senate Bill S2944A

2013-2014 Legislative Session

Relates to the registration of office-based surgery facilities and payments for the use thereof

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to health
Jun 12, 2013 print number 2944a
amend (t) and recommit to health
Jan 25, 2013 referred to health

Bill Amendments

Original
A (Active)
Original
A (Active)

S2944 - Bill Details

See Assembly Version of this Bill:
A7944
Current Committee:
Senate Health
Law Section:
Insurance Law
Laws Affected:
Amd §§4900, 4901 & 4906, Ins L
Versions Introduced in Previous Legislative Sessions:
2013-2014: A7944
2011-2012: S4597B

S2944 - Bill Texts

view summary

Relates to the registration of office-based surgery facilities and payments for the use thereof.

view sponsor memo
BILL NUMBER:S2944

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 a certificate of registration from a nationally
recognized accrediting agency as designated by the Department of Health
and to permit such facilities to seek reimbursement from health plans
for a facility fee.

SUMMARY OF PROVISIONS: This bill amends Public Health Law § 230-d to
require office-based surgery (OBS) facilities to register with a nation-
ally-recognized accrediting agency as designated by the Department of
Health to receive a certificate of registration. The bill provides
grounds for the issuance of a certificate of registration, requires the
facility to conspicuously post the certificate of registration and
provides that the registration shall be valid for 3 years, or until the
accredited status of the facility expires.

This legislation also authorizes accredited OBS facilities who have
received a certificate of registration to seek reimbursement for a
facility fee, provided 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. When calculating
the appropriate rate of OBS 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 OBS facilities to obtain and main-
tain full accredited status by a nationally-recognized accrediting agen-
cy 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 OBS 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.

The accreditation conferred upon these OBS 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 OBS 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 OBS 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, insur-
ance companies have also failed to recognize that the impact of non-pay-
ment of these fees has been to drive procedures from the low cost OBS
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 facil-
ities and hospitals.

Inexplicably, since the enactment of the OBS 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 party payors who have reimbursed OBS facil-
ities have done so only for in-network facilities. To make matters
worse, payors will often refuse to reimburse for out-of-network facili-
ties, 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 abil-
ity 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 ASC or hospital,
provided however, that when calculating the appropriate rate of OBS
facility fees, the health plans may take into consideration certain
comparable and non-comparable costs and obligations of ASCs and hospi-
tals. 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: 2012: S.4597-B died in Health 2011: S.4597-A
passed Senate

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately; provided, subdivision 6 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, 2009.

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

                                  2944

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 25, 2013
                               ___________

Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law, in relation  to  registration  of
  office-based surgery facilities and payments for the use thereof

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

  Section 1. Subdivision 1 of section 230-d of the public health law  is
amended by adding two new paragraphs (j) and (k) to read as follows:
  (J)  "LICENSEE  PRACTICE" SHALL MEAN AN OFFICE-BASED SURGERY FACILITY,
WHICH HAS ACCREDITED STATUS. SUCH  A  FACILITY  MAY  OPERATE  UNDER  THE
LICENSE OF THE LICENSEE.
  (K)  "HEALTH  PLAN"  SHALL  MEAN  AN  INSURER LICENSED PURSUANT TO THE
INSURANCE LAW TO WRITE ACCIDENT AND HEALTH INSURANCE,  OR  A  NON-PROFIT
MEDICAL AND DENTAL INDEMNITY, OR HEALTH AND HOSPITAL SERVICE CORPORATION
LICENSED  PURSUANT  TO  ARTICLE  FORTY-THREE  OF THE INSURANCE LAW, OR A
HEALTH MAINTENANCE ORGANIZATION CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR
OF THIS CHAPTER.
  S 2. Section 230-d of the public health law is amended by  adding  two
new subdivisions 3-a and 6 to read as follows:
  3-A.   (A) EVERY FACILITY OPERATED AS AN OFFICE-BASED SURGERY PRACTICE
OR SETTING SHALL, NOT LATER THAN JANUARY FIRST, TWO  THOUSAND  FOURTEEN,
IN  ADDITION TO OBTAINING AND MAINTAINING FULL ACCREDITED STATUS, HOLD A
CERTIFICATE OF REGISTRATION ISSUED BY THE ACCREDITING AGENCY, IN CONSUL-
TATION WITH THE DEPARTMENT. THE ACCREDITING AGENCY SHALL ISSUE A CERTIF-
ICATE TO AN APPLICANT LICENSEE PRACTICE WHICH:
  (I) FILES AN APPLICATION FOR REGISTRATION IN SUCH FORM AND HAVING SUCH
CONTENT AS SHALL BE DETERMINED BY THE ACCREDITING AGENCY,  IN  CONSULTA-
TION WITH THE DEPARTMENT;
  (II)  HAS SUCCESSFULLY COMPLETED AN ON-SITE INSPECTION OF THE FACILITY
CONDUCTED BY A NATIONALLY-RECOGNIZED ACCREDITING AGENCY AS DESIGNATED BY
THE COMMISSIONER;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02577-01-3

