts of health benefit plans by physicians.
Legislative history
2013-2014: S.3690 Hannon/ A.5692 Gottfried 2015-2016: S.1157-A Hannon / A.336-A Gottfried 2017-2018: S.3663 Hannon/ No Same as 2019: New Bill
Fiscal implications
None to the State. The bill would provide the legal basis for an appro- priation of funds to implement the provisions of the bill.
Effective date
120 days after it shall have become a law, provided that the department of health may promulgate and establish any regulations pursuant hereto prior to the effective date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.