STATE OF NEW YORK ________________________________________________________________________ 4785--A 2023-2024 Regular Sessions IN SENATE February 14, 2023 ___________ Introduced by Sens. RIVERA, COMRIE, HARCKHAM, KRUEGER, MAY, SKOUFIS -- read twice and ordered printed, and when printed to be committed to the Committee on Health -- recommitted to the Committee on Health in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee 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 Assem- bly, do enact as follows: 1 Section 1. Statement of legislative intent. The legislature finds that 2 collective negotiation by competing health care providers for the terms 3 and conditions of contracts with health plans can result in beneficial 4 results for health care consumers. The legislature further finds 5 instances where health plans dominate the market to such a degree that 6 fair and adequate negotiations between health care providers and the 7 plans are adversely affected, so that it is necessary and appropriate to 8 provide for a system of collective action on behalf of health care 9 providers. Consequently, the legislature finds it appropriate and neces- 10 sary to displace competition with regulation of health plan-provider 11 agreements and authorize collective negotiations on the terms and condi- 12 tions of the relationship between health care plans and health care 13 providers so the imbalances between the two will not result in adverse 14 conditions of health care. This act is not intended to apply to or 15 affect in any respect collective bargaining relationships which arise 16 under applicable federal or state collective bargaining statutes. 17 § 2. This act shall be known and may be cited as the "health care 18 consumer and provider protection act". 19 § 3. Article 49 of the public health law is amended by adding a new 20 title III to read as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08052-02-4
S. 4785--A 2 1 TITLE III 2 COLLECTIVE NEGOTIATIONS BY HEALTH CARE 3 PROVIDERS WITH HEALTH CARE PLANS 4 Section 4920. Definitions. 5 4920-a. Non-fee related collective negotiation authorized. 6 4920-b. Fee related collective negotiation. 7 4920-c. Collective negotiation requirements. 8 4920-d. Requirements for health care providers' representative. 9 4920-e. Certain collective action prohibited. 10 4920-f. Fees. 11 4920-g. Monitoring of agreements. 12 4920-h. Confidentiality. 13 4920-i. Severability and construction. 14 § 4920. Definitions. For purposes of this title: 15 1. "Health care plan" means an entity (other than a health care 16 provider) that approves, provides, arranges for, or pays for health care 17 services, including but not limited to: 18 (a) a health maintenance organization licensed pursuant to article 19 forty-three of the insurance law or certified pursuant to article 20 forty-four of this chapter; 21 (b) any other organization certified pursuant to article forty-four of 22 this chapter; or 23 (c) an insurer or corporation subject to the insurance law. 24 2. "Person" means an individual, association, corporation, or any 25 other legal entity. 26 3. "Health care providers' representative" means a third party who is 27 authorized by health care providers to negotiate on their behalf with 28 health care plans over contractual terms and conditions affecting those 29 health care providers. 30 4. "Strike" means a work stoppage in part or in whole, direct or indi- 31 rect, by a health care provider or health care providers to gain compli- 32 ance with demands made on a health care plan. 33 5. "Substantial market share in a business line" exists if a health 34 care plan's market share of a business line within the geographic area 35 for which a negotiation has been approved by the commissioner, alone or 36 in combination with the market shares of affiliates, exceeds either ten 37 percent of the total number of covered lives in that service area for 38 such business line or twenty-five thousand lives, or if the commissioner 39 determines the market share of the insurer in the relevant insurance 40 product and geographic markets for the services of the providers seeking 41 to collectively negotiate significantly exceeds the countervailing 42 market share of the providers acting individually. 43 6. "Health care provider" means a person who is licensed, certified, 44 registered or authorized pursuant to title eight of the education law 45 and who practices that profession as a health care provider as an inde- 46 pendent contractor and/or who is an owner, officer, shareholder, or 47 proprietor of a health care provider, or an entity that employs or 48 utilizes health care providers to provide health care services, includ- 49 ing but not limited to a hospital licensed under article twenty-eight of 50 this chapter or an accountable care organization under article twenty- 51 nine-E of this chapter; or an entity authorized under articles thirty- 52 six or forty of this chapter; or a fiscal intermediary operating pursu- 53 ant to section three hundred sixty-five-f of the social services law. A 54 health care provider under title eight of the education law who prac- 55 tices as an employee of a health care provider shall not be deemed a 56 health care provider for purposes of this title.
