New York

SUMMARY

In 2017, Governor Andrew M. Cuomo presented a proposal to combat rising prescription drug prices. In sum, the Governor wants to 1) impose a price ceiling for certain high-cost prescription drugs reimbursed through Medicaid; 2) place a surcharge on high-priced drugs priced above certain benchmarks; and 3) require pharmacy benefit managers to register with the State, and be subject to new regulations.

In addition, New York developed an all-payer claims database (APCD), and has recently released draft regulations that are open for public comment.  The state passed legislation in 2011 that enables the creation of an all-payer database. The all-player database will integrate claims data from the APCD  with clinical and quality data and public health repositories. Other current New York legislation is mostly aimed at pharmaceutical price transparency, patient fee advisement, and provider-insurance carrier contract provisions.

In other price transparency 2017 measures, New York legislation sought to require pharmaceutical companies to disclose historical information about a drug’s development if a drug exceeds a certain wholesale acquisition cost threshold. Another bill would require health care providers to advise patients of fees the patient will be charged for upcoming services. New York also proposed an interesting bill that aimed to educate New Yorkers on long-term care options, insurance, and insurance providers. In regard to cost containment, New York sought to prohibit health insurance plans and clauses that impose drug tiers based on expense or disease or that require a provider to acquiesce to a health insurance carrier reimbursing the provider at the lowest rate the provider has charged another person or entity for the same service.

 

LEGISLATION/REGULATION

Legislative Calendar

New York’s current regular legislative session runs from 1/3/2018 – 12/31/2018.

 

Legislative Updates

Healthcare Transparency

2017-2018 S2663 (Hamilton) TRANSPARENCY: Promotes transparency and equity in the utilization review process by ensuring that agents are independent, having no existing relationships with the reviewed entity. Active – Reintroduced in 2018 Legislative Session.  
A8781 PHARMACY BENEFIT MANAGERS: Prohibits pharmacy benefit managers from prohibiting pharmacies from disclosing to consumers the cost of prescription medication, the availability of alternative medications or alternative means of purchasing prescription medications; and prohibits pharmacy benefit managers from collecting copayments from consumers of prescription medications Active – Passed Senate and Assembly on 3/6/18. Returned to Assembly for markup.
A10026 PHARMACY BENEFIT MANAGER TRANSPARENCY ACT: A pharmacy benefit manager shall notify a covered entity in writing of any activity, policy, practice, ownership, interest, or affiliation of the pharmacy benefit manager that presents a conflict on interest that interferers with the requirements imposed by this article. Active – Referred to Insurance Committee.
S7191/A9893 (Griffo) RELATES TO ENHANCING PHARMACEUTICAL TRANSPARENCY AND CONSUMER PROTECTION: No contract for pharmacy services entered into in the state between a health insurance carrier or a pharmacy benefit manager and a pharmacy, pharmacist or a pharmacy’s contracting agent, such as a pharmacy services administrative organization, shall contain a provision prohibiting or penalizing, including through increased utilization review, reduced payments or other financial disincentives, a pharmacist’s disclosure to an individual purchasing prescription medication of information. Active – Referred to Health Committee on 2/8/2018.
S6940 (Hannon) PHARMACY BENEFIT MANAGERS: Prohibits pharmacy benefit managers from prohibiting pharmacies from disclosing to consumers the cost of prescription medication, the availability of alternative medications or alternative means of purchasing prescription medications; and prohibits pharmacy benefit managers from collecting copayments from consumers of prescription medications. Active – Passed Senate and Referred to Assembly on 3/6/18.
A2535 (Barnwell) TRANSPARENCY IN HEALTHCARE FEES ACT: Prior to performing any health care services, all health care providers shall advise patients in writing of the fee to be charged to the patient for the services to be rendered in the event such fee is not paid for by insurance. Active –  Reintroduced in 2018 Legislative Session.
A236/S5471 REQUIRES THE COMMISSIONER OF HEALTH TO ESTABLISH AND PUBLISH A LIST OF GENERIC DRUG PRODUCTS: The commissioner shall establish and publish a list of drug products matched to brand name drugs with which they have therapeutic equivalence. Active – Reintroduced in 2018 Legislative Session. Passed Assembly on 3/28/18 and referred to Senate.
A2939 PRESCRIPTION DRUG COST TRANSPARENCY: Requires drug manufacturers selling medications in NY with a WAC of $1,000 for a 30 day supply and for which the price has increased 3x in a 3 month period would be required to file a report within the state. Inactive –Died in Committee.  
S77 (Hoylman, Perkins) TRANSPARENCY IN HEALTHCARE FEES ACT: Establishes the “transparency in health care fees act” requiring health care providers to submit bills to patients prior to performing services. In other words, prior to performing any health care services, all health care providers shall advise patients in writing of the fee to be charged to the patient for the services to be rendered in the event such fee is not paid for by insurance. Inactive –Died in Committee.
2015-2016 A04902

