NY State Senate Bill 2009-S417

Archive: Last Bill Status - In Senate Committee Judiciary Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
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Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to judiciary
Jan 07, 2009	referred to judiciary

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2009-S417 (ACTIVE) - Details

Current Committee:: Senate Judiciary
Law Section:: General Obligations Law
Laws Affected:: Add §11-108, Gen Ob L; amd §1602, CPLR; amd §4410, Pub Health L

2009-S417 (ACTIVE) - Summary

Provides that whenever health care organizations delay, fail or refuse to approve, provide, arrange for, or pay for in a timely manner any health care service that it is contractually obligated to perform, it shall be liable for any personal injury, death or damages caused by delay, failure or refusal.

2009-S417 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S417

 TITLE OF BILL :
An act to amend the general obligations law, the civil practice law
and rules and the public health law, in relation to holding health
care organizations responsible for the consequences of their decisions


 PURPOSE :
To promote the rights of consumers of health care insurance by making
insurance providers legally liable for damages resulting from the
failure to provide and pay for necessary medical treatment.

 SUMMARY OF PROVISIONS :
Section 1.  Legislative Findings.

Section 2.  Amends the General Obligations Law by adding a new Section
11-108 to provide that a health insurance carrier, health maintenance
organization or other managed care entity for a health care plan has
the duty to make prompt and adequate health care available to all
insureds and enrollees and can be held liable for damages for harm or
personal injury caused by its failure to exercise such care.
Additionally, health care organizations are not given any immunity
from liability if an enrollee either chooses to receive treatment from
another provider or finds another source of payment for such
treatment. This section also prohibits a health care organization from

entering into a contract with any health care provider if such
contract contains an indemnification or hold harmless clause. This
section allows for health care organizations to charge a nominal fee
for providing documentation that relate to its delay or refusal to
provide or pay for health care services.

Section 3.  Amends Section 1602 of the Civil Practice Law and Rules by
adding a new subdivision 13 which limits the ability of health care
organizations to claim indemnification if an action is brought against
them.

Section 4.  Amends subdivision 1 of Section 4410 of the Public Health
Law to indicate that although health care organizations are not
considered practitioners of medicine, their liability is not
diminished in relation to the administrative decision and services
they render. This section also prohibits the inclusion of a hold
harmless or indemnification clause in any contract or agreement
between health care organizations and health care providers.

Section 5.  Maintains that if any provision of this act is deemed
invalid, such invalidity shall not affect the other provisions.
Regardless of any invalid provision, the other provisions which can
take effect will be fully implemented.

Section 6.  Sets forth the effective date.

 JUSTIFICATION :
As health insurers and managed care groups are receiving greater
pressure to keep medical treatment costs down, there is a growing
concern that the quality and availability of care is diminishing.
Insurance companies and HMOs that are striving to achieve higher
profits and a competitive edge are denying their policyholders the
access to care and treatment that they need and deserve.  This
bottomline mentality has forced some disgruntled insureds to take
their cases of denial of treatment or payment for such treatment to
the courts. Those policyholders who suffer pain and injuries because
of denial of care on the part of the insurer or HMO should have the
right to place the blame on the insurer, just as a patient would sue a
physician for medical malpractice. Many HMOs and insurance companies
purport that they do not make medical decisions and therefore cannot
be held liable for damages. However, the denial of payment or
reimbursement for tests or treatments is essentially denying the
actual health care.

Health insurance carriers make administrative decisions on whether or
not to authorize medical procedures while considering both the
necessity of the treatment and its cost impact. In the management of
these benefit plans, cost implications too often overshadow meeting
the needs of patients.  HMOs have argued that they are given immunity
from liability under the 1974 federal statute ERISA, the Employee
Retirement Income Security Act. The Act was created to ensure that
employers fulfilled their pension plan obligations. HMOs argue that
ERISA's provisions pre-empt any state law relating to any employee
benefit plan, protecting them from malpractice suits which are pursued
by enrollees in an employer-sponsored health insurance plan. While
ERISA needs reform on the federal level, this bill seeks to effect
positive change in New York's health insurance arena by making health
care organizations take responsibility for their actions. New York,
like several other states that have passed similar pieces of
legislation, can provide the assurance that its residents will receive
quality health care.