S. 4785--A 3 1 § 4920-a. Non-fee related collective negotiation authorized. 1. Health 2 care providers practicing within the geographic area for which a negoti- 3 ation has been approved by the commissioner may meet and communicate for 4 the purpose of collectively negotiating the following terms and condi- 5 tions of provider contracts with the health care plan: 6 (a) the details of the utilization review plan as defined pursuant to 7 subdivision ten of section forty-nine hundred of this article and 8 subsection (j) of section four thousand nine hundred of the insurance 9 law; 10 (b) coverage provisions; health care benefits; benefit maximums, 11 including benefit limitations; and exclusions of coverage; 12 (c) the definition of medical necessity; 13 (d) the clinical practice guidelines used to make medical necessity 14 and utilization review determinations; 15 (e) preventive care and other medical management practices; 16 (f) drug formularies and standards and procedures for prescribing 17 off-formulary drugs; 18 (g) respective physician liability for the treatment or lack of treat- 19 ment of covered persons; 20 (h) the details of health care plan risk transfer arrangements with 21 providers; 22 (i) plan administrative procedures, including methods and timing of 23 health care provider payment for services; 24 (j) procedures to be utilized to resolve disputes between the health 25 care plan and health care providers; 26 (k) patient referral procedures including, but not limited to, those 27 applicable to out-of-network referrals; 28 (l) the formulation and application of health care provider reimburse- 29 ment procedures; 30 (m) quality assurance programs; 31 (n) the process for rendering utilization review determinations 32 including: establishment of a process for rendering utilization review 33 determinations which shall, at a minimum, include: written procedures to 34 assure that utilization reviews and determinations are conducted within 35 the timeframes established in this article; procedures to notify an 36 enrollee, an enrollee's designee and/or an enrollee's health care 37 provider of adverse determinations; and procedures for appeal of adverse 38 determinations, including the establishment of an expedited appeals 39 process for denials of continued inpatient care or where there is immi- 40 nent or serious threat to the health of the enrollee; and 41 (o) health care provider selection and termination criteria used by 42 the health care plan. 43 2. Nothing in this section shall be construed to allow or authorize an 44 alteration of the terms of the internal and external review procedures 45 set forth in law. 46 3. Nothing in this section shall be construed to allow a strike of a 47 health care plan by health care providers or plans as otherwise set 48 forth in the laws of this state. 49 4. Nothing in this section shall be construed to allow or authorize 50 terms or conditions which would impede the ability of a health care plan 51 to obtain or retain accreditation by the national committee for quality 52 assurance or a similar body. 53 § 4920-b. Fee related collective negotiation. 1. If the health care 54 plan has substantial market share in a business line in any geographic 55 area for which a negotiation has been approved by the commissioner, 56 health care providers practicing within that geographic area may collec-
S. 4785--A 4 1 tively negotiate the following terms and conditions relating to that 2 business line with the health care plan: 3 (a) the fees assessed by the health care plan for services, including 4 fees established through the application of reimbursement procedures; 5 (b) the conversion factors used by the health care plan in a 6 resource-based relative value scale reimbursement methodology or other 7 similar methodology; provided the same are not otherwise established by 8 state or federal law or regulation; 9 (c) the amount of any discount granted by the health care plan on the 10 fee of health care services to be rendered by health care providers; 11 (d) the dollar amount of capitation or fixed payment for health 12 services rendered by health care providers to health care plan enrol- 13 lees; 14 (e) the procedure code or other description of a health care service 15 covered by a payment and the appropriate grouping of the procedure 16 codes; or 17 (f) the amount of any other component of the reimbursement methodology 18 for a health care service. 19 2. Nothing herein shall be deemed to affect or limit the right of a 20 health care provider or group of health care providers to collectively 21 petition a government entity for a change in a law, rule, or regulation. 22 § 4920-c. Collective negotiation requirements. 