(Walter)

 

LONG TERM CARE INSURANCE EDUCATION: would amend NY Elder Law to require the Director, in consultation with the Commissioner of Health, to establish a program that provides comprehensive, objective, locally-based information on long term care options, insurance, and insurance providers. The program would be named “NY Connects: Choices for Long Term Care.” The bill would also amend NY Insurance Law to prohibit long term care contracts rate increases, during the duration of the policy or certificate, unless the superintendent approves it and it doesn’t the greater of (i) 3% or (ii) the consumer price index change, as published by the Bureau of Statistics. Inactive –Died.
S00344/A00250

(Hoylman, Perkins)

 TRANSPARENCY IN HEALTH CARE FEES: would require health care providers to advise patients, in writing, prior to performing any health care services, the fee the patient will be charged for each service in the event that insurance will not cover it. Inactive –Died.
S02625

(Krueger, Perkins)

PHARMACEUTICAL MANUFACTURER AND LABELER MARKETING EXPENSES: would require all manufacturers and labelers of prescription drugs dispensed in New York, that engage in marketing activities within the state, to annually report its marketing expenses to the New York Department of Health. Inactive –Died.
S05338

(Diaz, Perkins)

PHARMACEUTICAL PRICE TRANSAPRENY ACT: would require the disclosure of: (i) research and development costs for the drug, (ii) clinical trial and regulatory costs, (iii) materials, manufacturing, and administrations costs, (iv) research and development subsidies, grants, and other such support, (v) other costs (patents, etc.), and (vi) marketing and advertising costs.See Policy and Medicine Article on S05338. Inactive –Died.

 

Healthcare Cost

2017-2018 A3007/S2007 HEALTH AND MENTAL HEALTH BUDGET: Establishes a medicaid drug cap. Providers for Medicaid DUR Board to follow a recommendation for a target supplemental Medicaid rebate to be paid by the manufacturer of the drug to the department and the target amount of the rebate. Passed. 
S6795 (Hannon) NEW YORK STATE MEDICAL INDEMITY FUND: Relates to expanding the function of the New York state medical indemnity fund such that it will serve as a funding source for future health care costs associated with neurological injuries resulting from medical services provided or not provided. Active – Referred to Committee.
S1668A (Gallivan) NEW YORK STATE HEALTH CARE QUALITY AND COST CONTAINMENT COMMISSION: Provides that the New York state health care quality and cost containment commission shall: evaluate each mandated benefit; investigate current practices of health plans with regard to the mandated benefit; investigate the potential premium impact of repealing and/or modifying the mandated benefits on all segments of the insurance market; hold at least two public hearings;  submit a report to the legislature; makes related provisions. Active – Reintroduced in 2018 Legislative Session.
A7087 PRICE GOUGING OF MEDICINE: Party within the chain of distribution of any drug subject to a shortage shall sell or offer to sell any such drug subject to a shortage for an amount which represents an unconscionably excessive price. The Attorney General may apply in the name of the people of New York to the Supreme Court within the Judicial District in which such violation is alleged to have occurred for an order enjoining or restraining commission or continuance of the alleged unlawful acts. Active – Passed Assembly on 3/22/18 and referred to Senate.
S4241 ESTABLISHING PROTECTION FROM EMERGENCY HOSPITAL SERVICES: Hospital charges for emergency services must be subject to dispute resolution to ensure that hospitals are not able to take advantage of section 3241 of the insurance law by charing exorbitant fees which ultimately drive up the cost of health insurance. Active– Advanced to 3rd Committee reading.
S7028/A5249 PRICE GOUGING: establishes the crime of price gouging as a violation, authorizing district attorneys to pursue violations, and clarifying that no stateof emergency need be declared by the governor for the enforcement of the price gouging law to be in effect during an abnormal disruption inthe market. Active – Referred to Consumer Protection Committee.
A7509 INTERCHANGEABLE BIOLOGICAL PRODUCTS: Allows a pharmacist to dispense a lower cost generically equivalent drug product or interchangeable biological product. Passed. 
A5733/S2544 PRICE GOUGING: Penalizes drug manufacturers for increasing prices that are unconscionably excessive. Court may impose a civil penalty up to $1 million. Inactive –Died in Committee.  
A193/S2247 AUTHORIZES HEALTHCARE FACILITIES AND PROFESSIONALS TO PAY FOR THE FAIR MARKET VALUE OF PRACTICE MANAGEMENT, BILLING OR HEALTH INFORMATION TECHNOLOGY SERVICES: Allows hospitals and licensed professionals to pay a fee to vendors of practice management, billing or health information technology services based on a percentage of fees billed or collected, a flat fee, or any other arrangement, provided that the hospitals or licensed professionals (a) are responsible for the contents of claims submitted, (b) receive the third-party payments in their own name, and (3) do not receive referrals from the vendor. Inactive –Died in Assembly.
A115 (Cahill) At the discretion of the insurer, anesthesia services provided by a certified registered nurse anesthetist may be eligible for reimbursement under any policy which provides for coverage for anesthesia services. However, an insurer would not be required to reimburse both a physician and a certified registered nurse anesthetist for providing the same anesthesiology services. Inactive –Died in Committee.
S158 (Gustavo Rivera) Requires general hospitals to develop and implement policies that assure equitable and consistent access to outpatient services as part of their community service plans. Inactive –Died in Committee.
2015-2016 A02210 (Gottfried, Dinowitz, Englebright, Galef, Paulin, Cusick, Kavanagh, Rosenthal, Titone) LOWEST PRICE/RATE REIMBURSEMENTS: would prohibit contract clauses that entitle health insurers to reimburse healthcare providers at the lowest price or rate such provider charges a person or entity for rendering the same treatment or providing the same service. Inactive –Died.
A03273

