Senate Bill S4597B

                                BILL NUMBER:S4597

TITLE OF BILL:
An act
to amend the public health law, in relation to registration of
office-based surgery facilities and
payments for the use thereof

PURPOSE:
To require accredited office-based surgery facilities to
register and obtain an operating certificate from the Department of
Health and to require health plans to provide payment to accredited
office-based surgical facilities for covered procedures performed in
such accredited facilities.

SUMMARY OF PROVISIONS:
This bill amends Section 230-d of the public
health law to require that office-based surgery facilities register
with the Department of Health to receive an operating certificate,
and to require health plans to provide reimbursement to office-based
surgical facilities in addition to the fee charged by the surgeon for
the performance of a covered procedure involving a health plan
enrollee or insured, provided that such office-based surgical facility
has achieved accredited status as required by Section 230-d (2).

EXISTING LAW:
              

Current law requires that office-based surgery facility
must obtain and maintain full accredited status by a
nationally-recognized accredited agency approved by the Commissioner
of Health. There are three accreditation entities which have been
approved by the Commissioner: Accreditation Association for
Ambulatory Health Care (AAAHC), American Association for
Accreditation of Ambulatory Surgery Facilities (AAAASF) and The Joint
Commission.

JUSTIFICATION:
In 2007, legislation was enacted to require that if
certain procedures are not performed in a hospital or other Article
28 facility, they must be performed in an accredited office-based
surgery facility. Sections of this legislation became effective on
January 14, 2008 and on July 14, 2009. This measure was the
culmination of the work of the Department of Health's Committee on
Quality Assurance in Office-Based Surgery (OBS).

The accreditation conferred upon these office-based surgical
facilities assures that these practices meet nationally recognized
standards for patient safety al1d quality care and include:
environment of care; emergency management; infection prevention and
control; life safety; medication
management; national patient safety goals; performance improvement;
record of care, treatment of services; rights and responsibilities of
the individual; and transplant safety.

Accredited office-based surgery facilities provide quality care at a
lower cost than care provided in more costly Article 28 ambulatory
surgery centers (ASCs) and hospitals. In fact, for thousands of New


Yorkers, these facilities represent critical access points for vital,
affordable health care services. However, many health plans refuse to
pay office-based surgery facilities a facility fee; this despite the
fact that accredited OBS facilities must shoulder the burden of
significant costs not unlike those of the ASCs and hospitals.
Unfortunately, there has been a lack of recognition of these costs on
the part of third party payors. More importantly, insurance companies
have also failed to recognize that the impact of non-payment of these
fees has been to drive procedures from the low cost office-based
surgery locations into the much more expensive hospital and other
Article 28 facilities. This inevitable shift will dramatically drive
up the cost of medical care. Sadly, numerous accredited OBS
facilities have already started to close and move procedures to more
expensive Article 28 facilities and hospitals.

Inexplicably, since the enactment of the office-based surgery
accreditation process, third party payors have cited the fact that
OBS facilities are not licensed as a basis for denial of claims. This
bill addresses that by establishing a registration and certification
process to provide OBS facilities with an added level of recognition
to better enable them to seek reimbursement for facility fees from
third party payors

In addition, those few third patty payors who have reimbursed
office-based facilities have done so only for in-network facilities.
To make matters worse, payors will often refuse to reimburse for
out-of-network facilities, even in cases where the insureds have
contracted and paid for out-of-network coverage. For the most part,
OBS facilities have been denied access to the health plans' network
further hindering their ability to seek reimbursement and negatively
impacting their patients' choice and access and to low cost, quality
care. This bill would correct such inequity. Specifically, the bill
would require third party payors to reimburse accredited OBS
facilities a facility fee that shall be calculated using the same
parameters (e.g. specific zip code and usual, customary rates of
non-federal payors) as those used in the calculation of the surgeon's
fee. Payment of a facility fee will assure the continued operation of
these safe and cost-effective OBS practices thereby maintaining
access to affordable, quality care for thousands of patients.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately provided subdivision 5 of section 230-d of
the public health law shall be deemed to have been in full force and
effect on and after January 18, 2008.

                                BILL NUMBER:S4597A

TITLE OF BILL:
An act
to amend the public health law, in relation to registration of
office-based surgery facilities and
payments for the use thereof

PURPOSE:
To require accredited office-based surgery facilities to
register and obtain an operating certificate from a nationally
recognized accrediting agency as designated by the Department of
Health and to health plans to provide payment to accredited
office-based surgical facilities for covered procedures performed in
such accredited facilities.