1. Collective negoti- 23 ation rights granted by this title must conform to the following 24 requirements: 25 (a) health care providers may communicate with other health care 26 providers regarding the contractual terms and conditions to be negoti- 27 ated with a health care plan; 28 (b) health care providers may communicate with health care providers' 29 representatives; 30 (c) a health care providers' representative is the only party author- 31 ized to negotiate with health care plans on behalf of the health care 32 providers as a group; 33 (d) a health care provider can be bound by the terms and conditions 34 negotiated by the health care providers' representatives; and 35 (e) in communicating or negotiating with the health care providers' 36 representative, a health care plan is entitled to contract with or offer 37 different contract terms and conditions to individual competing health 38 care providers. 39 2. A health care providers' representative may not represent more than 40 thirty percent of the market of health care providers or of a particular 41 health care provider type or specialty practicing in the geographic area 42 for which a negotiation has been approved by the commissioner if the 43 health care plan covers less than five percent of the actual number of 44 covered lives of the health care plan in the area, as determined by the 45 department. 46 3. Nothing in this section shall be construed to prohibit collective 47 action on the part of any health care provider who is a member of a 48 collective bargaining unit recognized pursuant to the national labor 49 relations act. 50 § 4920-d. Requirements for health care providers' representative. 1. 51 Before engaging in collective negotiations with a health care plan on 52 behalf of health care providers, a health care providers' representative 53 shall file with the commissioner, in the manner prescribed by the 54 commissioner, information identifying the representative, the represen- 55 tative's plan of operation, and the representative's procedures to 56 ensure compliance with this title.
S. 4785--A 5 1 2. Before engaging in the collective negotiations, the health care 2 providers' representative shall also submit to the commissioner for the 3 commissioner's approval a report identifying the proposed subject matter 4 of the negotiations or discussions with the health care plan and the 5 efficiencies or benefits expected to be achieved through the negoti- 6 ations for both the providers and consumers of health services. The 7 commissioner shall not approve the report if the commissioner, in 8 consultation with the superintendent of financial services determines 9 that the proposed negotiations would exceed the authority granted under 10 this title. 11 3. The representative shall supplement the information in the report 12 on a regular basis or as new information becomes available, indicating 13 that the subject matter of the negotiations with the health care plan 14 has changed or will change. In no event shall the report be less than 15 every thirty days. 16 4. With the advice of the superintendent of financial services and the 17 attorney general, the commissioner shall approve or disapprove the 18 report not later than the twentieth day after the date on which the 19 report is filed. If disapproved, the commissioner shall furnish a writ- 20 ten explanation of any deficiencies, along with a statement of specific 21 proposals for remedial measures to cure the deficiencies. If the commis- 22 sioner does not so act within the twenty days, the report shall be 23 deemed approved. 24 5. A person who acts as a health care providers' representative with- 25 out the approval of the commissioner under this section shall be deemed 26 to be acting outside the authority granted under this title. 27 6. Before reporting the results of negotiations with a health care 28 plan or providing to the affected health care providers an evaluation of 29 any offer made by a health care plan, the health care providers' repre- 30 sentative shall furnish for approval by the commissioner, before dissem- 31 ination to the health care providers, a copy of all communications to be 32 made to the health care providers related to negotiations, discussions, 33 and offers made by the health care plan. 34 7. A health care providers' representative shall report the end of 35 negotiations to the commissioner not later than the fourteenth day after 36 the date of a health care plan decision declining negotiation, canceling 37 negotiations, or failing to respond to a request for negotiation. In 38 such instances, a health care providers' representative may request 39 intervention from the commissioner to require the health care plan to 40 participate in the negotiation pursuant to subdivision eight of this 41 section. 42 8. (a) In the event the commissioner determines that an impasse exists 43 in the negotiations, or in the event a health care plan declines to 44 negotiate, cancels negotiations or fails to respond to a request for 45 negotiation, the commissioner shall render assistance as follows: 46 (1) to assist the parties to effect a voluntary resolution of the 47 negotiations, the commissioner shall appoint a mediator from a list of 48 qualified persons maintained by the commissioner. If the mediator is 49 successful in resolving the impasse, then the health care providers' 50 representative shall proceed as set forth in this article; 51 (2) if an impasse continues, the commissioner shall appoint a fact- 52 finding board of not more than three members from a list of qualified 53 persons maintained by the commissioner, which fact-finding board shall 54 have, in addition to the powers delegated to it by the board, the power 55 to make recommendations for the resolution of the dispute;