(Titus)

DRUG TIERS: would require the Superintendent of the Insurance Department to deny policies that impose drug tiers that are based on expense or disease. It would also require the superintendent to deny polices that charge cost-sharing percentages for prescription medications. Inactive –Died.
A4437 (Silver) Prohibits Medicare charges by healthcare providers in excess of statutory limitations. Inactive –Died.

 

Healthcare Markets

2017-2018 A2006 (Schimminger) MEDICAID SERVICES: Modifies availability of Medicaid services to bring them more in line with those of private health insurance coverage. Active –  Referred to Health Committee.
A4738 (Gottfried) NEW YOR HEALTH PLAN: Establishes the New York Health program, a comprehensive system of access to health insurance for New York state residents; provides for administrative structure of the plan; provides for powers and duties of the board of trustees, the scope of benefits, payment methodologies and care coordination; establishes the New York Health Trust Fund which would hold monies from a variety of sources to be used solely to finance the plan;  enacts provisions relating to financing of New York Health, including a payroll assessment, similar to the Medicare tax; establishes a temporary commission on implementation of the plan; provides for collective negotiations by health care providers with New York Health. Active – Referred to Ways and Means Committee.
S4558A (LaValle) Removes the state insurance fund’s exemption from licensing and other requirements of the insurance law; requires the superintendent of financial services to approve the rules adopted by the state insurance fund for the conduct of its business; removes the requirement for policyholders to provide thirty days notice to withdraw from the state insurance fund. Active – Reintroduced in 2018 Legislative Session.
S425 (Seward) Amends the definition of “small group” for purposes of health insurance policies and contracts to fifty employees or fewer; and repeals provisions requiring the superintendent to conduct an impact study. Active –Reintroduced in 2018 legislative session. Passed Senate and referred to General Assembly.
A27 (Cahill) A health maintenance organization or insurer shall not by contract or in any other manner refuse to accept premium or any required cost sharing payments from third parties if made by (a) an Indian tribe, tribal organization, urban Indian organization, or any state or federal government program or grantee on behalf of an enrollee, or (b) a private, not-for-profit foundation. Inactive –Died in Committee.
A99 (Cahill) Redefines “small group” for the purposes of sections 3231 and 4317 of the insurance law Inactive –Died in Committee.
A193

(Buchwold)

Authorizes health care facilities and professions to pay for the fair market value of practice management, billing or health information technology services Inactive –Died in Committee.
A5062/S3525A NEW YORK HEALTH ACT: Implements a statewide universal healthcare system and provides no cost coverage to every New Yorker with no out of pocket costs and no network restrictions. Inactive –Died in Assembly.
S4781 AMERICAN HEALTH BENEFIT EXCHANGE: Establishes a New York state Health Benefit Exchange. The exchange shall facilitate enrollment in health coverage, the purchase and sale of qualified health plans in the individual market in this state and enroll individuals in health coverage for which they are eligible in accordance with federal law. Inactive –Died in Committee.

 

Key Statutes

We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.

Healthcare Transparency

  • 2011 legislation enabled the development of New York’s All Payer Database, which is currently in the implementation stage. The New York State Department of Health released draft regulations of the APD in August 2016.

 

  • Health L. § 4406: New York’s pro-consumer statutes promoting insurance coverage transparency. The statute states, in relevant part: “[health insurance contracts] shall fully and clearly state the benefits and limitations therein provided or imposed, so as to facilitate understanding and comparisons, and to exclude provisions which may be misleading or unreasonably confusing.”