Consumers who have experienced undue pain and suffering because of
their insurer's refusal to provide necessary medical attention need
legal recourse. By making health care organizations liable for the
decisions they make, more attention will be paid to the enrollees who
require care instead of enlarging profit margins.

 LEGISLATIVE HISTORY :
2007/2008 - S.740  Remained in the Senate Committee on Judiciary
2005/2006 - S.232  Remained in the Senate Committee on Judiciary
2003/2004 - S.214  Remained in the Senate Committee on Judiciary
2001/2002 - S.1980 Remained in the Senate Committee on Judiciary
1999/2000 - S.801  Remained in the Senate Committee on Judiciary

 FISCAL IMPLICATIONS FOR STATE & LOCAL GOVERNMENTS :
None.

 EFFECTIVE DATE :
Immediately.

2009-S417 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   417

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  Sens.  BRESLIN,  ADAMS,  DILAN, DUANE, HASSELL-THOMPSON,
  KRUEGER, KRUGER, MONTGOMERY, ONORATO,  OPPENHEIMER,  PARKER,  SAMPSON,
  SAVINO,  SCHNEIDERMAN,  SMITH,  STACHOWSKI,  STAVISKY, VALESKY -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee on Judiciary

AN  ACT to amend the general obligations law, the civil practice law and
  rules and the public health law, in relation to  holding  health  care
  organizations responsible for the consequences of their decisions

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings. The legislature  finds  that  a  wide
variety  of  entities are integrating the functions of paying for health
care, determining what health care is paid for, and providing the  care.
This  integration  is breaking down traditional distinctions as to func-
tion. Increasingly, payor determinations are governing health  care  and
controlling  decisions  that  in  the  past were the exclusive domain of
health care professionals and patients. The  legislature  further  finds
that this integration makes it imperative that health care organizations
be  held fully responsible for the consequences of their decisions, much
as health care professionals have been held responsible for  the  conse-
quences of their decisions.
  S  2.  The  general obligations law is amended by adding a new section
11-108 to read as follows:
  S 11-108. RESPONSIBILITY OF  HEALTH  CARE  ORGANIZATIONS.    1.  DEFI-
NITIONS.  FOR  PURPOSES  OF  THIS  SECTION,  UNLESS  THE CONTEXT CLEARLY
REQUIRES OTHERWISE:
  (A)  "HEALTH  CARE  ORGANIZATION"  MEANS  AN  ENTITY  THAT   APPROVES,
PROVIDES,  ARRANGES FOR, OR PAYS FOR HEALTH CARE SERVICES, INCLUDING BUT
NOT LIMITED TO AN ENTITY LICENSED UNDER THE INSURANCE LAW OR LICENSED OR
CERTIFIED UNDER THE PUBLIC HEALTH LAW.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD03585-01-9

