BILL NUMBER: S8207

SPONSOR: BENJAMIN
 
TITLE OF BILL:

An act to amend the tax law, in relation to prohibiting federal corpo-
rate bailout recipients who engage in stock buybacks from receiving New
York state tax credits

 
PURPOSE;

The legislation would ban anti-competitive hospital contracting prac-
tices that create higher health care prices for consumers and employers

 
SUMMARY OF PROVISIONS:

Section one amends the insurance law to prohibit health plans from
entering into agreements or contracts with health care providers that

* Require the health plan to include all members of a provider group in
its network;
              

* Require the health plan to place all members of a provider group in
the same network tier;
* Require the health plan to include all members of a provider group in
all of its products;
* Forbid health plans from using benefit design to encourage consumers
to seek services from higher-value health care providers;
* Contain most-favored-nation provisions in which the provider will not
give an equal or more favorable price to any other plan; or
* Limit the ability of the health plans or provider from disclosing fees
for services or the allowed amounts.  Such provisions in existing
contracts would become null and void effective January 1, 2021.
Section two amends the public health law to prohibit health plans from
entering into agreements or contracts with health care providers that

* Require the health plan to include all members of a provider group in
its network;
* Require the health plan to place all members of a provider group in
the same network tier;
* Require the health plan to include all members of a provider group in
all of its products;
* Forbid health plans from using benefit design to encourage consumers
to seek services from higher-value health care providers;
* Contain most-favored-nation provisions in which the provider will not
give an equal or more favorable price to any other plan; or
* Limit the ability of the health plans or provider from disclosing fees
for services or the allowed amounts.  Such provisions in existing
contracts would become null and void effective January 1, 2021.

Section three provides the effective date.

 
JUSTIFICATION:

According to multiple studies, the cost of health care in New York
continues to exceed the national average, with increases in prices
charged by provides as one of the major driver of rising health insur-
ance premiums. According to the NY State Health Foundation's December
2016 report, Why are Hospital Prices Different? An Examination of New
York Hospital Reimbursement, "a hospital's market leverage - its bargain
power when negotiation with insurers - is a key factor in the prices a
hospital can command," and "contract provisions between hospitals and
insurers can hinder competition, product innovation, transparency, and
cost containment strategies." To maintain access to health care for New
Yorkers and support a competitive market for the industry, the report
recommended barring certain contractual language from hospital/insurer
contracts, and that policies could include the barring of confidentiali-
ty language, anti-steering language, and language that hinders the abil-
ity of the tiered network product to work efficiently.

This legislation builds upon the Foundation's recommendations and seeks
to improve affordability for employers and consumers by prohibiting
restrictive contracting language that create artificial barriers to
promoting greater competition in the marketplace, increasing transparen-
cy of health care costs, and providing more affordable options for
employers and consumers.

As an example, "all-or-nothing" contracts require that if a health plan
wants a contract with any provider or affiliate in a particular provider
organization, it must contract with all providers in the system. Provid-
er organizations use this type of provision to leverage the status of
their must-have providers to demand high payment rates for the entire
provider organization, including those providers in more competitive
areas and specialties. Similarly, restrictive contract provisions some-
times require that a health plan place all physicians, hospitals, and
other facilities associated with the dominant provider system in the
most favorable tier of providers.

This legislation provides an equitable balance for hospitals contracting
with health plans and employer groups, by allowing for competition, fair
negotiations, and ensure consumers benefits. The legislation would help
address the issue of pricing fairness and access to affordable health
care in the state as well as help ensure that New Yorkers are not
subjected to unfair business practices that increase health insurance
premiums.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect January 1, 2021.