S T A T E   O F   N E W   Y O R K
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                                  4788

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 25, 2011
                               ___________

Introduced  by  Sen. LAVALLE -- 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 accountable 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 of functions is breaking down traditional distinctions.
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 of functions 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 accountable
for the consequences of their decisions.
  S 2. The general obligations law is amended by adding two new sections
11-108 and 11-109 to read as follows:
  S 11-108. ACCOUNTABILITY OF  HEALTH  CARE  ORGANIZATIONS.  1.    DEFI-
NITIONS.  FOR PURPOSES OF THIS SECTION AND SECTION 11-109 OF THIS TITLE,
UNLESS THE CONTEXT CLEARLY REQUIRES OTHERWISE:
  (A) "HEALTH CARE ORGANIZATION" MEANS AN ENTITY (OTHER  THAN  A  HEALTH
CARE PROVIDER) THAT APPROVES, PROVIDES, ARRANGES FOR, OR PAYS FOR HEALTH
CARE SERVICES, INCLUDING BUT NOT LIMITED TO:
  (I)  A  HEALTH  MAINTENANCE  ORGANIZATION LICENSED PURSUANT TO ARTICLE
FORTY-THREE OF THE  INSURANCE  LAW  OR  CERTIFIED  PURSUANT  TO  ARTICLE
FORTY-FOUR OF THE PUBLIC HEALTH LAW,
  (II)  ANY  OTHER ORGANIZATION CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR
OF THE PUBLIC HEALTH LAW, OR

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05342-01-1
              

S. 4788                             2

  (III) AN INSURER OR CORPORATION SUBJECT TO THE INSURANCE LAW.
  NO  ENTITY  OR PERSON SHALL BE DEEMED TO BE A HEALTH CARE ORGANIZATION
BECAUSE THE ENTITY OR  PERSON  PROCURES  OR  PAYS  FOR  HEALTH  COVERAGE
THROUGH  AN  ENTITY ACTING UNDER THE INSURANCE LAW OR ARTICLE FORTY-FOUR
OF THE PUBLIC HEALTH LAW.
  (B) "HEALTH CARE PROVIDER" MEANS AN ENTITY LICENSED OR CERTIFIED UNDER
ARTICLE TWENTY-EIGHT OR THIRTY-SIX OF THE PUBLIC HEALTH LAW, A PREFERRED
PROVIDER ORGANIZATION, A PARTICIPATING ENTITY  THROUGH  WHICH  A  HEALTH
MAINTENANCE ORGANIZATION OFFERS HEALTH SERVICES UNDER ARTICLE FORTY-FOUR
OF  THE PUBLIC HEALTH LAW, AN ENTITY LICENSED OR CERTIFIED UNDER ARTICLE
SIXTEEN, THIRTY-ONE OR THIRTY-TWO OF THE MENTAL HYGIENE  LAW,  A  HEALTH
CARE PRACTITIONER LICENSED, REGISTERED OR CERTIFIED UNDER TITLE EIGHT OF
THE  EDUCATION LAW, OR A PROVIDER OF PHARMACEUTICAL PRODUCTS OR SERVICES
OR DURABLE MEDICAL EQUIPMENT.
  (C) "HEALTH CARE SERVICE"  MEANS  HEALTH  CARE  SERVICES,  TREATMENTS,
PRODUCTS OR EQUIPMENT PROVIDED BY A HEALTH CARE PROVIDER.
  2. (A) WHENEVER A HEALTH CARE ORGANIZATION DELAYS, FAILS OR REFUSES TO
APPROVE,  PROVIDE,  ARRANGE  FOR,  OR  PAY  FOR, IN A TIMELY MANNER, ANY
HEALTH CARE SERVICE 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.
  (B) A HEALTH CARE ORGANIZATION SHALL BE  LIABLE  UNDER  THIS  SECTION,
UNDER OTHERWISE APPLICABLE RULES OF TORT AND CONTRACT LIABILITY, INCLUD-
ING  BUT  NOT  LIMITED TO RULES RELATING TO AGENCY, VICARIOUS LIABILITY,
AND JOINT AND SEVERAL LIABILITY, FOR ANY ACT BY  AN  AGENT,  CONTRACTOR,
PARTICIPATING ENTITY, OR HEALTH CARE PROVIDER, FOR WHICH THE HEALTH CARE
ORGANIZATION  WOULD  BE  LIABLE  IF IT WERE COMMITTED BY THE HEALTH CARE
ORGANIZATION.
  3. THE FAILURE OF THE PERSON (OR OF ANY OTHER  PERSON  ACTING  ON  THE
PERSON'S  BEHALF)  TO  SEEK AN ALTERNATIVE 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
FOURTEEN 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 ORGANIZATION AND A
HEALTH CARE PROVIDER SHALL:
  (A) DIRECTLY OR INDIRECTLY REQUIRE A HEALTH CARE PROVIDER TO INDEMNIFY
OR HOLD HARMLESS THE HEALTH CARE ORGANIZATION FOR ANY LIABILITY  RESULT-
ING FROM THE HEALTH CARE ORGANIZATION'S ACTS OR OMISSIONS; OR
  (B)  WAIVE, LIMIT, OR DELEGATE THE LIABILITY OF THE HEALTH CARE ORGAN-
IZATION UNDER THIS SECTION TO ANY HEALTH CARE PROVIDER.
  6. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE ORGANIZATION AND ANY
PERSON SHALL WAIVE OR LIMIT ANY LIABILITY OF THE HEALTH  CARE  ORGANIZA-
TION UNDER THIS SECTION TO THE PERSON.
  7. 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 THE 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
PLAINTIFF CANNOT COMMENCE AN ACTION FOR PROFESSIONAL  MALPRACTICE DUE TO
THE EXPIRATION OF THE STATUTE OF LIMITATIONS PRIOR TO  THE  COMMENCEMENT
OF THE ACTION AGAINST THE DEFENDANT.