S. 417                              2

  (B) "HEALTH CARE PROVIDER" MEANS AN ENTITY LICENSED OR CERTIFIED UNDER
ARTICLE TWENTY-EIGHT, THIRTY-SIX OR FORTY-FOUR OF THE PUBLIC HEALTH LAW;
AN ENTITY LICENSED OR CERTIFIED UNDER ARTICLE SIXTEEN OR  THIRTY-ONE  OF
THE MENTAL HYGIENE LAW; A HEALTH CARE PRACTITIONER LICENSED OR CERTIFIED
UNDER  TITLE EIGHT OF THE EDUCATION LAW; OR A PROVIDER OF PHARMACEUTICAL
PRODUCTS AND SERVICES OR DURABLE MEDICAL EQUIPMENT.
  (C) "HEALTH CARE SERVICE"  MEANS  HEALTH  CARE  SERVICES,  TREATMENTS,
PRODUCTS OR EQUIPMENT PROVIDED BY A HEALTH CARE PROVIDER.
  2.  WHENEVER  A  HEALTH  CARE ORGANIZATION DELAYS, FAILS OR REFUSES TO
APPROVE, PROVIDE, ARRANGE FOR, OR PAY  FOR,  IN  A  TIMELY  MANNER,  ANY
HEALTH  CARE  SERVICES  TO A PERSON TO THE EXTENT IT IS CONTRACTUALLY OR
LEGALLY OBLIGATED TO DO SO, IT SHALL BE LIABLE FOR ANY PERSONAL  INJURY,
DEATH OR DAMAGES CAUSED BY THE DELAY, FAILURE OR REFUSAL.
  3.  THE  FAILURE  OF  THE PERSON (OR OF ANY OTHER PERSON ACTING ON THE
PERSON'S BEHALF) TO SEEK AN ALTERNATE PROVIDER OF  OR  TO  PAY  FOR  THE
HEALTH  CARE  SERVICE  SHALL NOT DIMINISH THE HEALTH CARE ORGANIZATION'S
LIABILITY OR CONSTITUTE CULPABLE CONDUCT FOR THE PURPOSES OF SECTION ONE
THOUSAND FOUR HUNDRED ELEVEN OF THE CIVIL PRACTICE LAW AND RULES.
  4. NOTHING IN THIS SECTION SHALL LIMIT ANY  OTHER  RIGHT,  REMEDY,  OR
CAUSE OF ACTION THAT ANY PERSON MAY OTHERWISE HAVE.
  5.  NO  CONTRACT  OR  AGREEMENT  BETWEEN  A HEALTH CARE PROVIDER AND A
HEALTH CARE ORGANIZATION SHALL DIRECTLY OR INDIRECTLY REQUIRE  A  HEALTH
CARE PROVIDER TO INDEMNIFY OR HOLD HARMLESS THE HEALTH CARE ORGANIZATION
FOR  ANY LIABILITY RESULTING FROM THE HEALTH CARE ORGANIZATION'S ACTS OR
OMISSIONS.
  6. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE ORGANIZATION AND ANY
ENTITY OR PERSON SHALL WAIVE OR LIMIT ANY LIABILITY OF THE  HEALTH  CARE
ORGANIZATION TO THE ENTITY OR PERSON UNDER THIS ARTICLE.
  7.  A  HEALTH  CARE  ORGANIZATION  SHALL, WITHIN TEN DAYS OF A WRITTEN
REQUEST FOR SAME, PROVIDE TO A PERSON OR  AN  ATTORNEY  OR  HEALTH  CARE
PRACTITIONER  AUTHORIZED  TO REPRESENT OR ACT ON BEHALF OF THE PERSON OR
THE PERSON'S ESTATE, AN OPPORTUNITY TO INSPECT AND TO RECEIVE COPIES  OF
ALL INFORMATION AND RECORDS RELATING OR PERTAINING TO ITS DELAY, FAILURE
OR  REFUSAL  TO  APPROVE,  PROVIDE, ARRANGE FOR, OR PAY FOR, IN A TIMELY
MANNER, ANY HEALTH CARE SERVICES TO THE EXTENT IT  IS  CONTRACTUALLY  OR
LEGALLY  OBLIGATED TO DO SO FOR THE PERSON. THE HEALTH CARE ORGANIZATION
MAY IMPOSE A REASONABLE CHARGE, NOT TO EXCEED THE  CHARGES  IMPOSED  FOR
INSPECTION AND COPIES AS SET FORTH IN SECTIONS SEVENTEEN AND EIGHTEEN OF
THE PUBLIC HEALTH LAW.
  8. IF THE TIME IN WHICH A PLAINTIFF COULD HAVE COMMENCED AN ACTION FOR
PROFESSIONAL  MALPRACTICE  FOR  THE ACT, ERROR OR OMISSION COMPLAINED OF
HAS EXPIRED PRIOR TO COMMENCEMENT OF AN ACTION BROUGHT PURSUANT TO  THIS
SECTION AGAINST A HEALTH CARE ORGANIZATION, THE DEFENDANT IN SAID ACTION
SHALL  BE  BARRED  FROM COMMENCING A THIRD-PARTY ACTION AGAINST A PERSON
NOT A PARTY WHO IS OR MAY BE LIABLE TO THAT DEFENDANT FOR ALL OR PART OF
THE PLAINTIFF'S CLAIM AGAINST THE DEFENDANT, AND AGAINST WHOM THE PLAIN-
TIFF CANNOT COMMENCE AN ACTION FOR PROFESSIONAL MALPRACTICE DUE  TO  THE
EXPIRATION  OF  THE  STATUTE OF LIMITATIONS PRIOR TO COMMENCEMENT OF THE
ACTION AGAINST THE DEFENDANT.
  S 3. Section 1602 of the civil practice law and rules  is  amended  by
adding a new subdivision 14 to read as follows:
  14.  NOT APPLY TO AN ACTION AGAINST A HEALTH CARE ORGANIZATION BROUGHT
PURSUANT TO SECTION 11-108 OF THE GENERAL OBLIGATIONS LAW.
  S 4. Subdivision 1 of section 4410 of the public health law, as  added
by chapter 938 of the laws of 1976, is amended to read as follows:

