NY Pub Health L § 4406-C (2021)
2021 New York Laws PBH - Public Health Article 44 - Health Maintenance Organizations 4406-C - Prohibitions.

§  4406-c. Prohibitions. 1. For purposes of this section, "health care plan" shall mean a health maintenance organization licensed pursuant  to article  forty-three  of the insurance law or certified pursuant to this article or an independent practice association certified  or  recognized pursuant to this article or a medical group.   2.  No health care plan shall by contract or written policy or written procedure prohibit or restrict any health care provider from  disclosing to  any  subscriber,  enrollee,  patient,  designated representative or, where  appropriate,  prospective  enrollee,  (hereinafter   collectively referred  to  as  enrollee)  any  information  that  such provider deems appropriate regarding:  (a) a condition or a course of treatment with  an  enrollee  including the availability of other therapies, consultations, or tests; or  (b)  the  provisions, terms, or requirements of the health care plan's products as they relate to the enrollee, where applicable.   3. No health care plan shall  by  contract,  written  policy,  written procedure or practice prohibit or restrict any health care provider from filing  a  complaint,  making  a  report or commenting to an appropriate governmental body regarding the policies or  practices  of  such  health care  plan  which  the  provider believes may negatively impact upon the quality of, or access to, patient care. Nor shall  a  health  care  plan take  any adverse action, including but not limited to refusing to renew or execute a contract or  agreement  with  a  health  care  provider  as retaliation  against  a  health  care  provider  for filing a complaint, making a report  or  commenting  to  an  appropriate  governmental  body regarding  policies  or  practices  of  such  health care plan which may violate this chapter or the insurance law including subsection (g), (k), (l), (l-1)  or  (1-2)  of  section  forty-three  hundred  three  of  the insurance law.   4.  No  health  care plan shall by contract, written policy or written procedure prohibit or restrict any health care provider from  advocating to  the  health  care  plan  on  behalf  of the enrollee for approval or coverage of a particular course of treatment or  for  the  provision  of health care services.   5.  No  contract  or agreement between a health care plan and a health care provider shall contain any clause purporting  to  transfer  to  the health  care provider, other than a medical group, by indemnification or otherwise any liability relating to activities, actions or omissions  of the health care plan as opposed to those of the health care provider.   5-a.  Contracts entered into between a plan and a health care provider shall include terms which prescribe:  (a) the  method  by  which  payments  to  a  provider,  including  any prospective or retrospective adjustments thereto, shall be calculated;  (b) the time periods within which such calculations will be completed, the  dates  upon  which  any  such  payments  and  adjustments  shall be determined to be due, and the dates upon which  any  such  payments  and adjustments will be made;  (c)  a  description  of  the  records  or  information  relied upon to calculate any such payments and adjustments, and a  description  of  how the provider can access a summary of such calculations and adjustments;  (d)  the  process  to  be  employed  to resolved disputed incorrect or incomplete records or information and to adjust any  such  payments  and adjustments  which have been calculated by relying on any such incorrect or incomplete records or information and to adjust any such payments and adjustments which have been calculated by relying on any such  incorrect or  incomplete  records  or  information so disputed; provided, however, that nothing  herein  shall  be  deemed  to  authorize  or  require  the disclosure of personally identifiable patient information or information  related  to  other  individual  health  care  providers  or  the  plan's proprietary data collection systems, software or  quality  assurance  or utilization review methodologies; and  (e)  the right of either party to the contract to seek resolution of a dispute arising pursuant to the payment terms of such contract through a proceeding under article seventy-five of  the  civil  practice  law  and rules.   5-b.  No  contract  entered  into  with health care providers shall be enforceable if it  includes  terms  which  transfer  financial  risk  to providers, in a manner inconsistent with the provisions of paragraph (c) of  subdivision one of section forty-four hundred three of this article, or penalize providers for unfavorable case mix so as to  jeopardize  the quality  of  or  enrollees'  appropriate  access  to medically necessary services; provided, however, that payment at less  than  prevailing  fee for  service  rates  or capitation shall not be deemed or presumed prima facie to jeopardize quality or access.   5-c. (a) No health care plan shall implement an adverse  reimbursement change  to  a contract with a health care professional that is otherwise permitted by the contract, unless, prior to the effective  date  of  the change,  the  health  care  plan gives the health care professional with whom the health care plan has directly contracted and who is impacted by the adverse reimbursement change, at least ninety days written notice of the change. If the contracting health care professional objects  to  the change  that  is  the subject of the notice by the health care plan, the health care professional may, within thirty days  of  the  date  of  the notice,  give written notice to the health care plan to terminate his or her contract with the health care plan effective upon the implementation date of the adverse reimbursement  change.  