S. 4788                             3

  8.  A  HEALTH  CARE  ORGANIZATION SHALL EXERCISE REASONABLE CARE:  (A)
WHEN MAKING DECISIONS WHICH AFFECT THE HEALTH CARE SERVICE OF AN  ENROL-
LEE;  AND  (B) IN SELECTING AND EXERCISING INFLUENCE OR CONTROL OVER ITS
EMPLOYEES, AGENTS, OSTENSIBLE AGENTS, OR REPRESENTATIVES WHO ARE  ACTING
ON  ITS BEHALF, RESPECTING DECISIONS WHICH MAY AFFECT THE QUALITY OF THE
HEALTH CARE SERVICE PROVIDED TO ITS ENROLLEES.
  9. THIS SECTION SHALL NOT BE CONSTRUED TO DIMINISH ANY CONTRACTUAL  OR
LEGAL OBLIGATION OF THE HEALTH CARE ORGANIZATION, NOR TO CREATE AN OBLI-
GATION ON THE PART OF THE HEALTH CARE ORGANIZATION TO PROVIDE ANY HEALTH
CARE SERVICE TO AN ENROLLEE THAT IS NOT A COVERED BENEFIT.
  S  11-109.  PROTECTION  OF  HEALTH  CARE  PROVIDERS. 1. NO HEALTH CARE
ORGANIZATION OR HEALTH CARE  PROVIDER  SHALL,  BY  CONTRACT,  POLICY  OR
PROCEDURE:
  (A)  PROHIBIT  OR  RESTRICT  ANY  HEALTH  CARE  PROVIDER FROM FILING A
COMPLAINT;
  (B) PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM MAKING A REPORT
OR COMMENTING TO THE APPROPRIATE GOVERNMENT AGENCY REGARDING  THE  POLI-
CIES  OR  PRACTICES  OF THE ORGANIZATION WHICH MAY NEGATIVELY AFFECT THE
QUALITY OF OR ACCESS TO HEALTH CARE SERVICES; OR
  (C) PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM  DISCLOSING  OR
COMMENTING  ON POLICIES OR PRACTICES OF THE ORGANIZATION WHICH MAY NEGA-
TIVELY AFFECT THE QUALITY OF OR ACCESS TO HEALTH CARE  SERVICES  TO  THE
PUBLIC.
  THIS  SUBDIVISION  SHALL  NOT  BE  CONSTRUED  TO  PERMIT A HEALTH CARE
PROVIDER TO DISCLOSE ANY INFORMATION REGARDING  A  PATIENT  WHICH  WOULD
OTHERWISE  BE  DEEMED CONFIDENTIAL OR PRIVILEGED, OR WHICH SHOULD NOT BE
DISCLOSED OR DISCUSSED ACCORDING TO LAW OR REASONABLE PROFESSIONAL STAN-
DARDS.
  2. NO HEALTH CARE ORGANIZATION OR HEALTH CARE PROVIDER SHALL TERMINATE
A CONTRACT OR EMPLOYMENT OF A HEALTH CARE PROVIDER, OR REFUSE  TO  RENEW
SUCH  A  CONTRACT, OR PENALIZE A HEALTH CARE PROVIDER OR REDUCE OR LIMIT
THE COMPENSATION OF A HEALTH CARE PROVIDER SOLELY BECAUSE A HEALTH  CARE
PROVIDER HAS:
  (A)  ADVOCATED  FOR,  RECOMMENDED OR PROVIDED A PARTICULAR HEALTH CARE
SERVICE TO A PATIENT, TO WHICH THE PATIENT WAS ENTITLED  BY CONTRACT  OR
LAW;
  (B) TAKEN ANY ACTION UNDER SUBDIVISION ONE OF THIS SECTION;
  (C)  APPEALED  OR  ASSISTED IN APPEALING A DECISION OF THE HEALTH CARE
ORGANIZATION; OR
  (D) REQUESTED A HEARING OR REVIEW TO WHICH THE PROVIDER WAS ENTITLED.
  3. NO HEALTH CARE ORGANIZATION OR HEALTH CARE PROVIDER SHALL APPLY ANY
INCENTIVE, WHETHER MONETARY OR OTHERWISE,  TO  A  HEALTH  CARE  PROVIDER
INTENDED  OR  HAVING  THE EFFECT OF INDUCING THE HEALTH CARE PROVIDER TO
DELAY, FAIL OR REFUSE TO PROVIDE ANY HEALTH  CARE  SERVICE  TO  WHICH  A
PATIENT IS ENTITLED BY CONTRACT OR LAW.
  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:
  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,  each]  EXCEPT
THAT:

S. 4788                             4

  (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.
  (C) NO CONTRACT OR AGREEMENT BETWEEN A HEALTH MAINTENANCE ORGANIZATION
OR  ITS  COMPREHENSIVE HEALTH SERVICES PLAN AND ANY HEALTH CARE PROVIDER
SHALL DELEGATE THE LIABILITY OF THE HEALTH MAINTENANCE  ORGANIZATION  TO
ANY  HEALTH  CARE  PROVIDER OR 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 applications of any provision of  this  act  which  can  be  given
effect  without  the  invalid provision or application, and to that end,
the provisions and application of this act are severable.
  S 6. This act shall take effect immediately.