SUMMARY OF PROVISIONS:
This bill amends Section 230-d of the public
health law to require that office-based surgery facilities register
with a nationally-recognized accrediting agency as designated by the
Department of Health to receive an operating certificate. The bill
would also authorize accredited OBS facilities who have received an
operating certificate to seek reimbursement for a facility fee if the
health plan currently reimburses for the use of the facility charged
in connection with the same covered procedure performed at an
ambulatory surgery center or hospital, provided however, that when
              

calculating the appropriate rate of office-based surgery facility
fees, the health plans may also take into consideration certain
comparable and non-comparable costs and obligations of ambulatory
surgery centers and hospitals.

EXISTING LAW:
Current law requires that office-based surgery facility
must obtain and maintain full accredited status by a
nationally-recognized accrediting agency approved by the Commissioner
of Health. There are three accreditation entities which have been
approved by the Commissioner: Accreditation Association for
Ambulatory Health Care (AAAHC), American Association for
Accreditation of Ambulatory Surgery Facilities (AAAASF) and The Joint
Commission.

JUSTIFICATION:
In 2007, legislation was enacted to require that if
certain procedures are not performed in a hospital or other Article
28 facility, they must be performed in an accredited office-based
surgery facility. Sections of this legislation became effective on
January 14, 2008 and on July 14, 2009. This measure was the
culmination of the work of the Department of Health's Committee 011
Quality Assurance in Office-Based Surgery (OBS).

The accreditation conferred upon these office-based surgical
facilities assures that these practices meet nationally recognized
standards for patient safety and quality care and include:
environment of care; emergency management; infection prevention and
control; life safety;
medication management; national patient safety goals; performance


improvement; record of care, treatment of services; rights and
responsibilities of the individual; and transplant safety.

Accredited office-based surgery facilities provide quality care at a
lower cost than care provided in more costly Article 28 ambulatory
surgery centers (ASCs) and hospitals. In fact, for thousands of New
Yorkers, these facilities represent critical access points for vital,
affordable health care services. However, many health plans refuse to
pay office-based surgery facilities a facility fee; this despite the
fact that accredited OBS facilities must shoulder the burden of
significant costs not unlike those of the ASCs and hospitals.
Unfortunately, there has been a lack of recognition of these costs on
the part of third party payors. More importantly, insurance companies
have also failed to recognize that the impact of non-payment of these
fees has been to drive procedures from the low cost office-based
surgery locations into the much more expensive hospital and other
Article 28 facilities. This inevitable shift will dramatically drive
up the cost of medical care. Sadly, numerous accredited OBS
facilities have already started to close and move procedures to more
expensive Article 28 facilities and hospitals.

Inexplicably, since the enactment of the office-based surgery
accreditation process, third party payors have cited the fact that OBS
facilities are not licensed as a basis for denial of claims. This
bill addresses that by establishing a registration and certification
process to provide OBS facilities with an added level of recognition
to better enable them to seek reimbursement for facility fees from
third party payors.

In addition, those few third p311y payors who have reimbursed
office-based facilities have done so only for in-network facilities.
To make matters worse, payors will often refuse to reimburse for
out-of-network facilities, even in cases where the insureds have
contracted and paid for out-of-network coverage. For the most p311,
OBS facilities have been denied access to the health plans' network
further hindering their ability to seek reimbursement and negatively
impacting their patients' choice and access and to low cost, quality
care. This bill would correct such inequity by providing accredited
office-based surgery facilities with a mechanism to obtain a formal
recognition through a certificate of registration. Specifically, the
bill would authorize accredited OBS facilities to seek reimbursement
for a facility fee if the health plan currently reimburses for the
use of the facility charged in connection with the same covered
procedure performed at an ambulatory surgery center or hospital,
provided however, that when calculating the appropriate rate of
office-based surgery facility fees, the health plans may also take
into consideration certain comparable and non-comparable costs and
obligations of ambulatory surgery centers and hospitals.
This recognition under the law and ability to seek certain
reimbursements will assure the continued operation of these safe and
cost-effective OBS practices thereby maintaining access to
affordable, quality care for thousands of patients.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:


None.

EFFECTIVE DATE:
Immediately provided subdivision 5 of section 230-d of
the public health law shall be deemed to have been in full force and
effect on and after January 18, 2008.