Amd S4406-c, Pub Health L; amd SS3217-b & 4325, Ins L
 
Relates to certain prohibitions in contracts or agreements by health maintenance organizations; prohibits clauses which entitle reimbursement at the lowest price or rate; prohibits contracts which restrict referral of patients based solely upon a health care provider's status with a managed care product; prohibits disclosure of an enrollee's diagnosis on a prescription as a condition for authorizing coverage for payment or dispensing of a prescription; and prohibits contracts which allow for the substitution of a pharmaceutical drug or agent by any person other than the prescribing health care professional.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2210
SPONSOR: Gottfried (MS)
 
TITLE OF BILL: An act to amend the public health law and the insur-
ance law, in relation to certain contracts or agreements by health main-
tenance 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 four new subdivisions to section 4406-c of the Public
Health Law. Subdivision 6 would prohibit the use of "mast favored
nation" clauses which arbitrarily lower reimbursement levels far the
provision of health care services.
Subdivisions 9 and 10 would ban the use of contract language which
prohibits the ability of a physician to make referrals to other health
care providers.
Subdivision 11 would ban contract language which mandates the provision
of a patient's diagnosis on the written prescription as a condition for
covering a prescription drug.
Subdivision 12 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. The bill also makes the same changes to section 3217-b and 4325
of the Insurance Law.
 
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 cast care by
inserting clauses into their contracts which requires a physician, or
other health care provider, to accept reimbursement far a
treatment/procedure at the lowest amount such provider has charged any
entity far the same treatment. Consequently, if a physician wishes to
only charge a nominal fee in a particular instance, that physician jeop-
ardized his or her reimbursement far all of 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.
Some plans require the provision of the patient's diagnosis, on the
prescription, in order to consider coverage for the pharmaceutical drug.
Not only is this practice a gross violation of patient privacy, but it
serves to break the bonds of confidence between the patient and physi-
cians and can place some patients in the awkward position of having to
choose between receiving important medications and divulging personal
health information. In addition, 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 treat-
ing professional, with full knowledge of the patient's history, should
have authority to change a patient's medication.
 
PRIOR LEGISLATIVE HISTORY:
2002: A.10543 - advanced to 3rd reading
2003-2004: A.3446- passed Assembly
2005-2006: A.2204- passed Assembly
2007-2008: A.4607-B - passed Assembly
2009-2010: A.726-A - passed Assembly
2011-2012: A. 594 - passed Assembly
2013-2014: A4466-A - passed Assembly
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
This act shall take effect 180 days after it shall have become law.
STATE OF NEW YORK
________________________________________________________________________
2210
2015-2016 Regular Sessions
IN ASSEMBLY
January 15, 2015
___________
Introduced by M. of A. GOTTFRIED, DINOWITZ, ENGLEBRIGHT, GALEF, PAULIN,
CUSICK, KAVANAGH, ROSENTHAL, TITONE -- Multi-Sponsored by -- M. of A.
AUBRY, BRENNAN, COLTON, COOK, CYMBROWITZ, GLICK, GUNTHER, HEASTIE,
HOOPER, LIFTON, PERRY, RIVERA, ROBINSON, SCARBOROUGH -- read once and
referred to the Committee on Health
AN ACT to amend the public health law and the insurance law, in relation
to certain contracts or agreements by health maintenance organizations
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 7 of section 4406-c of the public health law,
2 as added by chapter 705 of the laws of 1996 and as renumbered by chapter
3 487 of the laws of 2010, is renumbered subdivision 13 and four new
4 subdivisions 9, 10, 11 and 12 are added to read as follows:
5 9. No contract or agreement between a health care plan and a health
6 care provider shall contain any clause which entitles such health care
7 plan to reimburse the health care provider at the lowest price or rate
8 that such health care provider has charged another person or entity for
9 rendering the same treatment or performing the same procedure.
10 10. No health care plan shall by contract, written policy or written
11 procedure prohibit any health care provider from referring a patient or
12 enrollee to a health care provider based solely upon such health care
13 provider's participation status with the managed care product subscribed
14 to by the patient or enrollee.
15 11. No health care plan shall by contract, written policy or written
16 procedure require the disclosure of an enrollee's diagnosis on a
17 prescription as a condition for dispensing of a pharmaceutical drug or
18 agent, unless otherwise required by law.
19 12. No health care plan shall by contract, written policy or procedure
20 provide for or allow the substitution of a pharmaceutical drug or agent
21 (other than a generic substitution) by any person other than the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02982-01-5
A. 2210 2
1 prescribing health care professional or by a pharmacist under section
2 sixty-eight hundred one-a of the education law.
3 § 2. Subsections (h) and (i) of section 3217-b of the insurance law,
4 as relettered by chapter 237 of the laws of 2009, are relettered
5 subsections (m) and (n) and four new subsections (h), (i), (k) and (l)
6 are added to read as follows:
7 (h) No contract or agreement between an insurer and a health care
8 provider shall contain any clause which entitles such insurer to reim-
9 burse the health care provider at the lowest price or rate that such
10 health care provider has charged another person or entity for rendering
11 the same treatment or performing the same procedure.
12 (i) No insurer shall by contract, written policy or written procedure
13 prohibit any health care provider from referring an insured to a physi-
14 cian based solely upon such physician's participation status with the
15 insurance product subscribed to by the insured.
16 (k) No insurer shall by contract, written policy or written procedure
17 require the disclosure of an insured's diagnosis on a prescription as a
18 condition for authorizing the coverage for or payment or dispensing of a
19 pharmaceutical drug or agent, unless otherwise required by law.
20 (l) No insurer which maintains a drug formulary, or which contracts
21 with another entity to maintain a drug formulary, shall by contract,
22 written policy or procedure provide for or allow the substitution of a
23 pharmaceutical drug or agent (other than a generic substitution) by any
24 person other than the prescribing health care professional or by a phar-
25 macist under section sixty-eight hundred one-a of the education law.
26 § 3. Subsections (i) and (j) of section 4325 of the insurance law, as
27 relettered by chapter 487 of the laws of 2010, are relettered
28 subsections (n) and (o) and four new subsections (i), (j), (l) and (m)
29 are added to read as follows:
30 (i) No contract or agreement between an insurer and a health care
31 provider shall contain any clause which entitles such insurer to reim-
32 burse the health care provider at the lowest price or rate that such
33 health care provider has charged another person or entity for rendering
34 the same treatment or performing the same procedure.
35 (j) No insurer shall by contract, written policy or written procedure
36 prohibit any health care provider from referring an insured to a physi-
37 cian based solely upon such physician's participation status with the
38 insurance product subscribed to by the insured.
39 (l) No insurer shall by contract, written policy or written procedure
40 require the disclosure of an insured's diagnosis on a prescription as a
41 condition for authorizing the coverage for or payment or dispensing of a
42 pharmaceutical drug or agent, unless otherwise required by law.
43 (m) No insurer which maintains a drug formulary, or which contracts
44 with another entity to maintain a drug formulary, shall by contract,
45 written policy or procedure provide for or allow the substitution of a
46 pharmaceutical drug or agent (other than a generic substitution) by any
47 person other than the prescribing health care professional or by a phar-
48 macist under section sixty-eight hundred one-a of the education law.
49 § 4. This act shall take effect on the one hundred eightieth day after
50 it shall have become a law, provided that the relettering of subsection
51 (n) of section 3217-b and the relettering of subsection (o) of section
52 4325 of the insurance law made by sections two and three of this act,
53 respectively, shall not affect the repeal of such subsections and shall
54 be deemed repealed therewith.