S. 2944                             2

  (III) SUBMITS PROOF OF ITS FULL ACCREDITED STATUS; AND
  (IV)  THE INITIAL CERTIFICATION OF WHICH HAS AN INITIATION DATE OF THE
FIRST DATE OF ACCREDITATION  AS  LONG  AS  THE  FACILITY  REMAINS  FULLY
ACCREDITED PURSUANT TO THIS SECTION.
  (B)  NO  FACILITY  OPERATED  AS  AN  OFFICE-BASED  SURGERY PRACTICE OR
SETTING SHALL HOLD ITSELF OUT AS OR REPRESENT  THAT  IT  IS  REGISTERED,
UNLESS  IT  HOLDS A VALID CERTIFICATE OF REGISTRATION ISSUED PURSUANT TO
THIS SUBDIVISION.
  (C) THE CERTIFICATE OF REGISTRATION ISSUED TO A FACILITY  PURSUANT  TO
THIS SUBDIVISION SHALL BE CONSPICUOUSLY POSTED AT THE PRINCIPAL ADMINIS-
TRATIVE OFFICE OF SUCH FACILITY.
  (D)  IN  THE  EVENT  THE  ACCREDITING AGENCY FINDS THAT AN APPLICATION
SUBMITTED PURSUANT TO PARAGRAPH (A)  OF  THIS  SUBDIVISION  CONTAINS  OR
EVINCES ANY DEFICIENCY IN THE APPLICANT'S ACCREDITED STATUS, THE ACCRED-
ITING  AGENCY  MAY  ISSUE  A PROVISIONAL CERTIFICATE OF REGISTRATION FOR
SUCH PERIOD OF TIME AS MAY BE NECESSARY TO CURE SUCH DEFICIENCY. NO SUCH
PROVISIONAL CERTIFICATE SHALL BE ISSUED UNTIL THE  APPLICANT  AGREES  IN
WRITING TO FULLY COMPLY WITH THE PROVISION OF THIS SECTION.
  (E)  EACH  CERTIFICATE  OF REGISTRATION SHALL BE VALID FOR A PERIOD OF
THREE YEARS, OR UNTIL THE ACCREDITED STATUS  OF  THE  FACILITY  EXPIRES,
WHICHEVER SHALL OCCUR FIRST.
  6.  EVERY  FACILITY  OPERATED  AS  AN OFFICE-BASED SURGERY PRACTICE OR
SETTING WITH FULL ACCREDITED STATUS, INCLUDING A CURRENT CERTIFICATE  OF
REGISTRATION,  SHALL  BE ELIGIBLE TO SEEK PAYMENT FROM A HEALTH PLAN FOR
THE USE OF SUCH FACILITY. SUCH PAYMENT SHALL BE IN ADDITION TO  THE  FEE
CHARGED  BY THE LICENSEE FOR THE PERFORMANCE OF THE COVERED OFFICE-BASED
SURGERY INVOLVING AN INSURED OR A HEALTH PLAN  ENROLLEE;  PROVIDED  THAT
THE  HEALTH  PLAN  ALSO  REIMBURSES FOR THE USE OF A FACILITY CHARGED IN
CONNECTION WITH THE SAME COVERED PROCEDURE PERFORMED AT  A  HOSPITAL  OR
AMBULATORY  SURGERY CENTER ORGANIZED PURSUANT TO ARTICLE TWENTY-EIGHT OF
THIS CHAPTER. WHEN CALCULATING  THE  APPROPRIATE  RATE  OF  OFFICE-BASED
SURGERY  FACILITY  FEES,  A HEALTH PLAN MAY ALSO TAKE INTO CONSIDERATION
CERTAIN COMPARABLE AND NON-COMPARABLE COSTS AND OBLIGATIONS OF AMBULATO-
RY SURGERY CENTERS AND HOSPITALS.
  S 3. This act shall take effect immediately; provided,  however,  that
subdivision  6  of  section  230-d of the public health law, as added by
section two of this act, shall be deemed to have been in full force  and
effect on and after January 18, 2009, and shall only apply to facilities
during the period of time which they remain fully accredited pursuant to
section 230-d of the public health law.