For  the  purposes  of  this subdivision,  the  term  "adverse  reimbursement  change"  shall  mean a proposed change that could reasonably be expected  to  have  a  material adverse  impact  on  the  aggregate  level  of  payment to a health care professional, and the term  "health  care  professional"  shall  mean  a health  care  professional licensed, registered or certified pursuant to title eight of the education law. The notice provisions required by this subdivision shall not apply where: (i) such change is otherwise required by law, regulation or applicable regulatory authority, or is required as a result of changes  in  fee  schedules,  reimbursement  methodology  or payment  policies  established by a government agency or by the American Medical  Association's  current  procedural  terminology  (CPT)   codes, reporting  guidelines  and conventions; or (ii) such change is expressly provided for under the terms of the contract  by  the  inclusion  of  or reference  to  a specific fee or fee schedule, reimbursement methodology or payment policy indexing mechanism.  (b) Nothing in this subdivision shall create a private right of action on behalf of a health care professional against a health care  plan  for violations of this subdivision.   * 5-d.  If  a contract between a plan and a hospital is not renewed or is terminated by either party, the parties shall continue  to  abide  by the  terms of such contract, including reimbursement terms, for a period of two months from the effective date of termination or, in the case  of a  non-renewal,  from  the  end  of the contract period. Notice shall be provided to all enrollees potentially affected by  such  termination  or non-renewal  within  fifteen  days  after  commencement of the two-month period. The commissioner shall have the authority to waive the two-month period upon the request of either party to  a  contract  that  is  being terminated  for  cause.  This  subdivision  shall  not  apply where both parties mutually agree in writing to the termination or non-renewal  and  the plan provides notice to the enrollee at least thirty days in advance of the date of contract termination.   * NB Repealed June 30, 2023   5-e.  At  least  sixty  days  prior  to  the termination of a contract between a hospital and a health care plan, the parties shall  utilize  a mutually  agreed  upon  mediator  to assist in resolving any outstanding contractual issues. The results of the mediation shall not be binding on the parties.   6. No health care plan which provides coverage for prescription  drugs shall require, or enter into a contract which permits, a copayment which exceeds the usual and customary cost of such prescribed drug.   * 7.  No  health  maintenance organization which provides coverage for prescription  drugs  and  for   which   cost-sharing,   deductibles   or co-insurance  obligations  are  determined  by  category of prescription drugs shall impose cost-sharing, deductibles or co-insurance obligations for  any  prescription  drug  that  exceeds   the   dollar   amount   of cost-sharing,  deductibles or co-insurance obligations for non-preferred brand  drugs  or  its  equivalent  (or  brand  drugs  if  there  is   no non-preferred brand drug category).   * NB There are 2 sub 7's   * 7.  Any  contract  provision, written policy or written procedure in violation of this section shall be deemed to be void and unenforceable.   * NB There are 2 sub 7's   8. (a) No health care  plan  shall  by  contract,  written  policy  or procedure,  or  by  any  other means, deny payment to a general hospital certified pursuant to article twenty-eight of this chapter for  a  claim for  medically  necessary  inpatient  services, observation services, or emergency department services provided by a general hospital  solely  on the  basis  that  the  general  hospital  did  not  comply  with certain administrative requirements of such health care  plan  with  respect  to those services.  (b)  Nothing in this subdivision shall preclude a general hospital and a health care plan from agreeing to certain administrative  requirements relating  to  payment  for  inpatient services, observation services, or emergency department services, including, but  not  limited  to,  timely notification  that  medically  necessary  inpatient  services  have been provided and to reductions in payment for failure to comply with certain administrative requirements  including  timely  notification;  provided, however  that:  (i) any requirement for timely notification must provide for a reasonable extension of timeframes for notification  for  services provided  on  weekends or federal holidays, (ii) any agreed to reduction in payment for failure to meet  administrative  requirements,  including timely  notification  shall not exceed seven and one-half percent of the payment amount otherwise due for the service  provided,  and  (iii)  any agreed  to  reduction  in  payment  for  failure  to meet administrative requirements including timely notification shall not be imposed  if  the patient's  coverage  could  not  be  determined  by  the  hospital after reasonable efforts at the time the services were provided.  (c) The provisions of this subdivision shall not apply to  the  denial of  a  claim:  (i) based on a reasonable belief of a health care plan of fraud or intentional misconduct  resulting  in  a  misrepresentation  of patient  diagnosis  or  the  services provided, or abusive billing; (ii) when required by a state or federal government program or coverage  that is  provided  by  this state or a municipality thereof to its respective employees, retirees or members; (iii) that is a duplicate  claim,  is  a claim  submitted  late  pursuant to subsection (g) of section thirty-two hundred twenty-four-a of the insurance law, or is  for  services  for  a benefit  that  is  not  covered  under  the  insured's contract or for a  patient determined to be ineligible for coverage;  (iv)  except  in  the case  of  medically  necessary  inpatient  services  resulting  from  an emergency admission,  where  there  is  not  an  existing  participating provider agreement between a health care plan and a general hospital; or (v)  where  the  hospital  has  repeatedly  and systematically, over the previous twelve month period, failed to  seek  prior  authorization  for services for which prior authorization was required.  (d)  For purposes of this subdivision, an "administrative requirement" shall not include requirements: (i) imposed on a  health  care  plan  or provider  pursuant to federal or state laws, regulations or guidance; or (ii) established by the state or federal government applicable to health care plans  offering  benefits  under  a  state  or  federal  government program.  (e) The prohibition on denials set forth in this subdivision shall not apply  to  claims  for services for which a request for preauthorization was denied by the health care plan prior to delivery of the service.   9. A  health  care  plan  shall  not  require  a  prior  authorization determination for services provided in a neonatal intensive care unit of a  general  hospital  certified pursuant to article twenty-eight of this chapter. Nothing in this subdivision shall prohibit a health  care  plan from  denying a claim for such services if the services are subsequently determined not medically necessary.   10. (a) Any contract or other arrangement entered  into  by  a  health care  plan  for  the  provision  and  administration of pharmacy benefit management services on behalf of individuals enrolled in a managed  care provider, as defined in section three hundred sixty-four-j of the social services law, shall be based on a pass-through pricing model and include the following requirements:  (i)  Payment  to  the  pharmacy  benefit  manager for pharmacy benefit management services shall be limited to  the  actual  ingredient  costs, dispensing  fees  paid  to  pharmacies,  and  an administrative fee that covers the  cost  of  providing  pharmacy  benefit  management  services pursuant  to  a contract described in this paragraph. The department may establish a maximum administrative fee;  (ii) The pharmacy benefit  manager  shall  identify  all  sources  and amounts  of  income,  payments,  and  financial benefits to the pharmacy benefit manager related to the provision and administration of  pharmacy benefit   management  services  on  behalf  of  the  health  care  plan, including, but not limited to, any pricing  discounts,  rebates  of  any kind,   inflationary   payments,   credits,   clawbacks,  fees,  grants, chargebacks, reimbursements, or other benefits and shall ensure that any portion of such income,  payments,  and  financial  benefits  is  passed through  to  the  health  care  plan  in  full  to reduce the reportable ingredient cost;  (iii) The  pharmacy  benefit  manager  shall  fully  disclose  to  the department  and  to  the health care plan the sources and amounts of all income, payments, and financial benefits  referred  to  in  subparagraph (ii) of this paragraph received by the pharmacy benefit manager;  (iv)  The pharmacy benefit manager shall identify all ingredient costs and dispensing fees or similar payments made  by  the  pharmacy  benefit manager  to  any  pharmacy  in  connection  with  the  contract or other arrangement;  (v) The pharmacy benefit manager shall not utilize any form of  spread pricing in any contract or other arrangement with health care plans. For purposes  of  this subdivision "spread pricing" means any amount charged or claimed by the pharmacy benefit manager in excess of the amount  paid to  pharmacies  on behalf of the health care plan less an administrative  fee as described in this paragraph. Any  such  excess  amount  shall  be remitted to the health care plan on a quarterly basis;  (vi)  Pharmacy  benefit  managers  shall  make their payment model for administrative fees available  to  the  health  care  plan  and  to  the department.   The  health  care  plan  shall,  if  so  directed  by  the department, make changes to the payment model and  resubmit  an  amended contract or contracts to the department for review and approval.  (b)  Any  changes  to  premiums resulting from such contracts shall be subject  to  certification  by  the  state's  actuary   as   actuarially appropriate.  (c)  Contracts or other arrangements subject to this subdivision shall be submitted to the department for review and approval  as  required  by and  in accordance with state law and the regulations of the department. Contracts or other arrangements subject to this subdivision existing and in force at the time of enactment of this subdivision shall be submitted to the department for review and approval on or before July  first,  two thousand nineteen.