S. 417                              3

  1.  The  provision  of comprehensive health services directly or indi-
rectly, by a health maintenance organization through  its  comprehensive
health services plan shall not be considered the practice of the profes-
sion of medicine by such organization or plan.  However[,]:
  (A) THIS SUBDIVISION SHALL NOT BE CONSTRUED TO LIMIT ANY LIABILITY THE
HEALTH  MAINTENANCE  ORGANIZATION  OR  ITS COMPREHENSIVE HEALTH SERVICES
PLAN WOULD OTHERWISE HAVE RELATING TO ANY PROFESSIONAL SERVICES RENDERED
BY, ON BEHALF OF OR IN CONNECTION WITH THE ORGANIZATION OR PLAN;
  (B) each member, employee or agent of such organization or plan  shall
be  fully  and  personally  liable  and accountable for any negligent or
wrongful act or misconduct committed by him OR HER or any  person  under
his  OR  HER direct supervision and control while rendering professional
services on behalf of [such] THE organization or plan; AND
  (C) NO CONTRACT OR AGREEMENT BETWEEN A HEALTH MAINTENANCE ORGANIZATION
OR ITS COMPREHENSIVE HEALTH SERVICES PLAN AND ANY HEALTH  CARE  PROVIDER
SHALL REQUIRE THE HEALTH CARE PROVIDER TO INDEMNIFY OR HOLD HARMLESS THE
ORGANIZATION  OR  PLAN  FOR  ANY  LIABILITY THE ORGANIZATION OR PLAN MAY
INCUR.
  S 5. If any provision of this act or the application thereof shall  be
held to be invalid, such invalidity shall not affect other provisions or
other application of any provision of this act which can be given effect
without  the  invalid  provision  or  application,  and to that end, the
provisions and applications of this act are severable.
  S 6. This act shall take effect immediately.

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Senate Bill S417

Sponsored By

Archive: Last Bill Status - In Senate Committee Judiciary Committee

co-Sponsors

2009-S417 (ACTIVE) - Details

2009-S417 (ACTIVE) - Summary

2009-S417 (ACTIVE) - Sponsor Memo

2009-S417 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S417

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Sponsored By

Archive: Last Bill Status - In Senate Committee Judiciary Committee

co-Sponsors

2009-S417 (ACTIVE) - Details

2009-S417 (ACTIVE) - Summary

2009-S417 (ACTIVE) - Sponsor Memo

2009-S417 (ACTIVE) - Bill Text download pdf

Comments