S2944A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A7944
Current Committee:
Senate Health
Law Section:
Insurance Law
Laws Affected:
Amd §§4900, 4901 & 4906, Ins L
Versions Introduced in Previous Legislative Sessions:
2013-2014: A7944
2011-2012: S4597B

S2944A (ACTIVE) - Bill Texts

view summary

Relates to the registration of office-based surgery facilities and payments for the use thereof.

view sponsor memo
BILL NUMBER:S2944A

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

PURPOSE:

Adds office-based surgery facilities, certified or accredited pursuant
to § 230d of the Public Health Law, to utilization review provisions
of the Insurance Law.

SUMMARY OF PROVISIONS:

Section 1 provides the legislative intent.

Section 2 adds office-based surgery facilities, certified or
accredited pursuant to § 230d of the public health law, to clause (1)
of subparagraph (A) of paragraph 1 of subsection (e) and subsection
(g) of section 4900 of the insurance law.

Section 3 adds office-based surgery facilities, certified or
accredited pursuant to § 230d of the public health law, to paragraph 2
of subsection (b) of section 4901 of the insurance law.

Section 4 adds office-based surgery facilities, certified or
accredited pursuant to § 230d of the public health law, to subsection
(b) of section 4906 of the insurance law. Section 5 includes the
effective date.

EXISTING LAW:

Current law requires Office-Based Surgery (OBS) facilities to 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 OBS 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.

The accreditation conferred upon these OBS 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 OBS facilities provide quality care at a lowercost 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 OBS
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 nonpayment of these fees has been to drive procedures
from the low cost OBS 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 OBS 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
providing OBS facilities with the same review procedures licensed
facilities utilize when insurer deny these claims.

LEGISLATIVE HISTORY:

S.4597-B passed in 2011

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately; provided, subdivision 6 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, 2009.

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

                                 2944--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 25, 2013
                               ___________

Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
  printed to be committed  to  the  Committee  on  Health  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the  insurance  law,  in relation to registration of
  office-based surgery facilities and payments for the use thereof

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

  Section  1.  Legislative intent. The legislature hereby finds that New
York state is home to  approximately  1,000  accredited  physician-owned
ambulatory surgery facilities, referred to as Office-Based Surgery (OBS)
practices,  currently providing patient access to virtually all types of
covered outpatient surgical  procedures  safely  and  at  a  lower  cost
compared  to  other  settings,  including traditional ambulatory surgery
centers and hospitals.
  The legislature further finds that  advances  in  medicine,  including
surgical  techniques,  equipment  and  improvements in anesthesia enable
procedures to be performed safely, conveniently and at a much lower cost
in an office-based setting. In fact, conservative estimates show  physi-
cian-owned  ambulatory  surgery  facilities  can achieve cost savings of
30%-40% as compared with other settings. The enviable safety  record  of
the accredited OBS industry is also well established.
  The  legislature also finds that like many states, New York is experi-
encing a growing physician  shortage.  The  problem  is  compounded  for
accredited  office-based  surgery facilities and the patients they treat
by the recent refusal on the part of many third party  payers  to  reim-
burse facility costs for covered procedures. These expenses are substan-
tial  and include capital costs, equipment usage, supplies and overhead.
The motives behind these denials are inexplicable given that this  venue
represents  the  lowest-cost provider. In fact, it was not long ago that
insurers were consistently reimbursing OBS practices for their  facility