 

Healthcare Costs

  • Chap.57: Enacts into law major components of legislation necessary to implement the state health and mental health budget for the 2017-2018 state fiscal year; relates to controlling drug costs; relates to the drug utilization review board; relates to Medicaid reimbursement of covered outpatient drugs;  authorizes the suspension of a provider’s Medicaid enrollment for inappropriate prescribing of opioids; relates to reducing Medicaid coverage and increasing copayments for non-prescription drugs to aligning pharmacy copayment requirements with federal regulations, and to adjusting consumer price index penalties for generic drugs.

 

Healthcare Markets

  • New York’s Department of Health administers is Certificate of Need process, which governs establishment, construction, renovation and major medical equipment acquisitions of health care facilities, such as hospitals, nursing homes, home care agencies, and diagnostic and treatment centers. As explained by the DOH: “The objectives of the CON process are to promote delivery of high quality health care and ensure that services are aligned with community need. CON provides the Department of Health oversight in limiting investment in duplicate beds, services and medical equipment which, in turn, limits associated health care costs.”

 

FY 2018 BUDGET

New York’s fiscal year begins April 1 and ends on March 31. However, the actual “budget cycle,” representing the time between early budget preparation and final disbursements, begins some nine months earlier and lasts approximately 27 months – until the expiration of the State Comptroller’s authority to honor vouchers against the previous fiscal year’s appropriations. New York passed its FY 2018 Budget on April 9, 2017.  To view New York’s FY 2018 health spending plan, click here.

New York’s Fiscal Year 2018 budget includes a Medicaid drug expenditure cap provision that allows the state Department of Health to set an annual projected spending target for prescription drugs.6 If spending exceeds the cap, the state and its Drug Utilization Review Board, the regulatory body that reviews prescribing practices in Medicaid, can negotiate supplemental rebates with drug manufacturers to lower spending to allowable amounts.

 

LITIGATION/ENFORCEMENT

Pharmaceuticals

  • The Attorney General and two generic pharmaceutical manufactures entered into a settlement in February 2014, which required the two manufacturers to end an anticompetitive agreement. According to the AG press release, under the agreement the pharmaceutical manufactures “committed not to challenge certain regulatory exclusivities held by the other, served to protect each party’s market positions with respect to dozens of drugs, and reduced the risk that each would face greater competition for its generic drugs.” The settlement also requires the manufacturers to agree to refrain from entering similar agreements in the future.

 

  • The New York Attorney filed suit against Alzheimer’s drug maker Forest Laboratories on September 2014, which settled in December 2015. The AG claimed that the drug maker was engaging in a tactic called the “forced switch,” which involves switching patients from drugs whose patents are close to expiring to drugs with longer patent lives. The New York Times covered the initial case, and STAT reported on the settlement. The New York AG’s press releases and filings in the case are available here.

 

  • On September 6, 2016, the New York Attorney General’s office announced that it was investigating Mylan Pharmaceuticals. According to the AG press release, “a preliminary review by the Office of the Attorney General revealed that Mylan Pharmaceuticals may have inserted potentially anticompetitive terms into its EpiPen sales contracts with numerous local school systems.”

 

Narrow Networks

  • On September 9, 2014, AG Schneiderman announced an agreement with GHI, a subsidiary of EmblemHealth, Inc., New York’s largest health insurer, that requires improved plan disclosures for out-of-network provider benefits to those members who sign up for GHI’s Comprehensive Benefits Plan. The settlement also provides that GHI establish a $3.5 million consumer assistance fund to provide financial relief to members, most of them New York City employees, and pay $300,000 in penalties to the Attorney General’s office.

 

Healthcare Markets

  • The Attorney General and UnitedHealth Group entered into a settlement in January 2016 following the AG’s investigation of the health care organization for unlawfully restraining competition related to insurance for elder and long-term-care homes. According to the AG press release, the settlement provides that “United may not require skilled nursing facilities seeking to participate in United’s broader insurance network to also contract with United for a separate service – United’s institutional special needs plan.” The investigation stemmed from complaints that United was requiring skilled nursing facilities to participate in the special needs plans to be included in the broader United network. By doing this, United allegedly was cutting off competition to other special needs plans.

 

  • On December 11, 2013, AG Schneiderman announced a settlement with the two general acute care hospitals in the city of Utica, Faxton-St. Luke’s Healthcare and St. Elizabeth Medical Center. The settlement allowed the two financially troubled hospitals, to merge under certain conditions, including a prohibition on exclusionary conduct, temporary rate protection, and continued monitoring by the AG’s office. About the settlement, the AG said: “This settlement allows Utica’s two biggest hospitals to combine in order to survive in a challenging economic environment, while ensuring that the hospitals will fulfill their promise to use the partnership to improve patients’ access to quality health care and not to increase prices.”

 

RESEARCH & ARTICLES 

 

KEY RESOURCES

New York State Senate

New York State Assembly

New York Office of the Attorney General

New York Department of Health

New York Department of Financial Services

New York All Payer Database

Health Data NY