Senate Bill S1434

                                BILL NUMBER:S1434

TITLE OF BILL:
An act
to amend the insurance law and the public health law,
in relation to prohibiting accident and
health insurers from offering incentives to health care providers
to prescribe a specific drug or medical product

PURPOSE:
To prohibit insurers from offering incentives to health care providers
for issuing or changing prescriptions.

SUMMARY OF PROVISIONS:
Section 1 - Amends section 3217-b of the Insurance Law to add new
subsection (j), which prohibits an insurer from providing payment or
incentive to a health care provider to issue or change a prescription
for a specific drug or medical product.

Section 2 - Amends section 4325 of the Insurance Law to add new
subsection (k), which prohibits an insurer from providing payment or
incentive to a health care provider to issue or change a prescription
for specific drug or medical product.

Section 3 - Amends section 4406-c of the Public Health Law to add a new
subdivision 5-e, which prohibits a healthcare plan from providing
              

payment or incentive to a health care provider to issue or change a
prescription for a specific drug or medical product.

Section 4- Effective date is ninety days after becoming a law.

JUSTIFICATION:
It has been reported that some insurance companies are providing
financial incentives to doctors for switching patients' prescriptions
to less expensive drugs. Some health plans have offered as much as
$100 each time a physician switches a patient's prescription from a
brand name to a generic. An upstate New York health plan began a
pilot project with several medical groups in 2006 as part of a
campaign to boost generic drug use. In this pilot, physicians who
increased their ratio of generic drug prescriptions to brand-name
drugs by five percentage points, would receive a slightly higher
reimbursement for their patient office visits.

While lowering health care costs is an essential and necessary task if
we are to meet the goal of ensuring that every New Yorker has
affordable quality health care, insurance companies should not offer
incentives to influence medical decisions. Monetary rewards for
health care providers who switch patients' prescriptions from a
costlier drug to a less expensive one should not be an acceptable
practice. This legislation would prevent companies in New York from
providing "kickbacks" to participating practitioners for changing
prescriptions. Although many generics work as well as their
counterpart brand-name products, ethical medical practice requires
that a prescribers' independent clinical judgment not be compromised.
A patient's diagnosis, symptoms, risk of complications, medical
profile and prior clinical history should be taken into account prior


to changing or prescribing a prescription. The decision to prescribe
a particular medication should be made without concern for financial
gain.

LEGISLATIVE HISTORY:
2009-2010: S.3037- Referred to Insurance
2008:      S.7516 - Referred to Insurance

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Ninety days after becoming a law.