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02577-02-3

S. 2944--A                          2

costs.  Practitioners  invested  in  their  practices dependent on these
established reimbursement practices.  Without the mechanism to negotiate
with the payers, these mostly small or solo practices lack the clout and
market  power to negotiate and convince insurers to reinstate reimburse-
ment.
  The legislature also finds that lack of reimbursement has driven  many
physician  owned  ambulatory  surgery  practices out of the market. Many
more are likely to follow resulting in thousands of lost jobs, decreased
access to care and substantially higher costs to patients and the  over-
all healthcare delivery system.
  The  legislature  further  finds that while office-based surgery prac-
tices are recognized in statute pursuant to the  accreditation  require-
ments  in  section  230-d  of the public health law, there is nothing in
current law  or  regulations  that  specifically  identifies  accredited
office-based  surgery entities as facilities entitled to seek reimburse-
ment for facility related costs.
  Therefore, the legislature hereby declares that, due to  the  integral
role  that  accredited  office-based surgery practices play in the safe,
efficient and low-cost delivery of surgical services,  as  well  as  the
need to protect and enhance patient safety and access to affordable care
for  all  New Yorkers, it is in the interest of the people of this state
to further enhance recognition of accredited office-based surgery  prac-
tice  and protect and encourage a robust and successful industry in this
state.
  S 2. Clause (i) of subparagraph (A) of paragraph 1 of  subsection  (e)
and  subsection  (g) of section 4900 of the insurance law, as amended by
chapter 558 of the laws of 1999, are amended to read as follows:
  (i) provided by a facility licensed, CERTIFIED OR ACCREDITED  pursuant
to  SECTION  TWO  HUNDRED  THIRTY-D,  article  twenty-eight, thirty-six,
forty-four or forty-seven of the public health law or pursuant to  arti-
cle  nineteen,  [twenty-three,]  thirty-one  or thirty-two of the mental
hygiene law; or
  (g) "Health care provider" means  a  health  care  professional  or  a
facility  licensed,  CERTIFIED  OR  ACCREDITED  pursuant  to SECTION TWO
HUNDRED  THIRTY-D,  article  twenty-eight,  thirty-six,  forty-four   or
forty-seven of the public health law or a facility licensed OR CERTIFIED
pursuant  to  article nineteen, [twenty-three,] thirty-one or thirty-two
of the mental hygiene law.
  S 3. Paragraph 2 of subsection (b) of section 4901  of  the  insurance
law,  as added by chapter 705 of the laws of 1996, is amended to read as
follows:
  (2) Those circumstances, if any, under which utilization review may be
delegated to a  utilization  review  program  conducted  by  a  facility
licensed,  CERTIFIED OR ACCREDITED pursuant to SECTION TWO HUNDRED THIR-
TY-D OR article twenty-eight of the public health  law  or  pursuant  to
article thirty-one of the mental hygiene law;
  S  4. Subsection (b) of section 4906 of the insurance law, as added by
chapter 237 of the laws of 2009, is amended to read as follows:
  (b) Notwithstanding subsection (a) of this section,  in  lieu  of  the
external appeal process as set forth in this article, a health care plan
and a facility licensed, CERTIFIED OR ACCREDITED pursuant to SECTION TWO
HUNDRED  THIRTY-D  OR  article twenty-eight of the public health law may
agree to an alternative dispute resolution mechanism to resolve disputes
otherwise subject to this article.
  S 5. This act shall take effect immediately and  shall  be  deemed  to
have  been  in  full force and effect on and after January 18, 2009 with

S. 2944--A                          3

respect to claims and appeals filed for health care services provided at
facilities subject to the provisions of  section  230-d  of  the  public
health  law during the period of time which such facilities remain fully
licensed, certified or accredited pursuant to such section.

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