S. 4785--A 6 1 (b) The fact-finding board, acting by a majority of its members, shall 2 transmit its findings of fact and recommendations for resolution of the 3 dispute to the commissioner, and may thereafter assist the parties to 4 effect a voluntary resolution of the dispute. The fact-finding board 5 shall also share its findings of fact and recommendations with the 6 health care providers' representative and the health care plan. If with- 7 in twenty days after the submission of the findings of fact and recom- 8 mendations, the impasse continues, the commissioner shall order a resol- 9 ution to the negotiations based upon the findings of fact and 10 recommendations submitted by the fact-finding board. 11 9. Any proposed agreement between health care providers and a health 12 care plan negotiated pursuant to this title shall be submitted to the 13 commissioner for final approval. The commissioner shall approve or 14 disapprove the agreement within sixty days of such submission. 15 10. The commissioner may collect information from other persons to 16 assist in evaluating the impact of the proposed arrangement on the 17 health care marketplace. The commissioner shall collect information from 18 health plan companies and health care providers operating in the same 19 geographic area. 20 § 4920-e. Certain collective action prohibited. 1. This title is not 21 intended to authorize competing health care providers to act in concert 22 in response to a report issued by the health care providers' represen- 23 tative related to the representative's discussions or negotiations with 24 health care plans. 25 2. No health care providers' representative shall negotiate any agree- 26 ment that excludes, limits the participation or reimbursement of, or 27 otherwise limits the scope of services to be provided by any health care 28 provider or group of health care providers with respect to the perform- 29 ance of services that are within the health care provider's scope of 30 practice, license, registration, or certificate. 31 § 4920-f. Fees. Each person who acts as the representative or negoti- 32 ating parties under this title shall pay to the department a fee to act 33 as a representative. The commissioner, by rule, shall set fees in 34 amounts deemed reasonable and necessary to cover the costs incurred by 35 the department in administering this title. Any fee collected under this 36 section shall be deposited in the state treasury to the credit of the 37 general fund/state operations - 003 for the New York state department of 38 health fund. 39 § 4920-g. Monitoring of agreements. The commissioner shall actively 40 monitor agreements approved under this title to ensure that the agree- 41 ment remains in compliance with the conditions of approval. Upon 42 request, a health care plan or health care provider shall provide infor- 43 mation regarding compliance. The commissioner may revoke an approval 44 upon a finding that the agreement is not in substantial compliance with 45 the terms of the application or the conditions of approval. 46 § 4920-h. Confidentiality. All reports and other information required 47 to be reported to the department of law under this title including 48 information obtained by the commissioner pursuant to subdivision ten of 49 section forty-nine hundred twenty-d of this title shall not be subject 50 to disclosure under article six of the public officers law or article 51 thirty-one of the civil practice law and rules. 52 § 4920-i. Severability and construction. The provisions of this title 53 shall be severable, and if any court of competent jurisdiction declares 54 any phrase, clause, sentence or provision of this title to be invalid, 55 or its applicability to any government, agency, person or circumstance 56 is declared invalid, the remainder of this title and its relevant appli-
S. 4785--A 7 1 cability shall not be affected. The provisions of this title shall be 2 liberally construed to give effect to the purposes thereof. 3 § 4. This act shall take effect on the one hundred twentieth day after 4 it shall have become a law; provided that the commissioner of health is 5 authorized to promulgate any and all rules and regulations and take any 6 other measures necessary to implement this act on its effective date on 7 or before such date.