BILL NUMBER: S5527
SPONSOR: SANDERS
 
TITLE OF BILL:
An act to amend the public health law and the insurance law, in relation
to certain contracts or agreements by health maintenance organizations
 
PURPOSE OR GENERAL IDEA OF BILL:
This legislation would prohibit or restrict a number of practices
between HMOs and Health Care Providers.
 
SUMMARY OF SPECIFIC PROVISIONS:
This bill adds three new subdivisions to section 4406-c of the Public
Health Law. Subdivision 11 would prohibit the use of "most favored
nation" clauses which arbitrarily lower reimbursement levels for the
provision of health care services.
Subdivision 12 would ban the use of contract language which prohibits
the ability of a physician to make referrals to other health care
providers.
Subdivision 13 would prohibit insurers from mandating the substitution
of a pharmaceutical agent (other than a generic equivalent) by any
person other than the prescribing professional or a pharmacist with whom
a prescribing physician has a collaboration agreement permitting substi-
tution.
Section 2 of the bill makes the same changes to section 3217-b of the
insurance Law.
Section 3 of the bill makes the same changes to section 4325 of the
insurance Law.
Section 4 of the bill is the effective date.
 
JUSTIFICATION:
Frequently, physicians and other health care providers provide health
care to the uninsured and economically disadvantaged with very little or
no compensation. Unfortunately, managed care insurance plans have
created a disincentive to the provision of free and reduced cost care by
inserting clauses into their contracts which requires a physician, or
other health care provider, to accept reimbursement for a
treatment/procedure at the lowest amount such provider has charged any
entity for the same treatment. Consequently, if a provider wishes to
only charge a nominal fee in a particular instance, that provider jeop-
ardizes his or her reimbursement for all his or her patients. Physi-
cians, hospitals, and other providers should be allowed and encouraged
to provide charity care without endangering the future of their prac-
tices.
Insurance plans should not be permitted to control the referral process,
which the treating physician uses to ensure that the patient is seen and
treated by the mast appropriate medical professional. The issue of
"in-network" or "out-of-network" providers should not be permitted to
force treating physicians to refer to "in-network" providers only. While
the plans may have different payment arrangements for in and out-of-net-
work providers, an outright ban on out-of-network referrals is tanta-
mount to a ban on the provision of sound medical advice.
A growing number of insurance plans are arbitrarily requiring the
substitution of "similar" pharmaceutical agents (as opposed to generic
equivalents.) This can be at the expense of the patient's health, as the
prescribing professional may have, in fact, chosen a certain agent
because of a particular quality or certain circumstances or symptoms
surrounding the patient's case. Only a treating professional, with full
knowledge of the patient's history, should have authority to change a
patient's medication.
 
PRIOR LEGISLATIVE HISTORY:
2022 SENATE THIRD READING
2022 passed assembly
2021 SENATE THIRD READING
2021 assembly third reading
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
This act shall take effect 180 days after it shall have become law.