S T A T E O F N E W Y O R K
________________________________________________________________________
4226
2017-2018 Regular Sessions
I N A S S E M B L Y
February 1, 2017
___________
Introduced by M. of A. QUART -- read once and referred to the Committee
on Insurance
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
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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08898-01-7
A. 4226 2
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.
§ 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.
§ 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;
§ 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.
§ 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
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.